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First-time Buyer

Five things to discuss before moving in with your partner

Emma Lunn
Written By:
Emma Lunn
Posted:
Updated:
14/02/2022

It’s Valentine’s Day and love is in the air. But don’t let your heart rule your wallet – it pays to be money savvy if you move in with your other half.

This Valentine’s Day will undoubtedly see thousands of couples taking the next step in their relationship – moving in together.

According to the Office for National Statistics, there are now 6.3 million cohabiting couples in England and Wales who are not married or in a civil partnership.

But before signing on the dotted line of a joint rental contract or mortgage, it’s a good idea to talk about money.

Here are five conversations you need to have.

Budgeting for bills

Every couple manages their money differently. But a joint account for joint expenses can work for most cohabiting set-ups.

With the cost of living on the up, making sure you have enough cash for household bills is essential.

Emma-Lou Montgomery, associate director for Fidelity International, says: “It’s important to ensure you have enough funds to comfortably cover everyday items, so you’re not overstretched. It’s a tricky balancing act and one that requires careful monitoring of your essential and non-essential outgoings and subscriptions, but it’s well worth the time as you could find some substantial savings.”

Agree mutual goals

Setting out one or two mutual financial goals will give you something concrete to work towards as a couple.

Goals might include buying a property together, getting married, having a baby or going on a big holiday.

Amy Pethers, wealth adviser at Brewin Dolphin, says: “Having goals is important because it helps you decide how much money you need to save, and where to invest it. If, for example, you want to move to a bigger property in three years’ time, then it probably makes sense to put this pot of money in a low-risk cash savings account. That way, you won’t run the risk of your savings plummeting in value just before you need to access them.

“For goals that are 10 or more years away, you might want to consider investing at least some of your money in the stock market. This will give your money the opportunity to grow over the long term, helping you reach your goals more quickly.”

Remember to be independent

While you might have a joint account, it’s important to remain financially independent so you and your partner are both prepared for life’s unexpected costs or changes to your relationship.

This will also mean you’re not beholden to someone else and have the freedom to move forwards in life without restrictive financial ties.

Montgomery says: “Set a clear joint budget for the months/years ahead but also have a personal ‘emergency fund’ for yourself – this extra spending money can be put towards your personal pension and future savings, used for a big-ticket item or just to treat yourself if and when the time is right.”

Think about the worst-case scenario

Talking about death and illness probably won’t make your list of best-ever date nights, but it’s really important to consider how your finances would hold up if the worst were to happen.

As a couple your finances may be closely intertwined, which means if one of you suffered a serious illness or passed away, the other could really struggle financially.

A financial adviser can help you decide on the right policies and level of cover for your personal circumstances.

Pethers says: “This is also a good time to think about drawing up a will. Writing a will ensures your money and other assets go to the right people and causes, and that your wishes are carried out. Having a will is especially important if you aren’t married or in a civil partnership – even if you’ve been living together for years, you’ll have no entitlement to your partner’s estate if they die without a will. “

Buying a property

If you’re buying a property with your partner but you’re not married, it’s important to discuss how the property will be owned.

Sean McCann, chartered financial planner at NFU Mutual, says: “If the property is held as ‘joint tenants’ this means that on the death of one of the partners, their share in the property will pass to the survivor. If it is held as ‘tenants in common’ each is free to leave their share to whoever they wish in their will.

“Issues can arise if one of the partners dies without a will and their share of the property passes under the laws of intestacy to children, parents, siblings or other relatives.

“Ownership can be changed from ‘tenants in common’ to ‘joint tenancy’ but it’s important to seek legal advice.”