by Tony Rigby

FEB 2014

Gone are the days that the words ‘I do’ have to be exchanged between two people before they decide to move in together.

Love is in the air, and if you are flirting with the idea of shacking up with your Valentine, it’s important to consider the financial implications of doing so before rushing to Ikea to furnish your new place.

Today, 78% of Australians cohabitate before marriage, so if you and your partner are looking to take the plunge of renting or buying together, now is the perfect time to have a serious discussion about money.*

Start the conversation

Consider these tips to help your relationship last beyond the first electricity bill.

Communication is key

Commit to being honest and open with each other about finances when you move in together.

Living under the same roof can put pressure on any relationship, so to avoid unnecessary stress, make sure you’re on the same page from the get go to make the most out of living as a couple.Nobody wants to be stuck with a dud housemate, so alleviate the concern by sharing what you hope to get out of your living situation with your partner early on.

Will you……. split the bills with me?

Cover expenses

It’s becoming increasingly popular for people to use a ‘dynamic’ budget, which links directly to your debit and credit cards to track spending habits.

While it may not sound very romantic, this modern day take on budgeting can identify how much you can afford to put towards rent, bills, groceries and other household expenses each month. In the beginning many couples choose to split their living costs straight down the middle, which can be easily done through the creation of a joint expenses account or BPAY.

Read more: The moving in together checklist

Money matters

Make sure you are aware of any personal loans or black marks your partner may have against their name.

If they are struggling to pay down a massive credit card debt it could end up affecting you in the future when you want to secure a loan yourself. Until you’ve been living together for a while, it’s best to keep your finances and assets apart (except for a joint expense account). By doing so, each person will remain responsible for managing their own spending and the consequences that follow.

Keeping finances separate is also a good way to protect your credit rating, which can take years to build.

Protect yourself with a cohabitation agreement

Family Law protects couples who choose to live together in de-facto and married relationships through cohabitation agreements. These can be drawn up by lawyers and are a good way to ensure any assets brought into a relationship, such as property or shares, remain under an individual’s control in the case of a break up. While your love for one another may seem undying now, it’s best to have a written agreement in case the relationship turns sour.

Investing in property

If you and your partner are looking to get into the property market together, the standard purchase contract is usually a joint tenancy.

However, depending on the contributions being made, you may want to consider a ‘tenants in common’ contract instead. This takes into account the percentage of ownership, such as an 80/20 or 60/40 split, which may be fairer if one person is putting in a larger deposit. A ‘tenants in common’ contract is beneficial for those who want their share of property to be returned to their estate if they die, rather than it being automatically transferred to their partner.

How to discuss sharing finances with your partner