Love and mone y
Before moving in together have a talk about finances
COUPLES oft en o verlook the importance of understanding each others’ financial habits when moving in together, said Eunice Sibiya, head of FNB Consumer E ducation.
One of the biggest benefits of living with someone is being able t o split the bills and purchase more expensive items. But there are some financial t opics that need t o be discussed t o a void pr oblems. 1. Mo ving int o y our par tner’s house If you have equal r esponsibilities in terms of rent and the c ontract, it is fairly simple t o decide ho w to split the r ental r esponsibilities.
It is mor e c omplicated if one of you o wns the house.
Discuss whether the other will be paying rent in order to live there or not.
Talk about how insurance, municipality bills, upkeep, renovations and other p ayments will be p aid f or.
Both of you need to be comfortable with the understanding that you come t o, p articularly bef ore y ou make an y big in vestments int o the house. 2. Mone y in — money out Your partner is unlikely to drastically change his or her spending and saving habits and you have to be c omfortable with their monthly expenses and p ayments.
Have an open and transparent discussion about what each person’s financial position is.
Take disposable inc ome (the amount of money you have after tax), minimum monthly repayments, debit or ders and c ontributions t o sa vings, int o ac count.
Also discuss wants versus necessities and items that you are not willing to c ompromise on. You can open a household ac count and deposit funds into it at the beginning of each month or lis t the e xpenses and allocat e it bet ween the two p arties.
It is easier f or each p arty to take responsibility for certain shared bills than t o split each bill each time.
If you open an account, remember to set spending rules such as exactly what pur chases ar e allo wed.
Do the same with a sa vings ac count. Each party deposits a monthly amount which can be withdr awn in the e vent of emer gencies. 4. Debt: what’ s y ours is y ours and not our s Each party should manage their own debt.
Complications arise w hen it ems are bought t ogether, p articularly larger it ems that c ould not be pur chased with cash and that ar e purchased on s tore ac counts.
“If you shop together, make a re payment agr eement on the spot, ” suggests Sibi ya. 5. Be pr oactive about split ting up It is har d t o imagine br eaking up when you are in love but you will have to discus s this.
Decide upfront who will move out, to whom the items that you bought together will belong , w ho will become owners of any pets and how final bills will be set tled.
— Business Editor.
There ar e s everal financial e ffects t o mo ving in t ogether. 3. What about monthl y household bil ls?