Protect your finances before cohabiting
Couples who are preparing to move in together for the first time should enjoy this exciting new development in their lives; however, they should also prepare themselves in the event that the relationship ultimately does not work out.
A study recently conducted by Rent.com discovered that 38% of people who rent a place had at one point ended a romantic relationship and that the majority – around 60% – had continued living with their ex-partner for over a month following the break-up as they attempted to separate their belongings and look for new places to move to that would suit their now individual budgets.
Respondents to the survey said the toughest part of this relocation was not splitting up finances but possessions, and that the number one lesson they had learned from the experience was to make sure that they had more money saved prior to their next cohabitation.
One good tip is to put your name on the lease. This means that should the relationship break down and one partner needs to move out, the person whose name is on the lease is better positioned to remain living in the current space. If the couple both put their names on the lease then they will both have the option of staying where they are and renewing the lease in their name alone.
Another good tip is to create your own personal budget. Prior to paying a moving company or signing a lease on a new apartment you should stop and create for yourself a budget for all of the new monthly bills such as utilities, rent, and anything else that you will now have to pay for. Do not neglect to include in this budget the cost of moving, new furniture, security deposit, moving supplies, etc.
Items should be purchased individually. This means that in the unfortunate event that the relationship breaks down, the person who bought the bed or TV is entitled to keep it. Maintaining good financial records is also a matter of great importance. Keep bank statements, credit card statements, receipts or a journal detailing purchases and expenses so that it will be easy to divide everything up if need be at a later point.
If the relationship does end then it needs to be worked out who is the most financially able to move. People who have shared the cost of household expenses and rent often find it very difficult to be able to afford an apartment on their own in addition to the cost of a new security deposit and moving expenses. Joint bank accounts should be closed, and if you have any joint accounts then the balance should be divided fairly and then the accounts closed down. Any automatic payments that may be coming from the accounts should be canceled prior to the closing of the account, as should any direct deposits. Items that cannot be divided should be sold off.
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