Money & Moving In Together

By Brandi Savitt – Revised January 30, 2014

The Finances of Love

A couple of years ago, our friend Liz was on a business trip across country when she randomly ran into her long lost college sweetheart, Jared.  Both single – and both smitten – the two embarked on a long distance love affair on the fast track to eternal bliss.  A year later, Liz took the plunge, quit her job, moved to Boulder and into Jared’s house. Could their story be more romantic?  All of us were just waiting for our wedding invitations to arrive.   But soon after Liz moved in, their movie-made romance turned ugly. The culprit? Money!

Taking the Co-Habitation Plunge

Are you madly in love and ready to move in together?  Living together is exciting, but it’s also a HUGE step.  So before diving head first into playing house, you and your partner MUST sit down and have a serious talk about money, expenses and the future of your finances.

Do You Have the Same Financial Plan?

Even if you’re married, talking about money with your partner is not easy.  But just because you’re not married doesn’t mean you should avoid the topic altogether.  Sharing expenses with ANYONE, let alone with someone you are establishing a home and a life with, warrants a good sit down. In fact, it should be a REQUIREMENT!

How are the bills going to be split?  Who pays when you go out at night?  Are you getting a place together, or is one of you moving into the other person’s home?  What happens if one of you makes more money?  The list continues…  However, the point is: if you want to grow together as a couple, you must be able to communicate and be open to each other’s expectations on all fronts.

Keep Your Finances Separate

When I asked Liz if she thought it was a good idea for couples to open a joint bank account right away, she said: ‘No way!”  Because she and Jared really believed that they were going to get married in the very near future, they agreed to split the big costs, but they were very loose about the rest – which got them into trouble.  And to this day, there is enormous resentment over who owes who what.

Liz feels that by keeping your expenses and your money separate, not only will you feel more in control of your own financial future, but it makes money very clear until you are ready to take that next step toward a bigger commitment.

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4 Responses to “Money & Moving In Together”

  1. Jackie says:

    Good advice about home ownership and making sure your name is on the deed. Most rights come with responsibilities. If you forgo the responsibilities, chances are you are giving up your rights along the way.

  2. Molly says:

    Making sure your name is on the deed is very important and so is being in someone’s will. I knew of a couple who didn’t make sure of these things because they were engaged, however he owned the house since before they moved in together. They were living together for about 3 years. Their wedding date was set for the next year. He suddenly died of a heart attack, and along with the grief she suffered, she had to move out of “her” house and got no money because he never got around to changing his will. He had been divorced and his estate, which included the house, was to be split between the three kids.

    She ended up having to move. His children allowed her to take a lot of the furniture and kitchen items, but they didn’t have to as legally they were part of his estate.

    As for household expenses, I think the fairest thing to do is to open a joint account and agree on how much each person is putting in. Then each have a separate account. Use the joint account to pay for everything that is combined – rent, vacations, dinners out, etc.
    I think the fair thing is for each to put in a equal percentage of their income.

  3. louie says:

    Molly has it right. Living together doesn’t mean marriage and the legal ramifications that go along with that. All accounts, properties and Wills should be not only separate, but operational as though you were single entities. Anything else would simply be foolish. If for some reason a home was purchased using both entities funds, a partnership agreement needs to be legally put in place declaring each of the parties equity in said partnership and stated in their individual wills as such too, giving rights to buy out each others portion of said partnership by the designated executor of each of their wills.

  4. Pearl says:

    If incomes are not close to being equal, then each partner should pay proportionately into a household account. Use the account to pay all shared expenses. Excess income can be used to buy personal items and to treat one another.

Any Thoughts?