What You Should Know About Finances

‘Tis the season for young couples taking the plunge and either moving in together or getting engaged. It’s an exciting time for couples as well as their friends & families. People look for the perfect home to share and begin the merging (and purging) of possessions. But there’s an aspect of moving in together that people tend to avoid at all costs – money. Before embarking on this exciting new time in their lives, couples should make sure to discuss how they would like to manage household finances. Discussing a few things up front could help avoid relationship issues down the road. Here are a few points to think about:

1. Schedule a time to talk about finances – Make a date to initially discuss both of your general feelings toward your finances. Talk about how you want to budget, pay for bills and save for the future. Then, schedule a weekly or bi-weekly meeting to go over your budget together so you both remain on the same page as your lives progress.

2. Think carefully about housing – If you’re planning on renting, both partners should have their names on the lease. This will help protect both parties legally in case anything goes sour. If you’re making a long-term commitment to each other and are thinking about getting a home loan, the same rules apply. Make sure you both are legally protected if you decide to make this purchase together. If one person is more financially secure than the other, they can purchase the home and collect rent from their partner. It may not be the most romantic option, but in the end it could save a lot of headaches. If you both already own separate properties and are consolidating to one home it might be a good idea to rent out the newly vacant home rather than putting it up for sale right away. The newly generated rent income may reduce any unique financial burdens you may uncover by living together.

3. Document everything – Another important, unromantic aspect of protecting yourself while living with another person is making sure there is adequate documentation of every major purchase made. This is especially important for unmarried couples who do not have the same legal protections as married couples. Keep receipts for big ticket items and if the payment was shared, include the exact amounts that each person paid. This small step won’t take much time to complete and then file away the receipt. Hopefully, you’ll continue on in coexistent bliss and will never have to look at that receipt again.

Money can be a touchy subject, but people in a relationship will often have to address difficult subjects. A topic like finances should not be overlooked. Make sure you talk with your significant other about your financial future before moving in together – and definitely before buying a house together!