When a couple is in love, it is tempting to merge every aspect of their lives together.  However, nothing is guaranteed to last forever and mixing money can often prove to be a devastating financial move for couples in the long run.

Smart Money, Smart Couples

Unfortunately, more than half of all couples end up splitting apart in the long run.  While it can be less expensive for couples to live together, mixing their incomes in joint accounts may end up costing them more money as things end.  When living together, there may be expenses that are easier to pay together.  However, for the most part, even married couples do better financially by keeping separate accounts and making large purchases separately.

One of the things that often happens is one person makes more money than the other in a couple.  The person making the most money may feel they need to pay off credit cards and other bills in order to show their love.  However, what this action translates into is one person spending a great deal of money and the other not being held responsible for their own spending habits.  If they end up splitting, there is no likelihood of being paid back this money, especially if it is a substantial amount.

Couples also often cosign for large purchases, such as a car or house.  Whether a couple is married or not, unraveling the legal issues and their finances if they call it quits can be extremely difficult.  Almost always, a couple will need to engage the services of a mediator and attorneys to make sure they cover all the legal bases, especially when home ownership is involved.  They may decide to sell the house and split any profits after paying off the home loan.  Alternatively, one member of the couple may buy out the ownership of the other party.  However, neither of these solutions are often easy, particularly in the current economy.

One frequent recommendation for couples is that they have three separate bank accounts.  One account is a joint account that is used for household expenses, such as groceries and utilities.  Both parties contribute an agreed-upon amount to this account each month.  The other two accounts are personal accounts for each party.  In these accounts, they keep their remaining income and pay for their own personal bills.

An even smarter move is for couples to negotiate a written agreement regarding financial commitments before moving in together.  This type of agreement outlines exactly how money will be spent by each person and how assets will be divided in the event of a split.

Negative Consequences of Assumptions

Unfortunately, many couples do not think carefully about their finances when they agree to live together.  In many cases, one member of the couple is left dealing with the financial consequences of poor financial management.

In the case of cosigning for a car, for example, if the person who is supposed to be making payments stops, the other party is still held financially responsible for making the payments.  The same is true for jointly held credit cards and other accounts.  When a couple splits, it is very common for one person to simply decide they no longer want to make payments on joint accounts, leaving the other partner to pay those bills.

Ultimately, it is important that couples think carefully about their financial choices.  For couples who choose to live together, even if they are married, it is important to write down agreements regarding financial arrangements and provide remedies if they decide to separate at some point.  By keeping finances separate as much as possible, individuals can avoid additional heart ache that can come from a relationship unraveling.

This article was written for orlandodivorcehelp.com. Financial issues often cause friction in relationships, especially marriages. Occasionally friction over finances can lead to divorce; click here to view an Orlando divorce attorney to learn more about divorce issues.