When it comes to moving in together, there is a lot more to consider than whether you are emotionally ready for the commitment… You also have to look at these financial implications to establish what effect shacking up will have on your wallet.

Meet Harry, a 30-year old call centre agent for a well-known insurance company based in Midrand. After much hassle convincing his mom and siblings that moving closer to work is a good idea for him, Harry moved from his hood (and family) in Soweto to Fourways three years ago. Now, after two years of dating, he wants his girlfriend, Mpho, to move in with him. After all, she has been spending loads of time at his place anyway, so this move seems natural.

Like the cent-savvy guy that Harry is, however, he’s considering the financial implications of shacking up in comparison to staying solo and he has come to realise the following:

It’s not as simple as it seems

While moving in together might seem like the “natural next step”, it can also complicate matters…  Not only does Harry have to ask himself if he can live with Mpho in his space, gracefully dealing with her nasty little habits (like leaving the bathroom in a mess in the mornings or using a different utensil for every step in the cooking process), but he also needs to figure out how this cohabitation-situation will work.

Questions like “who will pay for what?”, “what if it doesn’t work out?” and “how can I best protect myself, both emotionally and financially, from the risks associated with taking this step?” race through Harry’s mind. And he has done lots of research and introspection to come up with the best possible scenario for both him and Mpho.

Myth-busting

You read it in magazines and hear it from your friends all the time, having one crib is “more cost-effective” than each person in the relationship living on their own, travelling to visit each other constantly and buying spares (think toothbrush) or paying for duplicates (think one housekeeper instead of two), but depending on your current living situation, this may not be true…

Harry has a small apartment with one bedroom, one bathroom and a teeny-tiny “study” (more like a walk-in closet) in Fourways. It’s got enough space for him and really has served its purpose as a starter-house well. Realistically, however, it’s probably going to be tough to squeeze a second person into the place. Most of the cupboard space is already in use and there’s not a lot of room for extra storage like chests and drawers either. What’s more, until now Mpho has lived with her family. She has hardly been paying rent and has only made small contributions to groceries as and when she needs to.

If they are serious about moving in together, they’ll probably have to get a bigger place than Harry’s and they may have to move closer to Sandton (where Mpho works), which could end up costing quite a bit more.

Yay or nay

Ever since Harry had the idea of asking Mpho to move in with him, he has been researching his options and asking friends and family for tips about the best financially-smart ways to shack up. This has led him to the following conclusions…

Some of the financial advantages to shacking up include:

  • If you opt to split the bills, you’ll be saving on day-to-day costs such as electricity bills, DSTV and home insurance
  • Commuting to visit each other is no longer necessary, saving you transport costs and time too
  • Living together means car-pooling to and from work could become a viable option and driving to events and commitments together in one car becomes convenient
  • You save on airtime or data for Skype and WhatsApp calls as your daily 30-minute long catch-up calls will now be replaced with after-work coffee chats at your home
  • No more paying rent and insurance for two separate residences, as a couple who is living together you’ll only need to pay for one home

Common financial pitfalls of shacking up include:

  • Make sure that your financial philosophies are aligned. The last thing you want is to be paying off debt on behalf of your partner or covering expenses that your partner should be responsible for
  • Talk about your shared and individual financial goals to prevent misunderstandings and disputes about money later on
  • Often when people move in together they decide to go the full nine yards and consolidate their finances, this is a decision of great financial magnitude and should be discussed and considered with great caution
  • Dealing with death becomes more difficult, financially… Unless stipulated in your partner’s will, you will not be entitled to any of his or her possessions or money and if, for example, your shared home’s rental agreement is in your partner’s name, that will be null and void too

First things first

Before they pick a place to stay, however, Harry and Mpho will need to agree on a couple of important things…

Unlike marriage which is regulated by specific laws, cohabitation is not recognised as a legal relationship in the eyes of the South African law. This means that there is no legislation regulating your rights or duties when you enter into cohabitation or start living with your partner.

Harry knows that, even though he doesn’t anticipate his relationship with Mpho ending, it is best to set up a cohabitation agreement stipulating what each party is responsible for as well as what each party owns. This helps protect both of them and will help them divide the responsibilities and property if they ever have to.

He recognises that even though drafting a document like this is not exactly romantic, being prudent and careful while keeping each person’s best interests at the top of the agenda from the start is a great foundation for the future success of the relationship.

Once Harry and Mpho have found a place that they would like to stay in together, they’ve agreed to split the home loan and house insurance costs. To come up with her share of the funds, Mpho will be applying for a personal loan. With the funds in place and the perfect little starter-home waiting, Harry and Mpho are set to start their fairy tale and live happily ever after…