8 Tips for Protecting Your Finances Before You Move In With Someone

Couples moving in together in an apartment

Couples getting ready to move in together should enjoy the excitement, but they should also be prepared for the worst.
A recent study by Rent.com of 1,000 renters found that 38 percent of renters had ended a personal relationship with someone they were living with at some point in their lives. And the majority of those -- more than 60 percent -- continued to live with their significant other for another month or more after breaking up as they worked to split up their stuff and find new places that fit their single budgets.

Respondents said that the most difficult part of moving out was splitting up possessions (not finances); and their No. 1 precaution (and lesson learned) was to save more money before moving in with someone else.

To learn more, we reached out to life coach Dr. Michele Callahan, who has been featured on "Oprah" and "Dr. Oz," as well as in other media, and she sent us her most important financial advice for couples who live together:

Add your name to the lease. In the unfortunate event that you break up with your partner and one of you has to move out, the person whose name is on the lease is in the best position to maintain possession of the space. If both names are on the lease, you each have a close to equal opportunity to remain in the apartment and renew the lease.

Create a personal budget. Before you agree to rent a new apartment or pay a mover, stop and create a budget for your new monthly bills that includes rent, utilities, and anything else that you may now be paying for on your own. Don't forget to include your moving expenses, such as moving supplies, security deposit, new furniture, etc.

Purchase items individually. That way, in the unfortunate event of a breakup, the person who paid for the TV or bed is entitled to it, and the person who bought the sofa can take it or swap it with their partner for something else.

Keep good financial records. Keep receipts, bank statements, credit card statements or a journal of shared expenses and purchases to make it easier to divide things up later.

And if you end the relationship:

Determine who can afford to move. After sharing rent and household expenses, it can be a challenge for people to save enough money to find an apartment they can afford on their own, in addition to covering moving expenses and a new security deposit.

Close joint bank accounts. If you and your partner have any joint accounts, now is the time to fairly divide the balance of those accounts and close them. If you have any automatic payments coming out of the accounts or any direct deposits going into it, you should cancel all of those automated processes before you close the account.

Refinance joint debt. If you have any joint credit cards or have been sharing one individual card, talk with your partner about determining who is responsible for which charges so that you can either payoff the balances or arrange to have your fair share of the outstanding debt transferred to your individual accounts.

Sell the items you can't divide. One of you can agree to buy out the other person's share of the item or make a reasonable exchange of items to balance things out. If you can't come to an agreement, sell the item and split the proceeds. This may be necessary with a big-ticket item like a car if neither of you can afford the monthly cost on your own.

More from Business Insider:

Americans Have Good Reason to be Worried About Retirement
JCPenny's Last Hope is Here and it Looks Great
Here's the Best Month to Buy Everything

The 10 Cheapest Cities In America
See Gallery
8 Tips for Protecting Your Finances Before You Move In With Someone

Price of T-bone steak: $8.98

Cost of orange juice: $2.98

Average monthly utilities: $146.68

Median rental cost: $798

Average home price (2,400 sq. foot, 4 bedrooms/2+ bathrooms): $223,371

By Business Insider

Photo: Flickr / Sean Loyless

Price of T-bone steak: $9.57

Cost of orange juice: $2.79

Average monthly utilities: $155.62

Median rental cost: $610

Average home price (2,400 sq. foot, 4 bedrooms/2+ bathrooms): $217,376

Price of T-bone steak: $8.98

Cost of orange juice: $3.36

Average monthly utilities: $143.15

Median rental cost: $640

Average home price (2,400 sq. foot, 4 bedrooms/2+ bathrooms): $240,000

"When Memphis showed up in the list, I was really surprised," says Frutiger. "Memphis is a major city." 

Price of T-bone steak: $8.82

Cost of orange juice: $3.27

Average monthly utilities: $134.40

Median rental cost: $705

Average home price (2,400 sq. foot, 4 bedrooms/2+ bathrooms): $198,268

By Business Insider

Photo: Flickr / MiiiSH

Most of the cities on this list, like Fayetteville, are rather small. So are the low-prices a byproduct of a smaller population? Not exactly, says Frutiger.

"Though some of the cheaper cities do have a population issue—more people means more demand and higher prices—[COLI] does have a population requirement. Not just anyone can participate in the Cost of Living Index." 

Price of T-bone steak: $9.96

Cost of orange juice: $3.23

Average monthly utilities: $142.94

Median rental cost: $551

Average home price (2,400 sq. foot, 4 bedrooms/2+ bathrooms): $241,400

By Business Insider

Photo: Doug Wertman, flickr.com

Price of T-bone steak: $9.48

Cost of orange juice: $3.07

Average monthly utilities: $144.83

Median rental cost: $657

Average home price (2,400 sq. foot, 4 bedrooms/2+ bathrooms): $230,439

By Business Insider

Price of T-bone steak: $9.65

Cost of orange juice: $3.22

Average monthly utilities: $145.45

Median rental cost: $516

Average home price (2,400 sq. foot, 4 bedrooms/2+ bathrooms): $206,667

By Business Insider

Photo: jilly~bean, Flickr.com

"Housing prices are very low in Texas, even in the major cities. Houston, Dallas ... Housing there is relatively inexpensive," Frutiger says.

"A lot of it, too, is the housing size. Two thousand and four hundred square feet in New York is a mansion, but in Texas it's a closet."

Price of T-bone steak: $9.49

Cost of orange juice: $2.98

Average monthly utilities: $167.73

Median rental cost: $749

Average home price (2,400 sq. foot, 4 bedrooms/2+ bathrooms): $213,850

By Business Insider

Frutiger adds, "You're looking at houses in Texas that are way bigger than anything you'll get in a large Northeastern city, and for a relatively cheaper per square foot price." 

Price of T-bone steak: $6.98

Cost of orange juice: $3.08

Average monthly utilities: $145.80

Median rental cost: $565

Average home price (2,400 sq. foot, 4 bedrooms/2+ bathrooms): $264,000

By Business Insider

"Every time we release this data, Harlingen makes the news," the economist says with a chuckle, "and the people love it."

In Manhattan, the most expensive U.S. city right now, rent is $2,905 more each month than in Harlingen. 

Even a tube of toothpaste costs $1.73 more in Manhattan.

Price of T-bone steak: $8.14

Cost of orange juice: $2.98

Average monthly utilities: $158.65

Median rental cost: $642

Average home price (2,400 sq. foot, 4 bedrooms/2+ bathrooms): $221,486

By Business Insider

Photo: Sadie Hernandez, Flickr.com

Read Full Story