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How Does Living Together Affect Your Finances?

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So far in our Money Mic series, we’ve debated whether the CARD Act hurts women and how homesteading is the new financially-savvy feminist option. This time, we asked two writers to tell us their views on whether it makes sense—financially, of course—to move in with your significant other long before marriage. Their reasoning might surprise you.

Cohabitation Will Help Your Finances
When my aunt moved in with her boyfriend in 1988, it caused quite a stir in our family. The perception was that she was “giving up the milk for free” and must be on the losing end of the equation. In fact, however, living with your significant other can be a winning formula for both parties.

Living Together for Money: A Growing Trend
Over 7.5 million unmarried couples lived together in 2010, a number that the U.S. Census surmises jumped due to the recession. This is backed up by the fact that the partners in these newly cohabiting relationships are less likely to both hold jobs.

The decision to move in with your significant other should obviously be based on love, but that doesn’t mean we should ignore the fact that, when done right, it can also be a financial boon.

When my sweetheart and I moved in together, our joint housing costs decreased by almost half. I’ve also been able to save more toward retirement, and the fact that we both care about our joint financial health has drawn us closer as a couple. Witnessing my boyfriend’s financial decisions shows me where he places value and helps me feel comfortable about our financial future together.

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Cohabitation Will Ruin Your Finances
First off, let me say that I have no moral qualms about cohabiting: No “Why would he buy the cow …?” arguments here. In fact, I lived with my ex-boyfriend through most of my twenties before we finally broke up—which is why I would never move in with someone again, unless I was certain I was going to spend the rest of my life with him.Why? We’ve all done the back-of-the-napkin math, and, when you do, living together can look seductive. Half the rent! Half the utilities! With the added fun of playing house.I get it—that’s why I did it. And in the short-term, I agree: Living together can look like a good deal. But in the end, it can turn out to be ugly, financially and emotionally. In the long-term, shacking up can cost you far more than any savings you rack up. And don’t just take it from me.

The Financial Perils of Playing House
“I moved in with my boyfriend mainly because I was tired of commuting to Brooklyn,” says Sarah*, 24. “But I did only pay $700 a month. So that was a perk.” In six months, she’d saved $4,900, as compared to living in her old apartment.

Then, just six months in, the relationship ended. All of a sudden, Sarah needed somewhere to live—and fast. She paid for movers ($300), for storage ($100) and for a real estate broker to find her a new place ($1,800). And now that she’s got one, she’s faced with refurnishing: “I have to buy all new furniture because I got rid of it all when I moved in with him,” she says. “I don’t even want to think about how much that will cost.”

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-- Learnvest