At Super-Advice we are about all things financial, but more importantly, helping people understand so they can get ahead financially.
Moving in with a partner is a big step and it’s wise to consider the financial implications. Here are the top five financial considerations to keep in mind.
Discuss financial goals and values
Before moving in, have an open conversation about your financial goals, your values, and your habits. This includes discussing your income, your debts, savings, and what financial independence means for each of you.
Understanding where each person stands financially, and what their expectations are for the future, can prevent misunderstandings and conflicts later on.
Create a budget for shared expenses
Determine how you will split shared expenses such as rent, utilities, groceries, and household items. Decide whether you will contribute equally or proportionally based on your income.
It’s also helpful to create a joint budget to manage these expenses and plan for future savings goals together.
Decide on a banking strategy
Consider whether you will keep your finances separate, combine everything, or have a combination of both, such as maintaining individual accounts, but also having a joint account for those shared expenses.
Each approach has its pros and cons, so choose what works best for your situation.
Plan for emergency and long-term savings
Discuss and agree on how much you both should contribute to an emergency fund that can cover unexpected expenses.
Additionally, talk about long-term savings goals, such as saving for a home, holidays, and retirement, and how you plan to achieve them together.
Understanding legal and tax implications
Living together without being married can have legal and tax implications. For example, you may not have the same legal rights as a married couple in the event of a breakup or one partner’s death. It may be wise to create a cohabitation agreement. That outlines what would happen to your shared assets if you were to separate.
Also, understand how living together affects your tax situation, as there may be benefits or drawbacks depending on your circumstances.
That’s a wrap
It’s essential to keep the lines of communication open and revisit these topics regularly. As your financial situation and goals will probably change over time, consider seeking advice from a financial adviser or a lawyer for personalised guidance tailored to your unique situation.
If you need any financial help or advice please get in touch with us at Super-Advice.
