Getting it all together
Moving in together is an important step, so manage the money side well
AROUND 80 per cent of Australian couples will live together before they get married.
Back in our courting days the quaintly termed “living in sin” had a stigma about it. Not today, where it’s seen as the sensible thing to do – a sort of test drive strategy.
Yes, it’s practical, but it also comes with financial consequences. As a general rule, if a couple lives together for longer than two years then they have a claim over the assets of the relationship, as if they were married.
You are co-mingling your money, which means you need to prepare for what happens if you don’t end up buying after you’ve tried.
Even if it doesn’t work out romantically, house sharing still involves working out financial practicalities.
PROTECT THE ASSETS YOU BRING WITH YOU
The key here is good record keeping. List all the assets you bring, get them valued at the time the relationship starts as a base level. Clearly valuing any assets from inheritances and windfalls is important.
ADD YOUR NAME TO
THE LEASE
In the unfortunate event that you break up with your partner and one of you has to move out, the person whose name is on the lease is in the best position to maintain possession of the space. If both names are on the lease, both people have a more equal opportunity to remain in the home and renew the lease.
CREATE A PERSONAL BUDGET Before you agree to rent a new apartment or pay a removalist, stop and create a budget for your new monthly bills that includes rent, utilities, and anything else you may now be paying for as a couple. Don’t forget to include your moving expenses, security deposit, new furniture, etc.
Make sure it stays within your budget and you can cope financially.
PURCHASE ITEMS INDIVIDUALLY
That way, in the unfortunate event of a break-up, the person who paid for the TV or bed is entitled to it, and the person who bought the sofa can take it or swap it with their partner for something else.
If you want to contribute equally, then build the shopping list, value them and then each pay for individual items up to the agreed amount.
KEEP GOOD RECORDS
Keep receipts, bank statements, credit card statements, or a journal of shared expenses and purchases to make it easier to divide things up later.
If things go pear-shaped it’s good to have the records to sort out any claims of one contributing more than the other.
BE CAREFUL OF JOINT DEBT Whether it be credit cards or home loans, if they are jointly held then you are liable for your partner’s responsibilities as well as your own. If they skip out without paying, you could be liable to pay their debts.
MAKE TIME FOR REGULAR TALKS
The majority of money problems can be traced back to a lack of communication between partners about their finances. That’s why in a serious relationship it’s a good idea to regularly set aside time to talk about money together. Even 15 minutes a month can make a world of difference.
We don’t mean paying bills and checking credit card statements but talking about big financial issues … goals and dreams, setting a plan and monitoring how you’re tracking.
WORK AS A TEAM
Couples who manage their money successfully know that you have to work as a team to avoid potential problems. A good option is to set savings goals that you both have to contribute to, and build a budget together to ensure that you’re spending consistently.
We’ve said it before, and we’ll say it again, couples who save together, stay together.
DON’T KEEP SECRETS
Our feeling is that if you’re together in love, you’re together in money, so we’ve always made a point of being open about finances in our relationship.
If you don’t trust your partner enough to be transparent, at some stage you have to question what you’re doing with them in the first place.
Let them know about hidden bank accounts or inheritances, and be candid about any debts lurking in your closet.
And don’t fall into the trap of having one partner controlling all the finances. If your partner uses the old “don’t you trust me?” line, respond with “don’t you care for me because what will happen if you suddenly get hit by a bus.”
If they still want to control the finances by themselves … get rid of them.
OPEN A JOINT ACCOUNT
Joint accounts are a handy way of fairly dividing household bills and also a great way to reinforce trust in a relationship.
If you do go down this path, it’s important to set some ground rules about what the joint account will be used for.
Even if you earn more than your partner, it doesn’t give you the right to have a different spending pattern … it’s a partnership of equals emotionally and financially.
GET SMART ABOUT COUPLES FINANCE
Once you’ve got the basics right, there are plenty of more advanced ways you can take advantage of being in a healthy financial relationship.
For example, saving by taking out insurance as a couple, looking into consolidating reward and credit card benefits to get results more quickly, and salary sacrificing if one partner isn’t working or earns significantly less.