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Someone has to be the treasurer of your relationship.

You fell in love, moved in together … now, who should pay for what? Navigating finances as a cohabitating unmarried couple is one of the biggest strains on a relationship, but doing it correctly can be a predictor of whether it’ll last.

Couples are notoriously poor about discussing their individual finances. Instead, they save those conversations for after they’ve moved in together. That means they keep separate bank accounts and have little knowledge of each other’s debt.

“People tend not to think about their finances as a couple, but think about them in individual terms,” said Brad Wilcox, director of the National Marriage Project at the University of Virginia.

That may make sense short term, he said, but long term it can become problematic — especially since more and more couples share a home, but don’t tie the knot. Over the past two decades, the number of couples who live together, unmarried, has nearly doubled in many countries including the US, United Kingdom and other European nations. In Sweden, the majority of couples cohabitate, marrying only after they have children.

“Many couples slide into a cohabiting relationship without discussing what it means” to them financially, says Galena Rhoades, a marriage researcher and associate professor at the University of Denver in Colorado.

To split costs or not

Most cohabitating couples divide expenses down the middle, Wilcox said. But that can be a problem when one half of the couple earns more than the other. The lower wage earner may feel the need to spend more to keep up with their partner and, as a result, save less or repeatedly dip into savings accounts to keep up. Not addressing a wage discrepancy “can create resentment,” Wilcox said.

To keep finances fair, Jamie Seaman, a New York-based medical device sales representative, said she and her boyfriend split rent, utilities and big purchases based on their earnings. Seaman pays 40% of expenses, she said. The couple uses a spreadsheet to track purchases over $100. The system, managed by Seaman’s boyfriend, offers the couple transparency when it comes to who owes what.

“Someone has to be the treasurer of your relationship,” she said.

For most people, Wilcox recommends maintaining separate bank accounts while also opening a joint account used to pay common bills. That creates “a shared liability and a private zone,” Wilcox said. The higher wage earner should pay a larger share of the bills. Over time, cohabitating couples should start to naturally pool more of their money together to save for things like vacations or furniture.

Dealing with ghosts of money past

Being forthright about debt from previous purchases, loans or credit cards can be the biggest hurdle when couples first start to mingle finances. Setting clear expectations is also important. For example, will paying rent mean part ownership if you move in with your partner and he holds a mortgage on the house you now both live in?

“If, for the next five to seven years, you [fund] the mortgage and you have no equity, that’s something that would concern me,” said Gary Shor, a vice president of financial and estate planning at AEPG Wealth Strategies in Warren, New Jersey.

Disclose any big debts you have, too. Be honest about your obligations.

Get it in writing

Financial experts suggest a “no-nup” or pre-cohabitation agreement for those in the UK, US and most parts of Europe. These function in the same way as a prenuptial agreement and can be drawn up by a lawyer for about $1500. A customisable template is available for free at sites including rocketlawyer.com.

If a no-nup isn’t appealing, attorney Frederick Hertz, author of Living Together: A Legal Guide for Unmarried Couples, recommends getting everything in writing, even a simple email, which is then agreed to by both partners in emailed responses.

“In an absence of an agreement, neither will have any rights if they break up,” Hertz said.

Keep evidence of leases, investments and large purchases, whether they’re purchased by one person or both. While it can take weeks to draft a contract or even an email agreement, “the process should strengthen your relationship,” said Hertz. “Lack of clarity is harmful.”

Common finances mean happiness?

Studies show that combining finances before marriage can be a positive for the relationship, said Rhoades — although perhaps not for the most romantic reasons. When you don’t intermingle funds, it is far easier for one person to simply leave the relationship without as much thought about what disentanglement could mean, she said.

“They have already set up that exit plan,” Rhoades said.

But there’s also a happy medium for some couples — a shared budgeting process. Tyler Felous, a co-founder of a financial start-up, said he and his girlfriend have come up with a joint budget that they manage together. It helps them understand each other’s financial goals. To keep costs down, the Ann Arbor, Michigan, couple agree to spend no more than $300 on dining out and $600 on groceries per month. Felous, 25, and his girlfriend also keep a monthly tally sheet to make sure they are on track with their spending.

“It’s helped us understand how we will coexist once we get married,” he said.

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