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Don’t let money worries ruin your love

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The annual Valentine’s Day celebrations will again see florists run out of red roses, and there’ll be more candlelit dinners than during a rolling blackout. But amid the annual outpouring of romance and Love, Actually DVDs, it’s important to also take steps to prevent money worries from playing havoc with your relationship.

John Manyike, head of financial education at Old Mutual, advises couples to minimise financial tensions by keeping a clear head and agreeing on a few basic rules when they marry or start to live together.

“Differing attitudes towards money, and differing spending and saving habits are the main source of stress in relationships. A couple who are committed and loving in every other aspect of their relationship may find that how they deal with money is a deal-breaker unless they resolve those differences.

“This is particularly true with couples who cohabit, because they don’t have the same rights as married couples. For example, unless some agreement is reached on assets, neither partner will automatically inherit the other’s assets in the event of their death. Even if you’ve been together for many years, South African courts won’t classify you as your partner’s spouse.”

Sadly, this can result in bitter conflicts with your partner’s family members and costly legal actions.

The good news is that you can avoid the pitfalls by taking certain steps. “The first is to acknowledge that each partner has an equal right to feel financially secure in the relationship, irrespective of who earns what.”

This is important because of the way many couples – married or cohabiting – divide up their responsibilities. For example, women often cover the household’s running costs, such as groceries, school fees, uniforms, water and electricity. Men often cover costs like home loan and car repayments, and insurance premiums. “While this can seem like a convenient, logical approach, it can result in women being disadvantaged if the relationship ends,” says Manyike.

To make sure you avoid these problems, agree to get the help of a legal adviser, who can provide objective input on formalising your living together arrangement. This may include:

  • A written agreement – called a cohabitation agreement – in which you set out your obligations and rights as members of a couple. This becomes a legal document, so it needs to be carefully thought through.
  • A civil union, in accordance with the Civil Union Act, which includes an antenuptial contract in which you agree to be out of community of property, with or without the accrual system. This establishes whether you share each other’s assets and are entitled to a portion or half of your partner’s, and so on, and whether you’d be equally liable for any debt either of you incur.
  • Updates on changes to the law: it’s still unclear when the proposed Domestic Partnership Bill will come into effect, but once it does, it will clarify and strengthen the financial rights of couples who live together.

Manyike advises couples to speak to a financial advisor to help you craft a financial plan and a will, which will stipulate your last wishes in terms of how you would like your assets to be distributed in the event of your death and give your loved ones peace of mind and security.

You can empower yourselves to do even greater things with your money – individually, and as a couple – with the guidance of Old Mutual’s free online On The Money financial education programme, which uses the habits of Africa’s Big Five to illustrate good financial habits. Register for a free online workshop on www.oldmutual.co.za/financialeducation.


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