Financial Literacy
For Your Future



Should I Commingle Assets with a Companion?

This story revolves around the notion that two people can live as cheaply as one and therefore, smart people should partner up and live together. Like so many rules of thumb or accepted notions some parts are true and some not so much. In addition, the level of acceptability of these notions is people specific. They fit some people and situations well and others very little or not at all. Consequently, everyone one needs to answer the question regarding commingling of assets for themselves. The question, like so many, is also relative in nature. In other words, when considering the best answer for the question for you and your companion, remember that it is not necessarily whether but how much commingling is good. The specifics in this relationship may help identify both the expected benefits and costs of commingling certain items.

You have known your potential live-in companion for several years. The person seems very trust worthy and you get along well. Although you have had few disagreements, all of them that you have had have been resolved quickly and without hostility. Basically, your view of the potential living arrangements seem positive and you think it will be efficient and fun. From an efficiency perspective, you both bring many valuables to the table. Your friend has a lot of furniture and you have a relatively new car. The place you are looking at to live is $200 less per month than the total of the two rents currently being spent by the two of you. Just think of all that food you just throw away because few meals are designed for just one person. The list of possible benefits seems endless so it is time to get specific and think about the particulars. Your list includes the following:

  • Who signs the rental agreement?
  • Is the rental insurance in both your names?
  • Do you need to add your companion to your car insurance policy?
  • Do you have separate bank accounts or will you commingle your finances?
  • Do you split the utility bills?
  • If you need a durable good (appliance, television, furniture) do you buy on credit using both of your names?
  • Who pays the bills if someone gets sick or looses their income?
  • How will things be divided if and when you go your separate ways?
  • Should the final agreement be put in writing and checked by a lawyer?

SO DO YOU CO-MINGLE YOUR ASSETS? The list does go on but this is a good start to employ the decision making guide together. This is one of the few times that the guide should be used collectively from the beginning. You still should seek peer review after your initial decisions have been made, however, because new insights from others could remind you of things you missed. Note that several items listed and probably many more have a legal aspect associated with them. Consequently, it is helpful to seek some legal advice on the specifics of the co-mingling question.

Applications Insights Guide - click here for facts to aid your decision making process


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