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Couples: Keep finances separate during the early stage

Financial experts have an important piece of advice for unmarried couples who are just embarking down the road of life together: Keep your finances separate.

At least, you should keep them separate for a little while, anyhow. Naturally, most couples believe that they'll be together forever -- but given the often-fluid nature of relationships in the modern world, keeping your fiances untangled until you've been together for at least a year is a wise idea.

Here's why:

1. If a bank account list both of you, you both have an equal right to it. If your relationship falls apart, there's no guarantee your partner will play fair and only take his or her share of the money.

2. Debts work in a similar fashion. If you and your partner open joint credit cards, the credit card companies won't care who ran up what card or really owes what debt according to your agreement. As far as they are concerned, both of you owe the whole debt. If your partner defaults on his or her share, you're on the hook.

3. It might seem like a reasonable thing to pay half the mortgage if you're moving into your partner's house. Similarly, you might want to pay half the car payment or lease. However, that allows your partner to gain all of the equity in the property or car, while you gain nothing if you end up splitting. Do not pay on any real property or major purchases (like a car) unless it is in both of your names.

4. If you become too financially dependent on your domestic partner, you could be in trouble if your relationship sours. For example, if you quit your job to pursue your art career because your partner has plenty of income, that could leave you with an unfortunate gap in your resume if you suddenly need to head back to work. There's no guarantee that the court will order any kind of financial support between unmarried couples.

Perhaps the best thing that unmarried couples can do before they move in together is sit down and talk about money. Be realistic. As unpleasant as it may be, discuss what you think should happen regarding your money and assets while you're together -- and what you think should happen if you split up. The resulting conversation may be revealing -- and save you from a mistake.

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