ARE you ‘financially undatable’?
New research by Hargreaves Lansdown shows that, if you’re young and single, but the cash don’t jingle, it can seriously affect your chances of finding true love.
Apparently over half of people would not date someone they knew had financial problems – and only one in five would.
And my son tells me it’s hard enough to get off at the best of times.
Low earners are most likely to run a mile from a person with financial problems, for obvious reasons: if you’re already on the ropes financially, all you need is another millstone round your neck. A problem partner could really finish you off.
It’s not a concern that’s limited to first-time-rounders, either.
Divorcees are most likely to avoid someone with financial problems, possibly because they’ve seen it all before: 95 per cent of divorcees said they’d never consider dating a partner who was deep in debt. There’s also the fact that divorcees are older, and in later life all you need is another financial meltdown like your recent divorce.
So how do you find out if the new squeeze is financially stable or financially unreliable? Let’s face it, very few people volunteer details about their finances from the outset, and for your part, you might be afraid to ask for fear of sounding mercenary.
However, anyone who’s ever watched an episode of ‘Judge Rinder’ will know that it’s better to grasp the nettle at the start, and, unpalatable as it may be at the time, formalise any financial agreements that you do make.
If you are a smitten kitten, and you don’t want to walk away from a relationship despite the financial cracks, there are a number of things you can do to protect yourself.
First, think long and hard before you take out any joint financial products with your new partner, because if you do, your credit records will be linked. That means if your partner runs up debts or misses payments on any of their cards or bills, it also blots your copybook, and could affect your ability to borrow in the future.
Second, steer clear of having one credit card account where you both have a card. These have only one name on the account, and if that name is yours you are responsible for the entire bill, even if your second cardholder fails to repay.
Around this time, you may discuss moving in together. Besides the romance of a stronger commitment, and the obvious economies of scale, paying only one rent etc. - moving in together is a minefield, and you should proceed with caution.
If you have a mortgage, and your partner moves in with you and then makes contributions towards the mortgage or house improvement projects, it could spell trouble. If, later, your partner runs off with the local barmaid or the DPD delivery man, they could go to court and apply for an ‘interest’ in your house, and the court could award them part of your home’s value. One good precaution to take here would be a ‘cohabitation agreement’.
And if, in time, the sweet music of violins wells up, and you decide to get married, you should consider drawing up a prenuptial agreement or ‘pre-nup’.
A pre-nup would set out how you wish to divide your debts, and could ensure that your partner remains responsible for any debts he or she made before you two got together. Mind you, you’ll still be responsible for any joint debts.
Now, a pre-nup is not legally binding, but it is well regarded by the courts, and is usually upheld, provided it has been done right. Having the difficult stuff set down on paper can take a lot of heat out of an otherwise acrimonious situation.
Of course, the best step you could take would be to avoid all these problems by working on your finances now, making yourself financially healthy before even considering a new relationship. Go on. Put a big smile on Judge Rinder’s face. Come in to see us today.
Michael Kennedy is an independent financial adviser and pensions specialist and can be contacted on 028 71886005. Further information on Facebook at Kennedy Independent Financial Advice or at www.mkennedyfinancial.com
