When I was 17 years old, my mother told me:

“In my house, you follow my rules or you move out!”

I wasn’t a rebellious, argumentative child, but I wasn’t submissive either. I chose to move out. I move in with my girlfriend who was a few years older and who had her own place.

I don’t remember our financial arrangements, but we never had any money issues. Our relationship didn’t last long, I was truly too immature. She dumped me in less than one year.

But there I was, with too much pride to go back home.

Fortunately, girls found me good-looking and within a few weeks  I found myself moving in with my next girlfriend. And so on and so forth, I lived an array of relationships. I will spare you the personal details, but I will share with you the financial lessons learned while living with a girlfriend.

Things to consider when moving in together

Big-time savings

When a couple ends up moving in together, there is the potential to save lots of money. They share one bedroom, one kitchen, one bathroom, one living room. Maybe the will have a second bedroom that they could use to have some space away from each other.

Also, the savings in utilities, food, and entertainment are significant. It’s cheaper to eat at home, Netflix and chill than to go out to a restaurant and to the movies.

Who pays what?

Generally, people date other people who are in similar economic situations. Although it happens to date someone who earns significantly more (or less), those situations are less common.

Separate accounts: This is a very natural arrangement. Each person keeps their own personal accounts. They pay the common expenses such as rent and utilities half and half, and all the other expenses such as telephone, car, etc, they pay them separately.

There are other related expenses, such as going to the movies, going out to dinner, going on vacation. For these expenses, each couple develops their own system. All of them could be valid, as long as they are done in goodwill.

Joint account: Some couples create a joint account where both of them contribute proportionally to their income. This account is used for shared expenses such as rent and utilities, and then each person continues holding their own personal account for their personal spending. This option is very nice, the couple doesn’t need to be exchanging money every month, they could make the money transfers automatically. I highly recommend this option.

Things to be considered

The spreadsheet person: I once knew a girl. Her boyfriend had a spreadsheet where he had calculations of every expense, computed to the penny. This was a bit overboard. needless to say, she dumped him after a few months together. But this kind of relationship works for some people. It’s just not my ideal scenario.

The moocher: I have met many couples whereas one of them is a moocher. One of them hangs out but contributes very little(financially) to the relationship. I had one of those relationships one time. My girlfriend was a sweet and lovely person, but I grew resentful very fast and our relationship didn’t last more than a couple of months after we moved in together.

Tax consequences

As soon as you are living in a conjugal relationship, you are treated differently by the tax authority. The consequences are different from one province to the other, but from that moment on, you will have to declare your taxes jointly. You are a household now, you are no longer an individual. From a tax point of view, it could be advantageous to file jointly.

Legal consequences

Moving in had legal consecuences. Depending on the province where you live, after 2 or 3 years living together, you may be considered a common-law partnership and one of the partners may have some legal obligations towards the other.

Dealing with debt

Each partner is responsible for the debts they acquired under their own name. One is not responsible for the credit card debt, student payment, or car payments of the other.

Only those debts acquired together, where both signatures are in the piece of paper, the debtor is allowed to seek compensation from either partner. Both of them are responsible. If one doesn’t have the money, then the other partner is on the hook.

What if they have a child together

A child changes all the dynamics of the relationship.

In this instance, the couple becomes responsible for the wellbeing of the child.

If one of the partners decides to stay home and become a stay-home mom or dad. In this case, the other partner becomes the sole breadwinner of the family. And although the breadwinner is the one bringing in the cash, the cash belongs to both partners. In case of a separation, the breadwinner becomes financially liable to the child and to the ex-partner.

Division of property in case of separation

When a couple gets married, all their possessions become common property. If they get divorced one year later, everything they had should be divided in half.

When a couple ends up moving in together, that’s not the case. Each partner is allowed to take with him/her what they brought to the relationship. Let’s say that I have a big house and a savings account when I met my girlfriend. When we separate, I get to take all of that with me. I don’t have to split it.

However, whatever we acquired together, that is common property. We might decide to divide in a way that’s logical to us, but if challenged in court, the court may decide to split it half and half.

Related articles

Beware of deadbeat boyfriends

Related Posts

1. Are you House Rich, Cash Poor?
2. Mortgage down payment, how much do you need
3. Interest rates: Variable rate or fixed rate?

Connect with me

I would love it if you connect with me via social. You can find me on Facebook, Twitter, LinkedIn,  YouTube, and Instagram.