How finances affect cohabiting couples
When you’re in the first flush of love, you want to spend every moment together, and as your relationship deepens, that often means moving in together. But before you start packing up your things, stop to consider how living together will affect your finances. If you haven’t had the money talk yet, the time to do so is now – it’s a conversation best had before the rent’s due, or the utility bills arrive.
Know How Your Partner Handles Finances
Is he a saver? Is she more interested in travelling with friends than in making sure the bills are paid? If you have no idea how your honey handles his or her money, then it’s too soon to even think of moving in together – you simply haven’t known each other long enough. On the other hand, if you know from experience that your partner often struggles to pay the credit card bill, or runs out of cash long before the next paycheck, think twice before moving in together unless you can easily afford the bills on your own. But even if you can afford to foot the bill for you and your sweetie, do you really want to? Consider how that will affect your relationship.
Can You Afford a Place Together?
If one or both of you are still living with your parents, or you have more than one roommate, then it’s best to determine whether you can afford rent, utilities, and other costs such as transport to and from work before you start looking a place together. Sit down together, compare home insurance policies to cover your new household, and carefully consider every expense you can think of. Figure out how much money each of you has available to cover such costs, then determine what you can afford.
How Will You Manage Bills?
Decide who’s going to be responsible for paying what before you move in together. What is the best way to split the bills? An even 50% split, or is that unfair if one of you earns more than the other? If one of you works from home, paying a bit more on the rent, or paying the entire phone or Internet bill may seem fairer. You should also determine who will be responsible for the bill payment process itself. Will one of you handle the payments, or will you split those, as well?
Whose Names Will Be On Documents?
It may seem like a trifling thing, but deciding whose name will be on the lease and utility bills is important. There’s always the option for putting both your names on the lease, utilities and insurance, but if that is not the way you decide to arrange things, then the person who signs his or her name to the dotted line is the person whose credit is at stake should your romance go sour, or should one of you be unable to pay the bills. If your sweetheart’s credit leaves a lot to be desired, and your name has to be on the lease and the utilities, consider why he or she has poor credit before you take on this responsibility – it’s your credit alone that will suffer if your partner can’t hold up his or her end of the financial bargain.
Will You Combine Your Finances?
If being in love means sharing everything, up to and including checking accounts and credit cards, move slowly and keep an eye out for any potential problems. Combining your finances before your relationship is established is something that will be difficult to undo if you later regret it. Putting both your names on checking and credit accounts leaves you open to being wiped out financially, and with little in the way of recourse, if things don’t go as planned.
If there’s one time when you shouldn’t let your heart rule your head, it’s when you’re considering moving in with your significant other. Seriously consider the financial impact before you jump into living together.
This article is by JE Cornett, a freelance blogger who loves to share useful tips on how to compare home insurance along with other ways to save money.