My sister and her boyfriend of five years are moving in together for the first time. Following his acceptance of a job offer in Boston and her acceptance to graduate school, they decided moving out of their respective parents’ homes was the right step. While they have talked about moving out for a long time, my sister confided that they haven’t made a “money” plan yet. Stop right there!
8 essential steps BEFORE you move in together
1. Decide How to Split Living Expenses - The first key to moving in together without going broke is having a plan for paying bills. If you’re both making the same amount, splitting the bills 50/50 is probably an easy solution BUT if one of you makes significantly more money, it becomes trickier. Maybe choosing to divide major expenses 70/30 (rent, utilities) while splitting every day bills, such as groceries, 50/50 is what will works best. Perhaps you’ll each take on specific bills or split them according to income.
Discussing this with your significant other, and making sure you’re on the same page, is key to avoiding fights. Deciding what you both think is fair before you move in will reduce the stress of living together, which can already be an adjustment.
2. Make a Supply List - Moving in together is exciting and it’s easy to forget how much money (and how many things) you will really need. This is especially true for my sister and her boyfriend who are both moving out of their parent’s homes. Don’t wait until the last minute to start thinking about what you’ll need. Instead, make a list of must-have items and create a plan to pay for them. Do you need a couch? Dishes? Cleaning supplies? How much can you afford to put towards each item? What can you buy used or do without? Finding concenus will help you create a budget and will prevent you from running out of money before you have the essentials you need.
3.Keep Credit Separate – When you move in together you may feel like you’re sharing everything, but you shouldn’t be sharing credit. Making credit mistakes can create huge problems for the future, so avoiding exposure to your partner’s mistakes is key. Build a healthy credit history solo by having bills in your own name – and pay on time!
4. Discuss “Fun” Spending - My sister is a shopping addict (the girl loves shoes!) but her boyfriend is very frugal. For this reason, discussing a budget for fun activities such as movies, going out to dinner, or weekends away is a great way to make sure they’re on the same page. Creating this budget will help to keep them both on track and prevent overspending during the week. It can also reveal deeply seated emotional beliefs about money. A great hurdle for couples that will strengthen the relationship – if they can compromise.
5. Talk About Debt - While it may be uncomfortable to talk about loans and debt, it’s important that your partner is aware of what they are getting into. No one wants to find out about $50,000 in debt after moving in! By being open about your debt, your significant other will be able to support you as you pay it off and will be less likely to pressure you into buying items you can’t afford.
6. Plan for the Worst - No one wants to think about breaking up when you’re starting a life together, but it never hurts to think ahead. Suggest written agreements for items bought together. If living together doesn’t work out will you split the cost of items or divvy them up? Who will get the apartment? Could you afford rent alone? Pets? While you’re in love now (and hopefully will stay that way!) planning for a breakup could save you a future headache. A breakup is bad enough without adding in these complications.
7. Set Goals Together – Do you want to go on a big trip? Are you saving to retire early or buy a house? Decide on what it is you want to do and set goals to get there. Setting these goals together and working towards them will make your relationship stronger. It will also make saving money less of a burden and more of an investment in your future.
8. Talk About Money Frequently - While having a pre-move in money talk is great, the line of communication shouldn’t stop there. Be open with each other about bill paying, financial concerns and successes. Set a time each month to sit down and talk about goals and how you’re doing. Being open about purchases, problems saving, or concerns about overspending will prevent fighting and major mistakes in the future.