While we like to think that the causes for breaking up relationships are more obvious and dramatic, like an illicit affair, most of the time, couples end their relationships for more mundane—but still no less important—reasons. One of the biggest problems that plague relationships is finances. While being married can make financial problems worse, married couples face different financial problems than unmarried couples, simply because most of their finances are usually pooled together. But what if you live with a significant other? How should you manage your finances when you don’t yet have the commitment of marriage but you still live under one roof? Here are a few tips based on my experiences:
1. Be completely transparent about your money situation and how you feel about debt and finances.
This is perhaps the most important part of dealing with finances in conjunction with a significant other. In order to manage your money correctly, you should have more or less the same views about the role that money plays in your lives. Tell each other about your respective debt situations and what your long-term goals are for paying it off and eventually investing. The great thing about relationships is that you can encourage each other to be more responsible in various facets of your lives, including money.
2. Don’t make any large purchases together.
Of course, at this point, you want to believe that your relationship will last forever, and maybe it will. But since you aren’t committed the way that a married couple is committed, there’s a high likelihood that at some point, your relationship may end. It’s best to avoid purchasing expensive items together, like a car, or anything that could incite an argument when you’re splitting your belongings after a possible break up (pets come to mind under this category).
3. As much as is possible, split everything right down the middle, and keep separate finances.
Many of you will have different thoughts about splitting all expenses down the middle, and I can certainly see both sides of the argument. Even if your partner insists on paying all the rent, this act of generosity can eventually become a source of resentment later in your relationship. By splitting costs down the middle (or splitting them fairly based on earned income or other factors), you will never owe your partner anything and vice-versa. This way, you can focus on more important parts of your relationship, like strengthening your bond and commitment.
4. Do not co-sign on loans, credit cards, or other assets/debts.
Even if you are transparent about your debt situation, it’s much wiser never to actually share any debts. By co-signing on loans or credit cards, in the event of a break up, you may be held accountable for debt that you never incurred.
Of course, money should never be a central reason for being together or breaking up. If you converse very frankly about money, and if you commit to helping each other with financial planning but not with finances themselves, you’re relationship will succeed. If, in the worst-case scenario, it doesn’t, you won’t be financially entangled, and you can both part amicably with peace of mind.
Katheryn Rivas frequently researches and writes about a variety of topics, yet her main interests include education and the validation of accredited online universities. For questions or comments, she can be reached at firstname.lastname@example.org.