What to Consider Before Moving in with Your Partner
by NCA Financial … on Oct 16, 2018
You and your significant other are ready to take the next big step in your relationship: moving in together. While this is an exciting milestone, it's also one that should prompt you and your partner to have some serious conversations about the financial implications of the move. Here are a few questions to consider that might help you and your partner live together more peacefully.
Do you have a financial plan?
Communication is key in making a relationship work. You should feel comfortable talking to your partner about anything, including money. Living together means that you're both responsible for contributing to your household.
Have an honest discussion with your partner about your financial plan. Share your attitudes toward money, your spending and saving habits, and your financial priorities. From there, build a monthly budget that works for both of you. Add up your monthly incomes and expenses. Include discretionary expenses (e.g., entertainment, travel, hobbies) as well as fixed expenses (e.g., housing, food, utilities, transportation). Be sure to factor in any debts you may have, such as student loan payments or credit card balances. This exercise will help you decide how much you and your partner should each contribute to your monthly bills. Do you and your partner earn roughly the same amount of money? Then it might make sense to contribute equally to your household expenses. But if one of you brings home a significantly larger paycheck, then you may want to divide expenses with that in mind.
Don't forget to talk to each other about your short- and long-term financial goals. Moving in together is likely the first of many major financial steps you'll take over the course of your relationship. Vacations, major purchases, and potentially children and retirement could also be part of your financial future. Discussing your common financial goals can help you and your partner stay on the same page and work together to help accomplish them.
How will you divide responsibilities?
Besides figuring out how you'll split household expenses, you and your partner will need to decide how you'll divvy up responsibilities like shopping for groceries, preparing meals, cleaning the living space, paying the bills, and other household tasks. Making assumptions about what needs to be done, when (and how often), and who will be responsible could result in arguments and potentially dissatisfaction with your living arrangement. Plan now so you and your partner can find a routine that works for you both.
Should you document your agreement?
Most states permit cohabitation agreements (also known as living together agreements or no-nups) that allow unmarried couples to agree on financial obligations to each other. It might seem formal to put your arrangement in writing, but it clearly captures what you and your partner have agreed upon and can help protect your rights and finances. Include details such as how much each partner will pay for rent, who will cover household expenses (and what those expenses might be), when bills are due, and other space-sharing arrangements considered important enough to document.
Revisit your agreement whenever you or your partner experience a change in circumstances, such as going back to school or receiving a major promotion at work. If you and your partner are engaged or considering getting married, bear in mind that your financial situation will legally change when you marry.
What if the unexpected happens?
It's an unpleasant thought, but what would happen if you and your partner ended your relationship? You might be reluctant to discuss the possibility, but it's important to have a plan in place for both of your sakes. Decide up-front who will get what in the event of a breakup. Consider the following:
- Who will stay in the apartment/house? Who will move out?
- Who will keep items you bought together (e.g., furniture)?
- Who will become the owner of any pets you share together?
- How will you settle any final bills?
Coming up with a plan now can help you and your partner avoid emotional and financial heartache if your cohabitation doesn't work out.
These can be difficult conversations to have with your partner, but being honest with each other and setting clear expectations can create a happier home for both of you.