Maybe you’re planning on getting married, or perhaps after much consideration you’ve decided to move in with your long-term partner. By choosing either one of these paths you are embarking on an important journey and a major life transition that will surely impact you in ways you may or may not have yet considered. As you may have realized, moving in with your partner will require both of you to take a good, hard look at your financial picture – both individually and jointly. In order to get off to a solid beginning with your new spouse or significant other, make these 5 smart money moves. Doing so will ensure that your road to domestic partnership is a smoother and more blissful experience for both of you.
- Put everything out on the table. Make sure your new ‘roommate’ knows your financial situation, and that you know theirs. Although we tend to want to keep certain details of our financial histories private, knowing about one another’s debt, credit and spending habits in advance could save you both some unpleasant surprises down the road. Have a candid conversation together, and agree to spare the judgment over anyone’s past financial mishaps. This is your chance to turn over a new leaf together.
- Design a plan for paying your bills now that you’ll be sharing things like rent, utilities and food. You can consider dividing expenses equally, or splitting them proportionate to each person’s income. SplitWise is a free app that helps you track who-owes-what. Either way, make sure it’s a division that both of you are comfortable with.
- Have a discussion about joint goals. Different people value different things, and you both have the right to spend your money on the things that make you feel happy, comfortable, and satisfied. Ensure that you and your partner have set joint financial goals that you are willing to work toward together, and that you can hold one another accountable to. Goals could include a down payment for a house, a vacation fund, or retirement planning. SmartAboutMoney.org offers a Life Values quiz for spouses & partners—it will help you determine whether you are a good financial fit. Take it here.
- Explore the benefits that your employer extends to spouses or domestic partners. In addition to tax benefits that will kick in following your change to newlywed status, some employers offer benefits just for being married – health insurance is one example. Additionally, consider whether you’d like to name your partner as a beneficiary on any life insurance policies that you might hold (if you’re not married).
- Reevaluate your joint spending plans, progress toward goals, and financial picture regularly, just as you would if you were on your own. Mint.com is a tool that allows you to see exactly where your funds are being allocated each month, and will help keep you in check as you maintain a monthly budget and work toward your goals. Agree to keep each other up to date on any changes that may impact your life together.
Smart About Money. Living together: 10 tips for combining finances. Available at http://www.smartaboutmoney.org/Your-Money/Life-Transitions/Living-Together.aspx