WAGs, BAGs And Sharing Your Salary

As the credit crunch bites, it seems more people are hoping to hook up with a loaded lover. So how smart -- or risky -- is it for partners to mingle their money?

As countless biographies, novels and old Hollywood movies attest, people throughout history have sought to raise their social and financial status by ensnaring someone rich.

As Marilyn Monroe once coquettishly sang: a kiss on the hand may be quite continental, but diamonds are a girl's best friend. And didn't Austen's Elizabeth Bennet end up considerably better off for marrying that handsome Darcy chap?

In recent times, however, we've all become much touchier about the idea of someone liking us more for the contents of our bank accounts than our brains.

So, imagine my horror when I learnt of a new breed of desperate dater -- one determined to lead a lavish lifestyle in these turbulent economic times, all at some else's expense!

The Perfect Prey

Traditional tales would have it that we girls are usually the gold-diggers. The behaviour of certain WAGs (Wives And Girlfriends of professional footballers) seems to suggest that some women still view romantic relationships as financial opportunities.

But this is the twenty-first century -- and, according to a recent survey by Scottish Widows, only one in ten modern women would actually consider marrying for money.

While some male Fool readers are no doubt horrified at this news, others (you know who you are) should perhaps be hanging their heads in shame.

Nearly twice as many men -- 19% of those surveyed -- admitted they might wed themselves to a woman simply because she was rich!

Dubbed the BAGs (Boyfriends And Gold-diggers), they'll stop at nothing to catch a wealthy woman who's able to keep them in the style to which they aspire.

Emotional (And Financial) BAG-gage

Of course, all joking -- and silly acronyms -- aside, tales like these should remind us of the consequences couples face when they link themselves financially.

Aside from the obvious risk that an unscrupulous partner will fleece you for expensive dinners, holidays and gifts, there are other issues that can befall people whose emotional unions become economic ones.

What Are The Risks?

First and foremost, it's vital to be aware that `associating' yourself financially with someone else is likely to affect your credit rating.

While simply living in the same house as a partner doesn't mean you're financially associated with them, opening a joint account, taking out a joint loan or co-signing on a mortgage or tenancy agreement will.

This is unlikely to be a problem for couples who have similar credit ratings and financial habits -- but it's bad news for those where one person's financial record is stronger than the other's.

The effect of association on credit ratings is more likely to be negative than positive, so a partner with a good credit history has more chance of finding him or herself `damaged' by association than their other half has of benefiting from a credit-rating boost.

It's also important to remember that it's possible for individuals to end up `responsible' for the state of a joint bank account or mortgage (unless you and your partner are 'tenants in common' of your home).

For example, an overdraft run up by your partner on a joint account is your responsibility as well as theirs -- and, if they refuse to pay, the bank can request that you do so.

Furthermore, the signatures of both partners are required for the closure of a joint bank account. This could mean that things become very messy in the event of a bad break-up.

In addition, sharing the cost of things such as household bills and furniture might seem like a nice idea -- but it can turn nasty when a relationship founders.

It may be very difficult for you to claim back what is rightfully yours, should your relationship end -- especially if you're unmarried.

How Can I Protect Myself?

Before linking yourself financially to a lover, I'd recommend that both partners get hold of a free copy of their credit report. That way, you know just what to expect from mixing up your money.

Knowing your rights is also vital -- especially if you're planning to move in together.

More and more people in Britain are choosing to cohabit rather than get married, but they don't always realise that doing so means they aren't assured the same legal rights or protection as couples who tie the knot.

This article is a good place to start learning about your rights as a cohabiter. These government-backed web pages also contain information about living together and the differences in legal status between married and non-married couples, which may prove useful.

Living together agreements and pre-nuptial agreements are often seen as the most effective ways to set out the details of a couple's financial relationship. While neither is necessarily binding in UK law, courts will often take them into account -- and it also looks likely that their legal status will change over the next few years.

Finally, it's vital to get to know your partner inside and out, before you decide to take the plunge. It sounds old-fashioned, but it really is the best way to make sure your bank balance doesn't end up battered by a BAG or WAG!

The Benefits Of Financial Bonding

Remember, it's not all doom and gloom. Sharing your life -- and even your salary -- with a partner can have positive effects, both emotionally and financially.

By pooling your finances, you may find you fork out less for household bills and can afford to live in a far nicer home.

When you have the right partner -- and the right financial protection -- the fun of being together should outweigh the risks.

More: Money Talk Podcast: When Lovers Link Their Finances | How To Move In With A Partner | How To Move In With A Partner: Part Two