3 Questions to Ask About Money Before Moving In Together

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Moving in togetherWhether you're moving in with a roommate to save money or with a romantic partner as that next relationship step, combining households means combining finances. From who pays for what to how you'll save, here are three things to consider before you start packing those boxes.

1. What's Your Magic (FICO) Number?

It may seem gauche to ask for a living companion's credit report, but Denise Winston, a former banker and author of Money Starts Here! Your Practical Guide to Survive and Thrive in Any Economy says that not knowing can be a costly mistake that adds up quickly over the years.

Why? A poor credit report can impact everything from getting a job to buying a blender. "Many employers check credit during the hiring process, so it may affect earnings potential," Winston says. "It could also affect where you live, as landlords often check credit for potential renters."

The same holds true for rates for car loans, mortgages, and insurance, as well as APR and eligibility for credit cards -- including that retail card you sign up for to save 10 percent on a new blender.

2. Who Will Pay for What -- and When?

Christina Steinorth, author of Cue Cards for Life: Thoughtful Tips for Better Relationships, says that before moving in together, it's important to set up a joint budget. "Include everything: utilities, food, insurances for car, home, health. If you plan to have children, include the expenses that go with raising a family," she says. "Think of everything possible. You really can't be too prepared or detailed when it comes to budgeting."

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Kevin Gallegos, a vice president with Freedom Financial Network, says that budgeting is imperative, but shouldn't just be about money.

"The key is to set goals first. These are life/activity goals, not only financial. This is where couples discuss the types of things they'd like to do in retirement, the kinds of vacations they want to take, and specific items they may want to purchase," Gallegos says. "Goals also can include time-based ones, such as making sure to have time to train for a marathon. This process allows for incorporation of both [of your] ideas -- maybe there's one vacation camping and backpacking, and another that's a trip to Europe."

3. Whose Name Will Go Where?

For every household bill, someone has to sign on the dotted line. Will both names go on a lease or mortgage? Will one person be responsible for heat and the other for hot water? Will the sloppier one pay for a cleaning service to keep the peace? What are the deposits required for each service? Will additional deposits required as a result of one of you having bad credit? How will overages on a shared calling plan be managed?

Even the most thorough list can overlook cohabitants' discretionary spending on things like food, alcohol, and entertainment. Matchmaker Jacqueline Nichols says it's important to ask, "How will you each compromise so no one feels they're carrying the greater load or are being unfairly restricted?"

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If all the careful planning and discussions don't help create harmony, there may come a time when one person has to move out. Knowing up front who will leave, and how any deposits will be split or utilities signed over, can help minimize the chaos and heartbreak of dividing a household. This can be an easier decision if one person moved into where the other person already lived, but a little trickier if two people rented or purchased an apartment or home together.

While each living situation is unique, Nichols says there's one rule that's good sense across the board: waiting. "We're on our best behavior for the first 12 months of a relationship. After that, we tend to a let our guard down a little," she says. "If there's going to be any type of thing you may raise an eyebrow about when it comes to your partner's financial habits, it will probably start to show up sometime after the 12-month mark."

You can follow Motley Fool contributing writer Molly McCluskey on Twitter @MollyEMcCluskey.

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13 Money Lies You Should Stop Telling Yourself By Age 30
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3 Questions to Ask About Money Before Moving In Together

The job market may not be what it used to be, but by age 30 no one should be toiling away at a job that leaves them stressed out and dissatisfied with life.

We were inspired by a young woman who wrote about turning her back on a lucrative job on Wall Street after years of 14-hour work days made her overweight, burnt out and miserable.

"I'm a few months into my new job [as an asset manager for a nonprofit] and it's made my life richer. I'm making an effort to breathe, smile, eat healthier and have positive thoughts about my future," she wrote.

"I took a pay cut of about 30% to change positions, but I don't think that I should be applauded for making the choice to accept less pay -- I don't view it as a sacrifice."

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The worst thing I did in my early 20s was ignore financial red flags when I saw them.

I didn't check my bank account for fear of how low the number would be; I left my credit report untouched for five years; and I didn't realize my first job even offered a matching 401(k) until I quit because I stuffed that folder in my desk and never looked at it.

Look: If you're broke, you might as well know it and own it. It's the only way you'll ever truly be able to do something about it.

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I'm a few years shy of 30 myself and it baffles me how many couples -- men and women alike -- tell me they're planning on tying the knot by 30.

There are few people my age who can actually afford the $27,000 the average American wedding costs these days.

Why kick off your lifetime union with a massive pile of debt that will only cause stress and inevitable arguments down the line? If you're truly in love, chances are The One will still be around by the time you're both financially fit to face those bills together.

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At some time (and for a lot of you, many times), life eventually will get in the way and you'll find yourself on the wrong side of your bank or, worse, a bill collector.

Stand your ground. I've been negotiating my way to lower credit rates, health care, cable bills and bank fees since I took out my first line of credit at age 18. I do it mostly by phone and by monitoring my accounts dutifully, and I rarely take no for an answer.

