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Moving in together as a couple is more than deciding who gets the “good side” of the bed and finding the best spot to stash the PlayStation. Not only will you be sharing household bills and probably setting up joint bank account, but you’ll also get up close and personal with your partner’s money demons for the first time.
“A husband or wife, even a boyfriend or a girlfriend, is not a financial plan,” says Dr. Taffy Wagner, CEO of Money Talk Matters. “We’ve seen enough drama on Court TV shows.”
As a certified personal finance educator and author of Bride and Groom Money Talk FAQ
, Wagner’s an expert on all things relationships and finances.
Before you start building a bigger closet, make sure you’re both ready to merge your finances by checking for these six signs:
1. You can talk money without arguing. Per Wagner: “When you can openly discuss finances without arguing and blaming the other person when there is a financial issue,” you’re on the right track. “The people in this situation would also be able to discuss a financial issue and reach a viable solution that is best for the overall relationship.”
2. You don’t feel controlled. So long as your partner isn’t peering over your shoulder each time you whip out the checkbook and you feel like you have equal ownership of your shared finances, you should be in good shape. “In some relationships money is used to control the other person,” Wagner says. “People do not like to be controlled, let alone using money to do it.” (It’s also a great way to wreck your relationship.)
3. You’ve both taken a good look at the other’s credit report. Forget sharing toothbrushes—forking over your credit history is a huge sign of financial trust in a relationship. It’s unavoidable, especially if you’re looking to buy or rent a home together, and a good place to get equal footing. “The couple has to decide whether or not their place of residence will be in the name of both or just one person,” Wagner says. “Sharing the credit reports will remove the ‘hidden element’ of potentially one person not having good credit and that impacting the other person.”
4. You’re both paying the bills on time. If you don’t have to worry about your partner missing the cable bill, it’s a good sign he or she would make a great roommate. “If one person is not paying their bills on time; have the discussion as to why they are not and what is their game plan for getting back on track,” Wagner says. “If they do not have a game plan for getting on track – that should be seen as a red flag and you should delay moving in together.
5. You don’t break out in a cold sweat when talking about the future. “Knowing for sure if you are compatible requires taking time to get to know each other with friends, family and away from them,” Wagner says. “You need to make sure that the other person is not just pretending. What do you both think about saving money? What are each other’s plan for retirement?”
6. When you both know how to handle the worst. “Ask the person how they handled their last financial challenge. Did they run to their parents? Did they get an advance at their job? Or did they re-evaluate their spending, make adjustments and get it cleared up?” Wagner says. The answer will clue you into what kind of support you can expect if you ever run into a tight spot and need a partner to lean on.