Pronup or Prenup: What’s the Difference?

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Pronup or Prenup: What’s the Difference?

prenup-or-pronup-whats-the-difference

Whether we like it or not, money can make or break a relationship. So it’s important for couples to be on the front foot when it comes to getting their finances in the best of shape. A Pronup is a detailed financial plan for a better future together and here’s why you can benefit from getting together with a Financial Planner to work on yours.

According to Relationships Australia, money is the number one cause of divorce in Australia. Ignore it at your peril, as two out of three couples who avoid talking about money end up arguing about it instead. And lying about it will have a negative impact on 3 out of 4 couples. Sweep money issues under the carpet now and chances are your relationship will pay the price later.

What is a Pronup?

A Pronup is a professional financial plan for building a better future together. It’s a whole planning journey, focused on keeping you united in your approach to life as a couple and the goals you have, for your lifestyle and finances.

How does it differ from a prenup?

A prenup is generally a legally binding agreement about what will happen to assets you bring to a relationship if things don’t work out between you. A Pronup, on the other hand, has a completely different purpose. It’s focused on planning for a future together, based on shared goals and how you’ll work on them from a financial perspective.

Who needs a pronup?

A Pronup is a great way for couples in long term relationships to get money out in the open. It’s also ideal for laying down the ground rules between you and your partner about spending, saving and more. So it’s definitely a good idea to have the Pronup conversation with a Financial Planner before you tie the knot. But even if you haven’t got that far in your relationship, or marriage isn’t for you, a Pronup can prepare you both for the next step, whether that’s moving in together, buying a home or having kids.

What to expect from a pronup

The Pronup process begins by examining the state of your joint finances. Working with a Financial Planner, you’ll explore everything about how to make money work for the both of you, on a personal and practical level. This includes a close-up look at your current finances and then developing a strategy to guide you towards financial wellbeing. There might be a focus on paying for your children’s education, managing cash flow, looking forward to a comfortable retirement, insurance, or maybe all of the above.

It starts with a conversation about:

  • What money is to each of you
  • How you can join up your finances in a way that makes sense.
  • What you have and what you owe
  • What’s working and what isn’t with how you save and spend
  • What money could help you do, together and as individuals
  • Getting your finances organised

After all that soul searching and number crunching, you can breathe a sigh of relief as you get back to the business of living. In the meantime, the serious work is just getting started for your Financial Planner. They’ll be sifting through everything you’ve shared to come up with recommended steps for bringing you financial harmony and wellbeing through developing financial goals, for now and the future.

Being mindful of your personal money styles, they’ll explore how your individual finances can be blended to come up with the best arrangements for your budget, bank accounts, savings super and insurance. Then they’ll put all of this in writing – a Statement of Advice (SOA) – to discuss with you.

Checking in as life takes over

As you get further down the path of commitment as a couple, life is only going to get more complicated. A key aspect of a Pronup is having a Financial Planner checking in with you and keeping track of your progress towards goals. You can get on with the exciting stuff while the money side of things is all taken care of. And as things change, your next conversation with your planner is the perfect opportunity to hit refresh on that list of goals.


By putting your heads together on your finances, you could bring benefits to your whole relationship and give both of you a chance to be clear about where you stand. Talking about your current money situation and future goals with a Financial Planner can be a great way to get you both on the same page and working together towards a better financial future.

Source: FPA Money & Life, 18 April 2019

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