If you're ever in doubt, think about Kenny Golde, a 40-something Hollywood producer who managed to negotiate $220,000 worth of debt down to $70,000.

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Researchers from the San Francisco Federal Reserve found people who earn 10 percent less than their neighbors are 4.5 percent more likely to commit suicide.

The key word here: Neighbors. Where you choose to live can have a big impact on how you view yourself, not to mention your financial well-being. Don't make the move until you're prepared.

Real estate expert Scott Sheldon points out that consumers aren't ready for homeownership until their debt-to-income ratio falls below 45 percent:

- Calculate your DTI: Proposed mortgage payment + all minimum monthly debt obligations ÷ gross monthly income.

- Calculate your maximum mortgage payment: Gross monthly income × .45 (45 percent DTI) − all minimum monthly debt obligations.

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If you've managed to build a 401(k) with your employer, now is not the time to start chipping away at all that hard-earned retirement cash.

For starters, you'll be charged a hefty fee for early withdrawal. It's also tantamount to stealing from yourself in old age.

When times are tight, trim your spending, reevaluate the purchase you intend to make, or find ways to supplement your income. You'll thank yourself later on when you see how much your savings grow.

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When I started earning enough to consider long-term investing, the biggest hurdle was figuring it all out with zero prior knowledge. I started small with a savings account, then built my way up to a 401(k) and Roth IRA through my employer.

I'm glad I did. According to personal finance expert Kimberly Palmer, someone who begins investing at age 25 will only have to save $4,830 annually to reach $1 million by age 65, accounting for an annual return of 7 percent after fees.

That figure triples to $15,240 if you wait until your 40s.

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There's a reason older people are nostalgic for their 20s. Now they've got a mortgage and a brood of screaming toddlers, and they miss doing whatever they pleased whenever they pleased.

Perhaps they've forgotten the first few years out of college -- that frenzied time when everyone was out for themselves, scratching, clawing their way to success.

There's such thing as healthy competition, but spending every waking moment trying to "beat" your peers is a quick way to wind up alone and miserable. Do yourself a favor and focus on your own path, not stalking your friends' career moves on Facebook and LinkedIn.

And take heart in this fact: It's been proven that the average person doesn't get any happier after they earn $75,000 per year.

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No one can predict the future, but chances are yours involves a body that has far less tolerance for chili cheese fries and 4 a.m. taco runs.

Studies show that metabolism actually slows 2 percent for every year after you turn 30, and weigh gain can lead to a range of health issues later in life.

Do your finances -- and your belly -- a favor and change some of your eating habits now.
I'm not talking about whipping up five-course meals every day of the week. Niche grocery stores like Trader Joe's and Whole Foods post simple recipes on their websites to match their inventory, and there are even businesses that will send healthy 'meals-in-a-box' straight to your home.

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Four months ago, I walked into Bank of America to make a routine deposit and walked out with a rewards credit card limit that was more than six times my usual.

It wasn't as if I hadn't earned it, I thought. I spent the last two years dutifully paying down each of my debts and it was high time I had something to show for it.

And then I went shopping. It started as a means of paying for furniture for my new apartment (points), then a grocery fund (points), and, when I went to visit my family for the holidays, it was the card I used for gas (points).

Before too long, I realized I'd bitten off more than I could chew. And now I'm paying for it. The point is that no matter how big your credit limit, or how fat a mortgage loan your bank offers you for a new home, that doesn't mean you have to take it. Know your limits and what you can afford. Then tell them how much you need.

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There's a saying career experts love to toss around: Dress for the job you want, not the job you have.

It makes sense. Unless you've managed to finagle your way into your dream job by age 30 -- and are secretly hated for it -- part of the battle is making others believe you can handle it.

Leave the flip-flops at home, invest in a wardrobe that shows them you're ready for responsibility -- and the heftier salary that comes with it -- and you're already on your way.

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"There is nothing more destructive to one's financial future than bringing children into the world without having an established and stable means to support them," writes finance blogger Len Penzo.

He has a point. It costs nearly $240,000 to raise a child in the U.S. -- and that's not even counting college tuition once they leave the house.

And it's not just your finances that will suffer if you're not prepared, Len Penzo notes.
"...it becomes extremely difficult to start a business, or gain the necessary experience, on-the-job training and/or education required for the type of career advancement opportunities that lead to significantly increased earning power."

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It's too bad that youthful sense of invincibility doesn't wear away with age. I'm lucky enough to have insurance and I still practically have to force myself to set up annual physicals and checkups throughout the year.

And these days, it's becoming disturbingly common for consumers to skip medical treatment simply because they can't afford it.

Preventative care is crucial, and as DailyFinance's Nadine Cheung points out, that's still no excuse.

"Find free or low-cost services, like flu shots and blood pressure checks, at your local drugstore," she writes. "Many areas have local clinics that are free, or offer health care at reduced prices based on your financial status. Research and choose a location before you need medical care, as some may require eligibility screening before you can utilize the clinic's services."

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