Out with the prenup and in with the pronup!

February 25th 2020 | Categories: Money, Family & Relationships | Financial Planning |

We’re all familiar with the famous prenuptial agreement but what if there was a better way to handle your finances in a relationship? We want to introduce you to a new agreement that leaves the negative stigma of relationships and money behind and comes with a positive twist in the hope of making those “I do’s” last a lifetime. Introducing the pronup!

Are you looking towards the future however aren’t sure how to finance it? Talk to us today about how to structure a financial plan that starts with your dreams and goals.

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What is a pronup?

Unlike a prenup, which is a contractual agreement determining what your legal and financial rights are in the case of divorce, a pronup is designed to see your relationship succeed without anticipating separation. A pronup is a personalised financial agreement made with you, your partner and your financial planner that will help you work towards your goals and dreams together. Whether we want to admit it or not, money can be a massive pain point in relationships. In fact, it’s the number one reason for divorce in Australia.

You don’t have to be married to have a pronup! A pronup will work for any relationship regardless of what stage it’s at. With the guidance of your financial planner, the pronup will help you identify each other’s financial dreams and goals as well as have an open discussion around your financial position. You will then be presented with a joint financial plan giving you a holistic view of your finances and identify where you’re best investing your money for the future.

What makes a pronup different

Money can be difficult to manage in any relationship regardless of how long you’ve been together or what stage your relationship is at. You may find areas where finances aren’t completely transparent or you’re working on your goals individually and not as a couple. A pronup paints an honest picture of where each person is now and where they want to be in the future. If you finding you’re having regular arguments over money a pronup could benefit you greatly as it considers both sides of the couple and your individual expectations around what needs to be done to achieve your goals. It helps money conversations flow and takes the pressure off the numbers and the responsibility of one person in the relationship managing cashflow and accounts. A pronup leaves you both on the same page so you can focus on enjoying your free time together.

Here are 10 money conversations to have when your relationship heats up. If you struggle to have conversations with your partner about money this could make a huge difference to your relationship. You may also find our article on how to talk about money with your partner useful.

How does a pronup work?

A pronup works in similar ways to a usual financial plan, however, it is joint between partners and tailored around each other’s individual goals as well as shared goals. You can read more about what your first meeting with an adviser looks like here. Once you agree on your financial plan you will both have to be accountable and responsible for sticking to your plan and staying on track to reach your goals. You will have an annual review of your plan with your financial adviser to evaluate your progress and make any necessary adjustments.

You may be questioning if a pronup is right for you or if it’s worth paying to see an adviser. Perhaps you have your own financial plan but not sure if making a joint account is the right decisions for you.

When to consider a pronup

• Merging bank accounts or finances
• Moving in together
• How to split bills on different incomes
• Managing Super accounts
• Buying a house together
• Different Salaries or single income
• Managing finances when having a child/children
• Unaware of your own or each other’s goals and how to achieve them
• Difficulties having conversations around money
• Unclear of your financial future
• Unsure of where to invest your money
• Arguments over finances

By creating a joint financial plan, you will not only have more confidence that your finances are on track but you will also be more mindful of each other’s goals and dreams. With one in three people keeping money secrets from their partner, having a clear plan and a strategy for the future could be the key to a successful and long relationship.

It can be difficult managing finances in a relationship. Our advisers are here to provide you with a clear financial plan forward that takes into account yours and your partner’s dreams and goals. Reach out to Invest Blue today to discuss if a pronup is right for you.

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What you need to know

This information is provided by Invest Blue Pty Ltd (ABN 91 100 874 744). The information contained in this article is of general nature only and does not take into account the objectives, financial situation or needs of any particular person. Therefore, before making any decision, you should consider the appropriateness of the advice with regards to those matters and seek personal financial, tax and/or legal advice prior to acting on this information. Read our Financial Services Guide for information about our services, including the fees and other benefits that AMP companies and their representatives may receive in relations to products and services provided to you.