You have been dating for a while, and you just know that you and your partner are right for each other. You are not ready to get married, but you want to live together. Many couples today are moving in together, sharing finances and testing their relationship before making a legal commitment. As you merge your possessions under one roof, you should have a plan in place for sharing finances.
Who is better handling money?
Before you move one piece of furniture, discuss money. Figure out whether you'll keep separate or joint checking accounts and exactly who is going to pay for what. It is quite possible that your partner is willing to let you pay the bills if that's your forte. Whoever has the best track record paying bills on time and keeping organized records should assume this responsibility.
Some men are great handling their finances. But if your partner knows that he has a spending habit, he might be happy to have you set up a budget. If either of you tends to indulge in purchases, now is the time to be honest about your spending habits. If, on the other hand, he insists on handling his own money, do exercise caution and keep your money in a separate account.
Another reason to keep a separate account for yourself: if you have lived alone for awhile and aren't accustomed to accounting for how much you spend on non-necessities. After you contribute your fair share to joint living expenses and honor a certain amount of agreed-upon savings toward a wedding, home purchase or vacations, you should be able to indulge yourself occasionally without feeling accountable.
Compromise with a financial arrangement
One thing to avoid when moving in together is fighting over whether to have joint or separate accounts. A good compromise is to meet each other halfway. Keep 50 percent of your salaries in a joint account, and you each can keep 50 percent of your own salary in a personal account.
Another good idea is for each of you to have your own savings account. While you always want to think positively about your relationship, you never know what can happen in the future. When you know that you have money in a savings account, you'll gain a sense of security and independence.
Other than making arrangements for bank deposits, talk about expenses. Sharing a home means joint responsibility for various bills. Who is going to pay for what? Private accounts, such as a credit cards and cell phones, should be paid by the individual, but other expenses such as utilities and cable should be paid equally.
If you live in a condo, split the maintenance fees in half. If you live in a house, keep a ledger of what needs to be paid and who contributed what.
Keep your personal identification number private
Even though couples shouldn't keep secrets from each other, do keep your personal identification numbers (PINs) to yourself until you know that you can trust your partner completely. While love is blind, it shouldn't be reckless or foolish. Banks recommend that you keep your PIN secret for a good reason.
The idea of moving in together is a decision made by your hearts. The reality of shared finances should be a decision made by your good judgment.
Living together is not like being married. No matter how much you love each other now, you don't know what's going to happen next month or even tomorrow. After moving in together, sharing finances and seeing each other's bad habits, you might have a major fight resulting in one of you walking out. If you have any shared accounts, your partner could be at the bank cleaning them out. Since both of you had legal access to your shared accounts, involving the law isn't going to help.