A smarter proposal

Money can’t buy you love, but thinking about your finances can help in the long run, says Adam Aiken

With Valentine's Day just gone, many people will have popped the question and, with a bit of luck, a similar number of people will have said yes.
Talking money will be the last thing on the minds of those swept up in the excitement of the occasion. Indeed, if finances really are top of your list at this time, you could do with taking another look at your priorities.
But while money doesn’t guarantee happiness, being open with your future spouse or civil partner can help you make the most of your situation, as well as engendering a feeling of trust.
A recent study suggested that one person in six has a secret bank account. This is not a new phenomenon; a few years ago, one high-street bank even coined a name for this type of account – “Cashflo”, or Current Account Secretly Hidden From a Loved One.
If that’s the way you want to play it, that’s fine. In fact, it’s not necessarily a bad thing – lots of people have secret savings simply to maintain a sense of independence rather for anything sinister.
But even if you’re building up a stash without your partner’s knowledge, it’s important to share responsibility for at least basic finances. It could save money, too.

JOINT PROTECTION
Under the Financial Services Compensation Scheme, each saver’s first £50,000 in any authorised institution is guaranteed by the government should that provider go under.
So if you have £80,000 in Bank A, you could consider moving at least £30,000 of it into Bank B. However, that may mean some of your money earning a lower rate of return, so instead you could leave all the money in Bank A and transfer £30,000 into your other half’s name.
Another option is to open a joint account. By having two names on the account, the government protection is automatically doubled to £100,000.

SHARING THE BENEFITS
Some of the best credit cards on the market offer rewards for loyalty, but only with a minimum spend.
American Express, for example, has a generous cashback scheme, but it only if you spend more than a certain amount. It might make sense for you to pool your resources with a joint credit card to give yourselves a better chance of reaching the minimum annual spend.
This might all sound a bit unnecessary, but every little helps – particularly if you have an expensive wedding on the horizon.
And why not put all the bits and pieces you save over the years into a fund that could pay for the holiday of a lifetime to mark one of your big anniversaries in the future?

For more personal finance news, views and analysis, visit www.mymoney24.co.uk

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