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How Unmarried Couples Who Live Together Can Protect Their Interests

How Unmarried Couples Who Live Together Can Protect Their Interests

It is common for many couples to live together long-term without getting married, irrespective of whether or not they are planning to do so in the future. Couples living with each other sometimes wrongly believe that they can exercise the same legal rights as spouses or civil partners when it comes to ownership of financial assets in situations of the death of one of them, or the break up of the relationship.

Regardless of the length of time of your relationship, there is little to no legal privilege in regard to your finances. In absence of the default protection that marriage gives (or common-law marriage in countries where that has some legal recognition), you will have to do something extra.

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In order to protect yourself and your interests, and also those of your partner, you need to be aware of your rights and strengthen them where possible.

Financial Protection For Couples Who Cohabitate

With respect to financial protection for unmarried couples, there are certain voluntary arrangements that can ensure rights equivalent to married couples.[1] Making a will is one of them.

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Despite recent rumors that UK intestacy laws, which set out how property is inherited on the death of a partner who has not made a will, would undergo changes, mainly as a result of the Law Commission’s recommendations that change is needed, cohabitating, unmarried couples have not been given automatic rights to inherit a partner’s property after their death.

The legal position may change in the future, but for now it is safest to make a will.

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So, to protect your interests in the case of partner’s death or break-up – couples living together should assess all parts of their life together. This includes childcare arrangements, property ownership, and financial provisions. A declaration of trust arrangement and a cohabitation agreement can help.

They are legally binding and can help in determining the ownership of assets.

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  • The declaration of trust, or deed of trust, sets out clearly all assets that each partner owns at the start of a relationship. It also entails what would happen to these assets if the couple splits up. You can treat it like a contract in which payment of bills and extra value, such as home improvement payments, can be settled or divided. It is basically linked to particular properties.
  • A cohabitation agreement is a “living together agreement” that covers daily matters like the household expenses and other relationship-specific circumstances. It can include details like childcare finances, school fees of kids, joint accounts, and paying debts. Such agreements cannot be altered without the approval of both.
  • Each partner is entitled to equal property rights in the case of a legal marriage, irrespective of who owns, maintains, or pays mortgage for it. But, for live-in couples, things are not that easy. All contributions, such as a mortgage or cash investments, should be included in the declaration of trust.
  • Also, couples buying a house together need to ensure that an appropriate legal structure is used so that ownership of the property automatically passes on to the partner after the death of the other. This is known as “joint tenancy”. Under this, both partners are property owners, such that if one dies, the survivor becomes the sole owner.
  • Under the new auto-enrollment scheme, all employees of an organization pay into the same workplace pension. Be aware that cohabitating couples cannot automatically claim any pension money due to their partner if their partner dies after or before retirement.
  • Investments and savings also need to be included in the cohabitation agreement. Otherwise, you will have no legal right to the wealth after splitting up or the death of a partner. You can agree between you that if investments and savings are jointly owned, both contributors get back the same proportions, as whatever they contributed after the relationship ends.
  • Consider this warning as well. If the couple is using a bank account for joint finances – a joint account – then this account needs to be listed in the cohabitation agreement. For jointly owned bank accounts, both partners have equal rights to the money in that account. Also consider what happens in the case of death. If the account is really just owned by one person and the other accesses it, a surviving partner will have no right to the money.
  • Child maintenance can also be claimed from an ex-partner. More extensive financial provisions can be added in the cohabitation agreement, but be aware that child arrangements are ultimately decided by a judge. Even children who are not related biologically to either or one of the partners, but who are family members, will be entitled to be maintained.

Living together and investing in property with your partner is an incredible experience, but be smart and protect yourself and your interests during a relationship.

Featured photo credit: betterment.com via betterment.com

Reference

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Adnan Manzoor

Data Analyst & Life Coach

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Published on November 20, 2018

The Best Ways to Save Money Even Impulsive Spenders Can Get Behind

The Best Ways to Save Money Even Impulsive Spenders Can Get Behind

The truth is, there are many “money saving guides” online, but most don’t cover the root issue for not saving.

Once I’d discovered a few key factors that allowed me to save 10k in one year, I realized why most articles couldn’t help me. The problem is that even with the right strategies you can still fail to save money. You need to have the right systems in place and the right mindset.

In this guide, I’ll cover the best ways to save money — practical yet powerful steps you can take to start saving more. It won’t be easy but with hard work, I’m confident you’ll be able to save more money–even if you’re an impulsive spender.

Why Your Past Prevents You from Saving Money

Are you constantly thinking about your financial mistakes?

If so, these thoughts are holding you back from saving.

I get it, you wish you could go back in time to avoid your financial downfalls. But dwelling over your past will only rob you from your future. Instead, reflect on your mistakes and ask yourself what lessons you can learn from them.

It wasn’t easy for me to accept that I had accumulated thousands of dollars in credit card debt. Once I did, I started heading in the right direction. Embrace your past failures and use them as an opportunity to set new financial goals.

