Living with your partner, either to test out the waters before marriage or as a more permanent arrangement, is now more common than ever. Nearly half of young women have cohabited outside of marriage, according to a report by the National Center for Health Statistics.
However, in the excitement of moving in together, many couples can get swept up in the fun and forget they are making an important financial step. Not only are you comingling finances for the first time, you must also prepare for the chance that things don't work out.
We asked life coach Dr. Michele Callahan, who has been featured on The Oprah Winfrey Show, Dr. Oz, and other media, how couples can protect their finances when they make this critical next step. She offered the following four tips:
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 apartment and renew the lease.
Create a personal budget. Before you agree to rent a new apartment or pay a mover, stop and create a budget for your new monthly bills that includes rent, utilities, and anything else that you may now be paying for on your own. Don’t forget to include your moving expenses, such as moving supplies, security deposit, new furniture, etc.
Purchase items individually.That way, in the unfortunate event of a breakup, 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.
Keep good financial 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.