How to Prepare Financially Before You Move in with Someone

Moving in together with someone you love is a super exciting thing and a major life change!  While it is an exciting life event, you should still protect yourself in preparation for the worst.  You shouldn’t expect it, but you should protect yourself.  I found an article entitled, “8 Tips for Protecting Your Finances Before You Move in with Someone,” really interesting and applicable to my life.

Did you know that a recent study by Rent.com of 1,000 renters found that 38 percent of renters had ended a personal relationship with someone they were living with at some point in their lives?  The majority of those – more than 60 percent – kept living together for a month or more after breaking up so they could work out the splitting of their belongings and finding new places that would meet the single budget needs.

Respondents who took the survey said the most difficult part of moving out was splitting up possessions (not the finances) and the number one precaution was to save money before moving in with someone else.

Life Coach, Dr. Michele Callahan, who has been featured on “Oprah” and “Dr. Oz,” as well as in other media, shares her most important advice for couples that live together:

1 – Add your name to the lease.  Nobody plans on breaking up, but if it happens, you want to protect yourself.  In the event that it happens, the person whose name is on the lease is in the best position to maintain possession of the space.  However, if both people’s names are on the lease, then you each will have a close to equal chance of remaining in the apartment and renewing the lease. If you are currently browsing for tiny houses or rental properties like 2 bedroom luxury apartment units or two bedroom apartments, you should discuss putting both of your names on the lease once you find the right unit.

2 – Create a personal budget.  Before you agree to rent a new apartment or pay a mover, you should stop and create a budget for your new monthly bills.  This amount should include rent, utilities, and anything else you may now be paying for on your own.  Don’t forget to include items such as moving expenses (i.e. moving supplies, security deposit, new furniture, etc.).

3 – Purchase items individually.  Purchasing items can be beneficial because if you do end up breaking up, it will be easier to do property division.  For example, the person who paid for the TV or bed will be entitled to it and the person who bought the couch can either take it or swap it with the ex-partner for something else.

4 – Keep good financial records.  Be sure to keep receipts, bank statements, credit card statements or a journal of shared expenses and purchases.  This will make it easier to divide things up later.

In the unfortunate event that you do end your relationship:

1 – Determine who can afford to move.  After sharing the rent and household expenses, it can be challenging to save enough money so you can find an apartment you can afford on your own. Not to mention the moving expenses and new security deposit you’ll have to cover.

2 – Close joint bank accounts.  If you and your partner have joint accounts, now is the time to fairly divide the balance of those accounts and then close them.  If there are any automatic payments coming out of those accounts or any direct deposits going in, be sure to cancel those before closing the account.

3 – Refinance joint debt.  If you have joint credit cards or have been sharing an individual card, be sure to talk with your partner about figuring out who’s responsible for which charges so that you can either payoff the balance or arrange your share of the outstanding debt to be transferred to your individual accounts.

4 – Sell the items you can’t divide.  If you can’t divide the items, consider buying out the other person’s share of the item or make an exchange of items that’s reasonable to even things out.  If you can’t agree on how to do this, then sell the item and split the proceeds.  This may be necessary for a bigger ticket item like a car if neither of you can afford the cost on your own.