Money and Relationships, with Lottie Leefe

💸 How do you split your finances when your partner earns much more than you? How can we spot financial infidelity, and what is financial abuse? How can we start talking about money with a partner?

A recent survey of 600 therapists shows a third reported an increase in clients talking about relationship problems sparked by rising living costs. The therapists also noted that more clients were finding it difficult to leave their partner because of financial concerns.

Our guest today is Lottie Leefe, qualified wealth planner and founder of The Dura Society, offering private client coaching and divorce concierge services, enabling engagement not just with finances, but with overall well-being, relationships and emotions. We talk about money and relationships, how to get organised pre-marriage, handling a divorce and staying sane in the process.

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managing finances jointly

It’s really making sure that you are both seeing each other as equals, whether or not the bank balances reflect that in a monetary sense, but rather understanding that you are in it together and it is a partnership.
— Lottie Leefe
  • It is really important when you are in a relationship to look at the difference between equity and equality and understanding what each partner brings to the relationship. But ultimately at the start you've got to know your numbers both independently and then jointly, look at the household cash flow and your solo cash flow.

  • Then, it is about understanding and establishing what your priorities are as a couple. Where do you see yourselves? What are your goals over the next three years together? Will you be buying a house? Then it is about aligning your values to what you are each doing with your money - we're all individuals and although you might be in a relationship, you're not always going to be aligned.

  • It’s about having a good understanding of what each other's behaviors are and where your comfort levels are. It tends to be that one person will be the money person in the relationship, but it doesn't mean that you can't still be involved with those conversations — so t's having that awareness and then getting yourselves aligned together.

  • One thing about starting these conversations is that the other person might stop being a little bit concerned over the reasons why you are asking these questions. You could talk about the economic climate and go, “look, I am a little bit concerned, I think it would help me to feel more secure if we actually open up honestly and look at what the current position is as a unit because that will help us long term to make so solid decisions.”

splitting finances?

  • When we look at gender equality and earning capacity and earning potential, it's never really going to be the two parties come into a relationship with equal footing financially.

  • It goes back to that decision making responsibility structure and fairness and control. You need to have that open conversation with your partner to allow them to come and fill that space for you and don't let yourself get into debt catching up with them as well. And again, it goes back to that equity versus equality they might have put in more into the house, but it doesn't mean you are less worthy or less valued in that relationship.

  • So it's really making sure that you are both seeing each other as equals, whether or not the bank balances reflect that on a monetary sense, but really understanding that you are in it together and it is a partnership. I think that's a fair way to think about it.

debt responsibilities and economic abuse

  • Generally, the court will assume that any debts accumulated during the marriage are joint debts regardless of whose name the debt is actually in. It also depends on whether they were incurred for the joint benefit of them or your spouse or your children. For example, if it was a family home or home improvements, it'll probably be that you are jointly responsible for the debt and this would be taken into account as part of any financial settlement if you were to become divorced or separated.

  • If it's in your sole name then it will be viewed that there is a joint debt. It can be that they will make an order to offset that during the court proceedings to give you money from the other side to balance it out.

  • Again, this falls into economic control and economic abuse. No matter how safe and secure your relationships are, don't share passwords. If they want the information, ask them to come to you and you can provide it for them. Always have something that is just solely in your name just in case.

financial infidelity and divorce

  • There is a spectrum with any infidelity and the definition of that will really vary between individuals. Having that secret pot of cash, it's your freedom fund in some senses might be seen as infidelity to your partner — so that's something that you need to navigate and really understand from your personal relationship.

  • Then, on the other side of the spectrum, you have some people who have separate families, secret families, or maybe they've got a gambling habit or the shopping habit or any of these taboo habits which would be seen to be infidelity definitely.

  • When you go to get divorced, we're talking about the marriage side here, you will be required to complete a form as part of the financial disclosure, which is giving full transparency on your debts, your liabilities, your assets, your income, any trusts — you have to disclose that both parties fill out the form and they share them.

  • When divorcing, it is often a cost benefit analysis that you would need to run because it will cost thousands. And again, it depends what the size of the asset basis. Even when you're going through the divorce process, hiring a legal team, the valuation of your assets, all of these additional costs will then ease into what the settlement might look like. It is really about taking a strong view on how much it will cost you to have that peace of mind. Some people will fight just for the sake of fighting. So they want to know the answer and they will sink themselves in fees to try and recover assets.

  • When you're going into divorce, the best thing that you can do financially is understand and organize yourself from the outset before you even speak to a lawyer because it can quickly spiral.

  • Red flags to look for: finding receipts somewhere or just thinking they're going out for dinner an awful lot or they're indulging themselves in expensive hobbies. There will be some signifiers to how they are behaving, but again, this is where it comes cut to that economic control because one party might say, well I'm entitled to do what I want with my money.

  • In general, the red flags would really be looking at their spending habits without directly looking on their phone.

  • One important thing is that courts do not like it (when you snoop) and it may even be illegal. Definitely don't photograph anything you find because that can be a big no-no when it actually comes to court. You would leave it to the forensic experts who will go through the bank statements once they have been issued to the courts and they will see where the gaps are.

I hope this summary was useful. It’s not about being worried about such events but understanding what they happen, what could have been done, and what is the impact on the markets, and the economy.


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