The Dos and Don’ts of Shacking Up
According to The New York Times, cohabitation in the United States has increased by more than 1,500% in the past half-century. 1,500%!!
In 1960, about 450,000 unmarried couples lived together. Now the number is more than 7.5 million. Whether you’ve been cohabiting with your sig-o for years or are just taking the leap now, it’s important to talk to your sig-o about money. It doesn’t have to be that serious or scary.
But before you start picking out curtains and rolling out the monogrammed welcome mat with your sig-o, here are a few things to keep in mind:
Don’t pay to furnish his place. I get the desire to get your domestic goddess on, but remember that this could potentially be a short-term investment. If his place is really a dump…dump him. Unless he has a good excuse for his slovenly behavior, like i-banking hours or a recent death in his family, chances are that if his place is a wreck…he is a wreck. Get out now. People who are financially responsible appreciate and take care of their things because they understand their value. His place doesn’t have to look like a spread out of Architectural Digest, but it’s fair to expect a certain level of cleanliness and upkeep, especially now that he’s no longer a bachelor. If you’ve already furnished the guy’s place and you think he has potential, at least make sure you have a key to his place and an agreement that if you go, the furniture goes, too.
Don’t cosign for loans for a boyfriend. EVER. Unless it’s money to tip the pizza delivery guy, because he doesn’t have cash on him…don’t even lend him money. Slippery slope, friends, slippery slope. Wait until you make it official and have legal claim to (and protection from) joint bank accounts to share your funds.
Don’t leave valuable items at his place. Like your jewelry, or your passport. In the event of a sudden breakup (hey, it happens!) you don’t want to be left harassing your ex for your valuables…or having to go over there and (awkwardly) retrieve them yourself. And should things end badly, as sometimes they do, you don’t want him profiting from your family heirloom watch. Just saying.
Do Have “The Talk”. Know your partner’s FICO score and the amount of his debts before you move in with him. This information will inform every financial decision you make together from here on out, from your rent payment to future housing loans to employment prospects (seriously, some employers check for this as an overall indicator of financial responsibility). You’ll be a lot happier with those walk-in closets if you remove the skeletons from them first. If you haven’t already discussed and split up who is paying for what, start there! Write down all of your combined household expenses (rent, utilities, groceries, pet costs, etc.) as well as how much you spend on each monthly. This is a good time to discuss how this will all be broken down (more on that in a minute). Spreadsheets or even a simple checklist are super helpful here.
Do have a written, signed cohabitation agreement— before living together. Decide how the bills (rent, utilities, etc) will be paid…50/50? Or in a ratio of earnings? If you earn $70,000 and he earns $100,000 perhaps he should pay a higher percentage of the bills? In this case you would pay 40% of the bills and he would pay about 60%. Remember, housing expenses should never exceed 35% of your monthly income, whether you’re living on one income or two. If you’re looking at a higher percentage, it’s time to cut back.
Do split it up and come together. Follow this useful household adage: “What’s mine is yours, what’s yours is yours, and what’s mine is mine.” In a word, you should have both types of accounts, joint and separate.
Here’s an easy sample breakdown of “yours and mine:”
“Yours” will include his own personal expenditures like his gym membership, sneaker collection, or trip to Vegas with the guys for the Fantasy Football Draft. Also personal debt, like credit card and student loans.
“Mine” will include your own personal expenditures, like your yoga classes, monthly mani/pedi, or tapas night with the ladies. Also personal debt, like credit card and student loans.
“Ours” will include all household expenditures, like rent, utilities, car maintenance, groceries, pet supplies, etc. Also shared debt, like a mortgage or a car loan.
Making sure to stick to what’s “yours and mine” will help the household run more smoothly as no one has to wonder why you’re $30 short for pet food that month. Make a plan to get together once a week to make sure your moolah is being spent wisely. This is also a great time to negotiate your internet or cable bill (assuming you have them.)
Things come up, and they will…that’s just part of the crazy world that is love (and money). I’ve said it before and I’ll say it again: money is THE numero uno for relationship strife. But if you’re being proactive vs. reactive by remembering to have “The Talk” and checking in on your household finances frequently, it’s pretty simple to get things running smoothly. So get organized—and get a happier home!Things come up, and they will…that’s just part of the crazy world that is love (and money). Click To Tweet