5 Ways to Financially Protect Yourself in a Relationship

When I read the words we put on the page, my stomach started to feel queasy.

I silently recited my mantra (“What would I tell a client to do?”) and put my pen to paper, scrawling my name across the black line. A few minutes later, our co-tenancy agreement was all done.

Without getting too mushy, I have to tell you: I love my boyfriend. He’s one of the most amazing men on the planet, and he’s the best father. I seriously couldn’t have dreamed of a better partner to go through life with. 

We aren’t married, though. Maybe we will one day, but the decision is ours to make.  

Married or not married, we’ve certainly had a plan. We bought a home a few years ago with three bedrooms and we were lucky enough to have a baby right when we’d planned.  

However, as my partner likes to remind me: We make plans, God laughs. Which brings me back to 2012 when I was queasily signing an agreement that spelled out the division of property if things went downhill. 

Protecting yourself in a relationship isn’t about being defensive, secretive or putting up walls. It’s about being smart and loving yourself and your partner enough to determine what’s fair, both now and in the future. 

Here are 5 ways to protect your relationship from financial damage.

1. Keep what’s yours, yours. 

Normally in relationships, you take the good with the bad. However, when it comes to financial matters, you actually can pick what you’ll take on and what you won’t. If you want to keep what you’re bringing into the relationship, keep it separate. 

For example, if you inherit $15,000 from your grandma, that’s likely going to be considered separate property. If you deposit the check into your joint bank account, your separate property just became marital property. 

I have a friend who paid for her home before she got into a relationship with her husband. Rather than put his name on the house when they got married, she kept the house in her name and keeps it as a separate asset in her relationship. Smart lady. 

Don’t say “I do” to debt. Just because your soulmate is strapped with student loans or credit card debt doesn’t mean you have to bear the burden, too. But here’s where the soul-bearing begins: you’ve got to know what each of you have before you come together, whether it’s a marriage or a mortgage. 

Remember your personal savings goals. It’s easy to skip your regular 401(k) or IRA contribution for the sake of saving for a down payment for your dream home. Be realistic about your own financial situation and your long-term priorities.

2. Talk it out. 

Before you commit to a big purchase or a big event together, sit down with your partner and discuss your financial situation in depth. It’s embarrassing and uncomfortable, and probably makes the first time you slept over look like a walk in the park; but I promise you, it’s worth it.

If you’re doing a joint budget or thinking of living together, it’s important to know what each person can truly commit. Don’t stretch yourself thin just to meet your partner halfway and don’t expect the same if your partner makes less than you. Come to an agreement. It may be a less expensive place, or the partner who makes more might pay a little more. “Fair” is a relative term — don’t blow your budget for the sake of romance.

If you’re getting married, find out now if there are debts that your partner is paying off and come clean about yours. Going “dutch” is cute on a date, but not for an entire education that predates your relationship.

Get your hopes and expectations out in the open. Are you hoping he’ll want to be a stay-at-home dad so you can keep killing it in your career when you have little ones? Does the idea of you being a stay-at-home mom cause your partner to break out in a cold sweat?

While you never know exactly how the future will unfold, if you have very clear desires or expectations, it’s better to understand them now and plan ahead rather than fly by the seat of your pants years later.

3.  Put it in writing.

Talked it out? On the same page and feeling awesome about your future? Great! Put it in writing. A great conversation over dinner one night is not going to be enforceable if you need to rely on what you agreed upon. 

The majority of premarital agreements are created and never signed, yet the divorce rate is still somewhere around 40 percent. There is a stigma around these agreements that conjures up images of gold diggers and messy trials, but in reality these agreements can be hugely beneficial. They shed light on the existing financial picture and help you to discuss money with your future spouse. 

My partner’s and my co-tenancy agreement sure wasn’t romantic, but I know that we are now both protected if something happens. You can create a co-tenancy agreement with an attorney and spell out the division of the proceeds of your home in the event of a sale. You can also sketch out the terms of any dissolution of the partnership with regard to the property. 

Creating a roadmap in writing for how you see your assets picture working can be helpful for your relationship and how you decide to move forward. How do you want to use your inheritance from your great aunt? What if your partner quits his six-figure job to stay home with the kids while you continue to work? You can’t plan for everything, but it is important to have these conversations and agreements spelled out on paper before taking a big leap.

4. Call bullsh*t on “should.”

You don’t have a joint bank account? You should! 

What’s yours is mine, and what’s mine is yours. 

You should be grateful to have such a wonderful relationship; don’t plan for something bad to happen! 

There are so many pieces of advice that women endure when taking a big step in life. During my pregnancy alone, I think I heard the word “should” about 150 times a day.

Go with your gut. If you have savings that you worked your butt off to accumulate and you don’t want to put your partner’s name on the account, don’t. If doing the “right” thing rubs you the wrong way, guess what? It’s not the right thing for you. 

5. Connect with a professional.

Thinking about taking the next step in your relationship? Check in with a financial planner. Many planners also now have Certified Divorce Financial Analyst designations. This doesn’t mean you’re planning a divorce; it means that you want to better understand how to handle your assets when you’re combining your financial lives. 

The run up to a big event, whether it’s a move or a wedding, can be stressful. Adding one more to-do to the list can seem even more daunting, but it’s worth it. The time you put in before you take a big step can save you stress and anxiety for the long haul.  

Emily Boothroyd is a member of the DailyWorth Connect program. Read more about the program here.

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