A friend of mine asked if I could compile a list out of a recent article that I wrote about Financial Compatibility. As we know, things change when you move in with someone. Sometimes more than we initially realize…some examples may include (certainly are not limited to):
1. Jointly paid bills
Ex: Rent, electric, utilities, cable or Internet
Either you split the cost down the middle, or you split the bills by deciding who pays what.
2. Joint accounts (checking, savings and emergency fund)
This may be an option to some couples. It makes paying bills and saving for joint purchases easier. Usually helps if you both have the same bank (instant transfers).
3. Who’s name goes on the bills?
Two people. One bill. The electric and cable company may only require one name. So who’s responsible for it? Technically, you both are. But sometimes it is best to put everything in one name. If you can, add the second name to the account in case something happens down the road and you both need to be authorized to make a payment
4. Double income
When you move in with someone, technically you have the support of a double income household. However, don’t let this get the best of you. For some reason people tend to spend more when they thing they have more money.
5. Buying for two (or more)
Even though you are splitting the cost of your living expenses, other expenses will go up because you are buying for two (or more) people. Ex: Food and Entertainment
6. Other expenses
Odds and ends that you both use but are not paid for by splitting the cost. Sometimes it’s almost pointless to split the cost of buying a DVD or video game, even though you both use it. Over time these things add up, but you cannot always account for them. This can also include things that you both take advantage of but only one person pays for – such as a price-club or gym membership that can be shared.
7. Penny Pincher vs. Big Spender
You may come across a conflict where one person is a coupon-clipping, sale hunting, price-conscious person and the other is a compulsive, trend-focused “high-rolling” buyer. Naturally, you can see how these two personalities wouldn’t agree. But you have to learn how to get over it or compromise.
8. It’s not all about you anymore
When you make a purchase, you have to consider the other person. You cannot simply buy things without thinking about whether your significant other needs/wants it too.
9. Compromise on purchases
She likes blue, he likes red. She likes sweet, he likes spicy. See where this is going? There are times when you can have both, but there are times when you cannot. Compromising on what you buy can often save you a lot of aggravation later. If my boyfriend and I cannot compromise, we decide the old-school way. Rock – Paper – Scissors… Shoot. Winner picks. No “but” about it.
10. Sharing purchases
Some people have issues with sharing. But when you live with someone, you have to get over that, quick. Unless it’s a personal item, if you buy something you should expect that you will both use it. If not, I would say make it explicit that the purchase is only yours.
11. Troubles when one partner makes more than the other
This is especially a problem when the woman makes more than the man. Don’t get me wrong, some men like it. But for some reason, their ego is bruised and they think that it compromises their manliness. Also, this tension can come into play when there is a business involved.
12. Care-free Spender vs. Structured Budget
This is one from my personal experience. One person has never kept track of their money, while the other is used to going by a structured budget… so both will feel pressure (don’t confuse this with penny-pinching and big spender – you can be budgeted without saving every dime and you can be care-free without spending a lot of money).
In general, the care-free spender will feel restricted. The budgeter will feel overwhelmed. There will have to be some common ground for the two to work together. I solve it by collecting all of my boyfriend’s receipts and analyzing the budget, while he’s ok as long as he gets to buy things that he’s interested in, in addition to saving up for larger purchases.
13. Picking up the slack
If one person gets sick and cannot work, money will get tighter. The other person has to be willing to pick up the slack if need be. As they say, “In sickness and in health…”
14. Sloshing funds
At some point in the relationship, you may realize that your money is their money, and vice versa. It requires a certain level of trust and respect. Just hope your other half realizes that too.
15. Fewer dates
Remember when the relationship started? Everything was fun and exciting. You were probably spending a lot of money on going out, which was a necessity to see each other. But once you move in together, that’s not going to happen as much. It would get really expensive, really fast.
16. Taxes
If you’re not married, this won’t change much. You will not be able to file your taxes jointly. If you are married, your filings will change. Check with an accountant for details.
17. Investment purchases
This includes buying a house and any other purchase made to benefit the both of you for the long-term. Some people get jittery over this because it is a big commitment. It is a big step, so make sure you are ready for it.
18. Spending priorities
As they say: TPO, the party’s over… Gone are the days of delaying paying off bills in order to making sure that you were the coolest kid on the block. Guys, no need to spend hundreds (maybe thousands) on impressing chicks. Girls, no reason to splurge on that thousand-dollar designer bag or no need to worry about going clubbing to catch a man. Time to settle down. Now, you can count on spending those hard-earned dollars on other things, like paying bills on time, making household purchases, and saving for a rainy day.
19. Moving out of state
This is also a personal experience of mine, one of which that I failed to properly account for. If you move to another state to be with your other half, several things will can/ will change – and they all cost money. For starters, you will have to change your vehicle title, insurance, your license, and residency. In turn, you will also be subject to new state income taxes and will have to file taxes for (both) different states at the end of the year. But probably the largest financial change is that you will have to find a new job.
20. Misc.
Have a pet together? Or perhaps your other half pays for your vehicle insurance for you. Maybe you’re lucky enough to have your tuition paid for too. Sometimes money is no object (if only we were all so lucky). If not, just realize that these are a few financial details that can change when you decide to move in with someone else.
~K
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I think a lot of your list works not only for couples moving in, but just friends who are roomates. A lot of the things you listed are true such as bills, entertainment purchases, groceries that there has to be compromise from both parties and a system needs to be put in place.
Craig
http://www.budgetpulse.com