#219: Moving In, Moving On, Moving Up (Friday, March 11)

This week I got a couple questions on moving in from different people in different situations: one was looking for a roommate, the other was thinking of moving in with her boyfriend.

Moving in with a roommate or a significant other can save you money, but if you're not careful, it could also cost you big in the long run. What if your roommate loses his/her job and can't afford to pay the rent? Or what if their credit isn't good? Or what if they decide to move out early and your name is on the lease? I know firsthand about the potential financial woes that could come with having a roommate. A similar situation cost me a friendship and put a nasty blotch on my credit which it took nearly five years to clear. But moving in can be a great financial decision, if you know how to play it smart:

Moving in With A Significant Other

• DON'T completely merge all your finances with a significant other until you're married.
• DO split bills and rent equitably, based upon your income. For example, if one person makes $2,000/mth and the other makes $4,000/mth, use percentage of income when calculating bills.
• DO discuss the goal of moving in: is it just to save money or is it in preparation for marriage?
• DO discuss spending habits and attitudes about money, as well as future financial goals.

Moving in With A Roommate

• DO draft a roommate agreement that outlines the course of action that will be taken if a roommate defaults on the rent, any of the bills or decides to leave early.
• DO try to find an apartment with utilities included so there is only one bill to split.
• DON'T put all the bills in your name. Either put both names on the bills or alternate bill responsibility (put your name on the gas, and your roommate's name on the electricity).
• DON'T share grocery bills. Although it can work out, it usually creates more of a hassle than it's worth (are you really going to keep track of who drank most of the milk?)
• DO get a credit check of your potential roommate and also agree to provide one. If someone has a history of non-payment or late payments, they may the same way when it comes to paying rent and bills.
• DO try to negotiate separate lease agreements with your landlord, so that if your roommate leaves, you won't be responsible for the rent.
• DO create a pool (each contribute $50/month) for shared expenses (toilet paper, common area furnishings, etc.)