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How to Protect My Money in a Relationship

2 Good Ways (and 1 Not-So-Good Option) to Protect You and Your Money in a Relationship

You might think preparing for divorce will be jinxing yourself, but it's actually very practical and highly recommended by financial planners, according to the Wall Street Journal. Here are some options from the WSJ

  • Have a well-padded emergency fund: Treat divorce as an emergency expense and set aside some money that will buffer you through those times. Terry Headley, president of the National Association of Insurance and Financial Advisors, advises to set aside "four to six months' worth of the household income in pooled cash reserves to cover both spouses' costs."
  • Cohabitation agreements: This is becoming a more popular option for couples who are living together. The cohabitation agreements mirror prenups, but they are for those who aren't married. Some couples use these legal agreements to state who's paying for what in the relationship (such as groceries and cable bills), the consequences for cheating on your partner, and how to split the property after a separation. There are apparently a lot of same-sex couples who add in clauses to the cohabitation agreements that grant legal rights that traditionally come with marriages, such as hospital visitation rights.
  • Divorce and wedding insurance: If you've been paying for divorce or wedding insurance, you'll be covered if you have the misfortune of canceling your wedding or getting a divorce. This option isn't favored by a lot of the people because of the negative image it presents, and financial planners aren't fans as well. Glenn Daily, an insurance consultant, says the divorce fund or a good emergency fund would easily foot the expenses that the divorce or wedding insurance would cover and describes it as "insurance you could live without."
Source: Thinkstock
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