If you’re in a committed relationship, deciding to move in together can be a very exciting time. But aside from the joy of taking a big step in your relationship, living together can also bring new challenges, many of them financial.
According to a 2015 study by SunTrust Bank, 35 percent of respondents (single and in a relationship) identified money as the leading cause of stress in their relationship with a significant other. Help protect your relationship from unnecessary financial stress by discussing these four money questions before moving day.
What’s our big picture on finances?
Before packing any boxes or signing a lease, you should have an honest discussion about money. Will you share financial accounts or keep separate accounts? What are your spending and saving habits, what kind of debt do you each have and what are your financial goals? Get it all out on the table and determine whether you’re on the same page, where you have differences, and what actions you each need to take to be more aligned. Your partner’s financial decisions will have an effect on you if it alters his ability to pay his share of the bills. Communicating about your finances – early and often – will help you avoid confusion and conflict.
How will we budget?
Even if “budget” isn’t currently in your vocabulary, you may find that moving in together is a great time to add some financial structure to your life. Creating a budget can also be a good place for you and your partner to get aligned on money, and help you set clear expectations for saving, spending, and investing. Thankfully, with some technological help, budgeting doesn’t have to be cumbersome. Mobile apps like Mint, PocketGuard, or You Need a Budget can help simplify budgeting and allow both partners 24/7 access to bills and other linked accounts.
How will we split the bills?
Moving in together usually means shared groceries, utilities, rent, and more. While some couples choose to split costs evenly, others elect one person to take a larger share due to higher income or having less debt. Prior to moving in, having a conversation about who will be responsible for what bills can help eliminate frustration and resentment.
What happens if one of us gets sick, hurt, or dies?
If your partner is unable to continue working due to illness or injury, could you pay the bills? Having adequate disability income insurance can help ensure that your income and lifestyle are protected if you or your significant other became sick or hurt and were unable to work. Unfortunately, injuries happen more often than you might think. According to recent research from the Social Security Administration, one of four workers will be disabled for three or more months at some point during his or her career.
If you purchase a house or have children, you should create an estate plan to ensure that your loved ones are protected and your wishes are honored if one of you dies.
Sharing a home can be an exciting and stressful time for a couple, but asking these questions before moving in together will set the stage for ongoing financial dialogue. Meeting with a trusted financial professional can help to get your financial relationship on the right track.
Article prepared by Northwestern Mutual with the cooperation of Joshua S. Curtis, a financial representative with Northwestern Mutual, the marketing name for The Northwestern Mutual Life Insurance Company (NM), Milwaukee, Wisconsin, and its subsidiaries.