How to protect your money from a relationship breakdown

Few of us like to think about the end of a romantic relationship, but having a plan for how you’ll manage your money if it happens could shield you from financial heartbreak.

Break-ups are never fun, but when money is in the mix, they can become particularly complicated. Although few of us enter a relationship anticipating the end, having a plan to protect your money is smart. So below, we've outlined a few ways you can navigate this topic.

Have the important conversations.

Lots of people find talking about money awkward or unpleasant, especially in the early stages of a relationship, we know it isn't the most romantic conversation. However, knowing where each partner stands can save time and pain down the track.

Consider setting aside some time with your partner to talk about your overall money philosophy – such as future aspirations – and also what you would do in the case of separation. For example, you could talk about whether each partner would take out the assets or belongings they brought into the relationship.

While things can and do change when break-ups happen, having an understanding of each other’s preferences can be a good foundation for further discussions.

Consider keeping separate bank accounts.

A joint bank account has many advantages if you’re pooling your income and spending or saving for the household. However, retaining your own bank account – even as a secondary account – gives you independence and can make things a little bit simpler if you separate down the track.

Think about a financial agreement.

If you have assets you’d like to protect in the case of a break-up, you may consider a pre-nuptial or binding financial agreement. Essentially, the legal document dictates who will end up owning which assets if you split up with your partner. For example, a document may be drafted to ensure each partner leaves the relationship with the same pool of assets they brought into it. Before going down this path, you’ll need to seek legal and financial advice.

Speak to experts and people you trust.

On the topic of advice, it’s often worth getting a second opinion about your unique financial circumstances. You may turn to a financial adviser or a lawyer, depending on your preferences. You could also reach out to a trusted friend or family member for informal guidance.

If you’re struggling with money in the context of your relationship or otherwise, you can always call the National Debt Helpline on 1800 007 007 or speak to a relationship counsellor.