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What to do if your partner is not flash with cash

Pictured: A shocked young woman holding a phone and a piggy bank. Image: Getty
Does your partner have an STD: Sexually Transmitted Debt? Image: Getty

They’re funny, kind, intelligent and unbelievably attractive, but here’s the catch: your new partner is terrible with money.

It’s a problem that can spell the end of a relationship.

“You may not think love and money go hand in hand, but financial compatibility can be really important when it comes to finding and maintaining a healthy partnership,” Mozo director Kirsty Lamont explained.

“Being on the same page when it comes to money takes one major source of stress out of a relationship, especially once you get to the point where you’re combining your savings or making big financial commitments together.”

In fact, nearly half of Australians say that if their partner had $10,000 in debt, the relationship would end.

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Additionally, new research from Finder released today found that 2.7 million Australians will hide purchases from their partner, with clothing and adult entertainment the main culprits.

Source: Finder
Source: Finder

That adds up to $1.6 billion a year on secret purchases, and can leave a major dent on future goals.

“If you’re merging finances and moving in together, you’ll probably need to have a conversation about money and spending habits,” money expert at Finder, Bessie Hassan said.

“After all, if you plan on buying a home together down the track, both your credit scores will be considered. If your partner has a bad credit score, it’ll impact your borrowing power as a couple.”

What to do if your partner is awful with their finances?

Talk.

Australian finance watchdog, ASIC said it’s important that people aren’t “blinded by love” and feel comfortable communicating openly.

This means talking regularly about budgeting, saving and spending.

But if communicating about your financial situation isn’t enough, it’s time to consider protecting your financial health.

“They say love is blind, and it sure does know how to dull our alertness when it comes to finances. In the exciting early stages of a new relationship, it’s natural to focus on what makes your heart flipflop but money issues can cause lasting damage,” financial adviser and author of On Your Own Two Feet - Steady Steps to Women’s Financial Independence, Helen Baker said.

“To avoid ending up with a sexually transmitted debt, always use protection.”

1. Set shared goals

“Find out early about values, goals, spending styles, and what you both have and owe. Make it hard to financially cheat one another by regularly sharing and updating this information,” Baker said.

Shared goals also help keep each other accountable.

2. Discuss what you’re going to share

According to the Mozo research, 44 per cent of Australians prefer to share finances once they’re in a serious relationship, but 20 per cent preferred to keep their money separate.

It’s important to be open about your expectations around shared credit cards and spending budgets.

For some couples, a shared credit or debit card makes sense. For others, it doesn’t. And if your partner is not good with finances, it’s probably a good idea to avoid entering into any agreement where you will end up with a shared debt.

The same goes for loans.

“A joint loan doesn't mean you're only liable for half the debt. If your partner defaults, you may be liable for the whole amount, including fees, interest and charges, even if your relationship ends,” ASIC warns.

“Think twice before putting your name on a loan that will only benefit your partner.”

3. Protect your assets

A survey conducted by Relationships Australia found that 74 per cent of women and 69 per cent of men had not discussed how they would divide their finances if their relationship ended before committing to their partner.

But if you’re going to buy a house or purchase another major, it’s a good idea to have a solicitor draw up an agreement.

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