When moving in with a new partner, there are lots of factors to take into consideration. One of the main things to talk about are your finances, and you must be both open about how you want to manage them. Moving in together will initially affect your finances as you will be sharing household costs. You may open a joint bank account or take out a mortgage together.
You may also have different views on who will manage the household finances. You may also be apprehensive about talking about finances if you have previous bad experiences with money. But, you must both agree on how you are going to move forward effectively with your partnership and money is an important part of that.
Joint loans and debt
When two people take on joint accounts and investments such as a mortgage or a bank loan, they both become equally responsible for paying off the whole debt. Their credit records instantly become linked. So, before any of this happens, you both should be open and honest about any unpaid debts. This will leave no surprises when applying for loans and mortgages.
Something else to decide is whether to open a joint bank account. You could opt to pool your salary, earnings and any other income such as pensions and benefits, or continue with separate bank accounts. Joint bank accounts do have benefits. However, some disadvantages come with these too. If you and your partner separate and disagree who is responsible for paying any overdrafts, the bank may not hesitate to ask one person to pay off the whole debt solely if the other can’t be traced.
Make a living together agreement
A ‘Living together agreement’ gives a clear overview of what both partners have agreed to do regarding finances and what should happen if the couple were to part. The agreement is a good idea if you are moving in together but not planning on getting married or forming a civil partnership. As, when you live together, and you are not married you don’t have as many rights in the eyes of the law. This is just a sensible way to make an explicit agreement. It could save lots of worry, heartache and potentially legal bills if you were to separate.
You may need to review your existing life insurance once you and your partner move in together. Or, if you have a joint mortgage, you should legally take out life insurance to go alongside your mortgage or check that your existing policies provide the current cover.
Sorting out any financial issues before you move in together could really help avoid issues later down the line. It could be a hard conversation to have, but it is better to air any issues before moving day commences.