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Your money squabbles won’t just break your heart, it can get you blacklisted

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How you earn and spend your cash as a couple can make or break any relationship. How you decide to run your finances reveals a lot about the two of you.

Many people find themselves in financial dire straits after a breakup. Either they had to take over joint expenses, set up a new home, or they lent money to the ex while they were still together. In a worst-case scenario, they’ve been cleaned out by the ex on his or her way out the door.

While a break-up often means having to adjust your lifestyle somewhat, financial disaster basically points to the fact that as a couple you did not discuss your financial situation calmly and objectively, or make sane and rational decisions when it came to earning, spending and saving.

In South Africa, there are divorce laws dealing with finances after a split, but there is no legal recognition at all for a so-called ‘common-law wife’ or partner.  If you’ve been in a situation where you paid for all the consumables, and your partner for the bond, you could walk out with nothing.

Clearly, the beginning of a relationship is when these decisions need to be made. It doesn’t matter how starry-eyed the two of you are, real life is still out there.  And declaring open season on your partner’s wallet, is usually a good way to initiate the end of any relationship.

How your run your joint finances is a decision you can revise at any time, depending on your particular situation, and changing circumstances.

Here are a few ways in which finances can be organised.

If you go halvies on everything (from rent/restaurant bills/ municipal bills/food/joint expenses) it lowers the chances of comebacks and resentment.

Chaotic on-the-spot decisions

Whoever has cash, pays. Or one person always pays, and another one maybe never. But the point is that no policy decision has been made at all, and pretty shortly you have both lost track of who owes who what, if anything.

This type of chaos, while initially avoiding the ‘money talk’, leads to far greater possible confrontations down the line. Both people are inclined to feel shortchanged, and there’s no way to unravel this mess.

Fifty-fifty

If you go halvies on everything (from rent/restaurant bills/ municipal bills/food/joint expenses) it lowers the chances of comebacks and resentment. But what if one partner suddenly loses their job, or the one earns a lot more than the other?

This system only really works if you earn more or less the same amount of money. Something else that could cripple this system is if one partner has huge debts or student loans to pay off, and therefore far less dispensable cash.

One person pays for everything. If one partner is very rich (and the other, well, not so rich) at home with the kids, or temporarily unemployed, there may be no choice in this matter. But it still needs to be discussed. This is the kind of situation which needs to be renegotiated if the circumstances change, otherwise it could lead to resentment or other complications.

WATCH: How to discuss money issues with your partner


Living on one salary

Some couples do this before they have kids in order to build up some reserves. (With the cost of living, this has become difficult and more rare). If you live on the highest of the two salaries, and you save the other one, you will quickly manage to build up some savings which could see you through a rainy day. It is also easy to split up these finances if the relationship ends.

Pay a percentage. If you earn, say, 40 percent more than your partner, is it still fair to split everything in half? What some couples do, is to put a percentage (say 50%) of their respective incomes into a joint fund from which everything is paid. OK, that does mean that one person pays more than the other one does, but it also means as a couple, they can do more fun things together, which would not have been possible if they each had to pay half of everything.

Have three accounts

Your account, your partner’s account, and one account for all your joint expenses, into which you each pay a predetermined amount of cash each month. It doesn’t have to be exactly the same, and depends on factors such as income, debts, and likely expenditure. This needs to be discussed carefully beforehand.

Dividing the bills

If one person pays for all the food, the other for all the municipal bills, the one for the car, and the other for all the insurance policies, the one for the rent, the other for the medical scheme, it could work out more or less equally. But this moveable feast has to be re-evaluated regularly. It is also unfair if one person is building assets, while the other is paying for petrol and food.

What some couples do, is to put a percentage (say 50%) of their respective incomes into a joint fund from which everything is paid.

One big happy family

This is what many married couples do: they basically pool everything (income, debts, expenses), including bank accounts, and run the household in this way. If it works for you, why not? But this requires open communication and a high degree of trust – and it can create a nightmare if the marriage heads for the rocks.

Here are some quick financial warning signs that indicate that you and your partner need to have ‘the money talk’ again, or that you need to change your financial habits as a couple.

•    One partner keeps on running up debts, without paying off old ones.

•    The one with more money is secretive about finances, and uses money to control the relationship.

•    Bills go unpaid when you thought they were taken care of (final warnings start arriving in the post, or the electricity gets disconnected).

•    One partner splurges on gadgets or luxuries without discussing it with the other one first. Or even worse, hides it where they hope the other one won’t see it.

•    One is a scrupulous saver, the other cannot hold on to a penny.

•    Frequent spells of unemployment for no discernible reason.

•    One person has a secret credit card/gambling problem/or cannot account for expenses.

•    You (or your partner) are a sucker for a sob story and often ‘lend’ money to friends.

•    One of you borrows money from friends and family with little or no intention to ever pay it back.

•    You find out your partner was blacklisted in the past, or had things repossessed – and you knew nothing about it at all.

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