For example, after accepting that you’re thousands of dollars in debt create a plan to be debt free in a year or two. This way when you’ll be at peace even when you get negative thoughts about your finances. Now you can focus more time on saving and less on your past financial mistakes.

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How to Effortlessly Track Your Spending

Stop manually tracking your spending.

Leverage powerful analytic tools such as Personal Capital and these money management apps to do the work for you. This tool has worked for me and has kept me motivated to why I’m saving in the first place. Once you login to your Personal Capital dashboard, you’re able to view your net worth.

When I’d first signed up with Personal Capital, I had a negative net worth, but this motivated me to save more. With this tool, you can also view your spending patterns, expenses, and how much money you’re saving.

Use your net worth as your north star to saving more. Whenever you experience financial setbacks, view how far you’ve come along. Saving money is only half the battle, being consistent is the other half.

The Truth on Why You Keep Failing

Saving money isn’t sexy. If it was, wouldn’t everyone be doing it?

Some people are natural savers, but most are impulsive spenders. Instead of denying that you’re an impulsive spender, embrace it.

Don’t try to save 60 to 70% of your income if this means you’ll live a miserable life. Saving money isn’t a race but a marathon. You’re saving for retirement and for large purchases.

If you’re currently having a hard time saving, start spending more money on nice things. This may sound counterintuitive but hear me out. Wouldn’t it be better to save $200 each month for 12 months instead of $500 for 3 months?

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Most people run into trouble because they create budgets that set them up for failure. This system won’t work for those who are frugal, but chances are they don’t need help saving. This system is for those who can’t save money and need to be rewarded for their hard work.

Only because you’re buying nice things doesn’t mean that you’ll save less. Here are some rules you should have in place:

  1. Save more than 50% of your available money (after expenses)
  2. Only buy nice things after saving
  3. Automate your savings with automatic bank transfers

These are the same rules that helped me save thousands each year while buying the latest iPhone. Focus only on items that are important to you. Remember, you can afford anything but not everything.

How to Foolproof Yourself out of Debt

Personal finance is a game. On one end, you’re earning money; and on the to other, you’re saving. But what ends up counting in the end isn’t how much you earn but how much you save. Research shows that about 60% of Americans spend more than they save.[1]

So how can you separate yourself from the 60%?

By not accumulating more debt. This way you’ll have more money to save and avoid having more financial obligations. A great way to stop accumulating debt is using cash to pay for all your transactions.

This will be challenging, depending on how reliant you are with your credit card, but it’s worth the effort. Not only will you stop accruing debt, but you’ll also be more conscious with what you buy.

For example, you’ll think twice about purchasing a new $200 headphone despite having the cash to buy them. According to a poll conducted by The CreditCards.com, 5 out of 6 Americans are impulsive spenders.[2]

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Telling yourself that you’ll have the discipline to not buy things won’t cut it. This is equal to having junk food in your fridge while trying to eat healthy–it’s only a matter of time before you slip. By using cash to make your purchases, you’ll spend less and save more.

A Proven Formula to Skyrocket Your Savings

Having proven systems in place to help you save more is important, but they’re not the best way to save money.

You can search for dozens of ways to save money, but there’ll always be a limit. Instead of spending the majority of your effort saving, look for ways to increase your income. The truth is that once you have the right systems in place, saving is easy.

What’s challenging is earning more money. There are many routes you can take to achieve this. For example, you can work long and hard at your current job to earn a raise. But there’s one problem–you’re depending on someone else to give you a raise.

Your company will have to have the budget, and you’ll have to know how to toot your own horn to get this raise. This isn’t to say that earning a raise is impossible, but things are better when you’re in control right? That’s why building a side-hustle is the best way to increase your income.

Think of your side-hustle as a part-time job doing something you enjoy. You can sell items on eBay for a profit, or design websites for small businesses. Building a side-hustle will be on the hardest things you’ll do, be too stubborn to quit.

During the early stages, you won’t be making money and that’s okay. Since you already have a source of income, you won’t be dependent on your side-hustle to pay for your expenses. Depending on how much time you invest in your side-hustle, it can one day replace your current income.

Whatever route you take, focus more on earning and save as much as possible. You have more control than you give yourself credit for.

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Transform Yourself into a Saving Money Machine

Saving money isn’t complicated but it’s one of the hardest things you’ll do.

By learning from your mistakes and rewarding yourself after saving you’ll save more. What would you do with an extra $200 or $500 each month? To some, this is life-changing money that can improve the quality of their lives.

The truth is saving money is an art. Save too much and you’ll quit, but save too little and you’ll pay for the consequences in the future. Saving money takes effort and having the right systems in place.

Imagine if you’d started saving an extra $100 this next month? Or, saved $20K in one year? Although it’s hard to imagine, this can be your reality if you follow the principles covered in this guide.

Take a moment to brainstorm which goals you’d be able to reach if you had extra money each month. Use these goals as motivation to help you stay on track on your journey to saving more. If I was able to save thousands of dollars with little guidance, imagine what you’ll be able to do.

What are you waiting for? Go and start saving money, the sky is your limit.

Featured photo credit: rawpixel via unsplash.com

Reference

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