They say money is the leading cause of divorce. I’m still looking for the hard proof, but even if it is just an (ex-) wives’ tale, it’s believable.
Today, unmarried couples often live together before tying the knot. And while smart couples give cohabitation serious thought; many don’t realize there’s more to shacking up than putting the toilet seat down and tolerating poker night.
Ben Franklin might as well be your boyfriend’s unemployed college roommate crashing on your couch “just for tonight” for the third straight week. No matter how you deal with him; he’s always going to strain the relationship.
So how do you ensure money doesn’t split your relationship faster than you can assemble your IKEA furniture? Follow these simple steps. You’ll be glad you did if you ever split up. And, if you ever do get hitched, learning how to deal with money early may someday save your marriage.
Do Not Share Assets – Do not buy anything together. That goes for houses, cars, and furniture, and especially checking accounts. Yes, you love him or her. But if things go sour, each takes their own.
Do Not Share Liabilities – Never, ever, ever cosign a loan for your partner. Whether you stay together or not, if he or she defaults, you either pay up or lose your credit. Cosigners should be family members. End of story.
Do Share Expenses – Decide before you move in whether you will share expenses fifty-fifty or proportionately based upon salary. You may consider opening a joint checking account just for paying expenses. This should only be for bills and groceries.
Plan for the Worst – Although unlikely, consider the possibility that one of you could die. You’ll need to choose beneficiaries for everything from insurance policies to retirement plans. What about health care proxies? Do you want to be the ones to make health care decisions for each other if you should become incapacitated?
Living together can be an exciting step in any relationship, but follow these steps to protect your finances first. If you don’t, without the legal protection of marriage, you’ll be on your own in more ways than one if things don’t work out.