Mums Finance

We like to think that we will meet ‘the one’ and live happily ever after, but reality says different. It is nice to think that when you are together your finances should be combined – well you both trust the other don’t you…? – but in fact it is better for both of you to maintain your own finances independently.Joint finances might work while you both do – but if you split…? what are the implications of joint and several liability?

These days with the recession, the priority for many couples will be sorting out debts and other joint liabilities, such as household bills. Many people do not realise that with joint loans, overdrafts or credit cards, both parties are liable for the full amount. This is known as “joint and several liability”. It means that if, for example, you have a £10,000 loan with your ex-partner, you will not owe £5,000 each — you will both owe the full amount.

Joint and several liability can also apply to rent or mortgage arrears, as well as council tax, utility and other household bills. It is, therefore, important to ensure that your name is removed from all bills before moving out of the property. An old partner’s finances may also have an impact on your credit rating. If a couple share any form of joint bank account or credit, such as a loan, this “financial connection” will appear on both party’s credit ratings.

If your partner or ex-partner has a bad credit rating and you have a financial connection with them, this will have an adverse effect on your rating as well. This is why it is very important to keep your finances totally separate for at least six years from when your partner had debt problems — since it takes that long for their record to become clean again. Once you have severed all financial connections from your partner, you can write to a credit-reference agency — Experian, Call Credit or Equifax — to “dissociate” yourself from your ex. The agency will share this disassociation with the others, so only one needs to be contacted.

Also remember that your ex-partner will have access to any savings and current accounts in joint names. So it is vital to ensure these assets are divided fairly at the outset of a separation.

Popularity: 16% [?]

If you will admit it you would not be the only parent to have broken into junior’s money box at some stage when you have needed a bit of extra change. I’ve done it for sure but my kids have definitely profited more than they have lost over the years…

A fifth of parents admit they have dipped into their child’s savings account to make ends meet, a survey showed today. Around 22 per cent of parents said they had been forced to raid their child’s savings, with 44 per cent borrowing between £200 and £500, according to savings provider Engage Mutual Assurance. Four out of 10 parents said they were forced to use their child’s savings to pay bills, while 20 per cent faced unexpected car repairs.

Around 14 per cent used the money to pay for a family holiday, 12 per cent needed it to cover the cost of house repairs and 8 per cent put the money towards the cost of Christmas. Two-thirds of parents said they only borrowed money from their children when there was no alternative, and 13 per cent said they did not know where else they could get the money from quickly. Eight out of 10 parents who borrowed money said they saw it as a loan and would pay it back when they could.

But 30 per cent of parents admitted they felt guilty about borrowing money from their children and 27 per cent said they felt sad that their financial situation had become so dire. But look at it this way – you enable your kids to save, you provide them with the funds to do so – so what is the problem with taking back some of that which you gave them…?

Popularity: 13% [?]

Thousands of desperate savers are having their cash returned by Government-run National Savings every day following a record rush for one of its top deals. Savers whose incomes have been stripped bare by the fall in the base rate swamped National Savings with requests for a leading one year bond paying 3.95 per cent, and a two-year deal at 4.25 per cent. But after just 24 days the rates were pulled – the shortest time one of its savings products has ever been on sale.

Now thousands who hoped to have their meagre monthly incomes boosted by the deal, are having their cheques returned. At the last count more than 1,000 a day were being posted back. Many more applications are still to be received from savers who never realised the rates had been withdrawn. They will now be forced to seek out one of the lesser deals from elsewhere on the high street – the Post Office is doing a one year growth bond at 3.70% fixed for one year and a 4.25% rate for the two year deal.

This will be a further blow to those whose incomes have been devastated by the fall in the Bank of England base rate to a record low of 0.5 per cent. In some cases investors are getting just £8 interest a year for £10,000 of savings. If you do not need to depend on an income from your savings for the time being it would also do to look at investing in gold, shares or otherwise.

Popularity: 14% [?]