Dear Carrie, I'm 34 and thinking of moving in with my boyfriend. We're committed to each other and both want children, but we don't plan to get married. From a financial point of view, what do we need to know? --A Reader
Dear Reader, It's good that you're asking this question now, before moving in together. A committed emotional relationship soon evolves into a financial relationship as you start to share the costs and concerns of everyday life, whether you're married or not.
However, handling day-to-day living expenses is the simple part. It's when you get into things like large purchases, buying a home, insurance, retirement and estate planning that it gets more complicated. And let's be honest -- many of the financial concerns have to do with what happens if you break up.
There's no clearly defined legal structure for the division of property for unmarried couples. So it's up to the two of you to figure out what's fair to you both and create some guidelines, realizing that as your relationship grows, your decisions may evolve. I think it's best to start with some honest discussion, a commitment to complete disclosure and a look to the future.
Consider a domestic partnership agreement
To help keep money misunderstandings to a minimum, I always suggest putting things in writing. A domestic partnership or cohabitation agreement is like a prenuptial agreement. It specifies roles and responsibilities, what you'll share, what you'll keep separate and how assets will be distributed should your relationship end.
You don't need a lawyer to do this. The important thing is that you agree on what's fair now -- and write down your agreements -- to hopefully avoid problems later.
Decide what you'll share-and what you won't
Moving in together doesn't necessitate complete financial togetherness. A "yours, mine and ours" approach is often the best and fairest. Start by deciding which expenses you'll share (for example, rent, groceries, utilities, joint entertainment and travel), and which you'll pay for separately (such as clothes, individual car expenses, haircuts and solo entertainment).
If one of you makes more money than the other, the higher earner would contribute more to the communal pot. That way, you can each have a fair amount of money for discretionary spending.
To keep things simple, maintain your own checking and savings accounts, as well as credit cards. Open a joint account for shared expenses and possibly a joint savings account for mutual goals.
Agree on big-ticket purchases