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It’s Valentine’s Day next week.  I love this time on the calendar. I had my first date with my husband (coincidentally) on Valentine’s Day.  And that has, so far, worked out pretty well.

But not everyone is so lucky in love.  And, hard as it is to think about the consequences when you’re feeling the first flush of new romance, it’s no bad thing to consider:  What happen when a relationship goes wrong?

Because there is nothing more likely to exacerbate the pain of breaking up than a squabble about money.

Many people ignore or are ignorant of the financial risks a new romance can bring.

Now you may be thinking you don’t have any money to lose, so why should you worry?  Let me encourage you to think again.

How can it happen? Well, if you’ve lived together, you probably have joint assets like a house.

If a partner runs up debts on a credit card, the credit card company can force a sale to recover a debt.

What if your partner is a self-employed person doesn’t lodge tax returns for a long time? When they eventually do, there is a huge tax bill that can only be paid off through selling your house.

How about if your partner runs up massive debts on an additional card that you’ve given them?  The responsibility lies with you to repay, even after breaking up.  Arghh!

It’s important that you avoid having to pay back a partner’s debt, not only because it could send you broke, but it may affect your own credit rating and your ability to get a loan in the future.

Think ahead and take these 3 steps before jumping into bed  – financially, that is.

Talk about it – Before you get serious and definitely before you start to share a joint bank account, joint credit cards, co-signing loans, moving in together or signing up to phone plans, make sure you have a conversation about money.  You need to agree who owns what, who owes what, what taxes are outstanding and what you hope to achieve with your finances.  It’s totally unromantic, I get it, but seriously who cares, we’re talking about your ongoing personal wellbeing.

Insist on transparency – Make it hard for each other to financially cheat by deciding to share with each other what you have and what you owe. I’m talking eyeballs on bank statements. You might want to use a financial program like Xero where you can see each other’s information but you can’t access the funds.

Always seek professional advice – It’s so important to understand the worst case scenario or to be made aware of the implications of having jointly owned assets or liabilities. The ramifications your partner can’t pay or incur debt can be life-changing. And not in a good way.