Stuck living with your ex? Make these money moves now

by Brian Acton
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Stuck living with your ex? Make these money moves now

There are reasons to continue living with your ex after a breakup. Perhaps neither of you can afford your home on your own, or the coronavirus has put a temporary pause in your moving plans. Or maybe you both need time to save up some money.

Whether the breakup was amicable or contentious, you need to make your living situation work until you and your ex can truly separate. That includes money. It’s a good idea to focus on separating your finances from your ex and setting yourself up for a future without them.

Here are money moves to make when you’re stuck living with your ex.

1. Read your rental agreement

If you and your ex rent together, it’s worth checking to see how you could get out of your lease. Many leases can be broken, but there could be financial penalties like losing your security deposit or paying an early termination fee. Details vary by lease and rental laws vary by state.

If you’re living together for financial reasons, breaking your lease might not be an option. But your landlord may be willing to negotiate, especially if you took good care of the property and always paid your rent on time.

If you and your ex own your home together, splitting up your property will be more complicated and may require legal assistance.

2. Separate your accounts

Separating shared accounts can protect you from a vengeful ex emptying your account or racking up too much debt. It also helps you establish financial independence and makes it easier to move out.

“If you are broken up but still living together, I recommend keeping your finances completely separate from your ex. That means you should each have your own bank account(s),” said Leah Hadley, founder of Great Lakes Divorce Financial Solutions.

Make a list of all joint accounts and their current balances. Decide how to split them up. The easiest solution could be dividing funds 50/50, but that may not be feasible if an account contains legally protected funds (like inheritances) or if one person contributed a greater share of the funds. (Note: If you and your ex are getting a divorce, consider opening your own accounts. But understand assets will be formally split up during divorce proceedings.)

"Another way to handle expenses is to have a joint bank account just for household expenses that you each contribute to," said Hadley. "Keep in mind that there does need to be a high level of trust to share an account because you both would be able to withdraw funds from the account."

Closing joint credit cards is more of a hassle if you carry a balance, because the debt belongs to both of you. The best strategy is to work together to pay off the debt, then close the card or remove someone as a user. (Remember closing credit cards or removing yourself as a user can have a negative impact on your credit, as it affects your credit utilization rate).

3. Split the bills

Maintain an arrangement to split mutual expenses, like bills or subscription fees. Ideally you’ll be able to continue whatever agreement was working prior to your breakup, but you should sit down with your ex and come up with a plan.

“For example, you might decide that one party is responsible for the gas bill while the other is responsible for the electric bill,” said Hadley. “Alternatively, you can split each individual bill. This could be a 50-50 divide or if one of you makes significantly more money than the other, you might decide to split it relative to how much income you bring in.”

It may be tough to split expenses if you or your ex are struggling financially. Prioritize bills, reduce spending and cancel unnecessary expenses, like gym memberships or subscription services, to shore up extra funds.

Verify the bills are getting paid. You don’t want to be surprised by late payments or services getting shut off (and missed payments in your name can do serious damage to your credit).

“I encourage people to have a written document regarding how various expenses will be handled. It doesn't have to be anything formal but it's something that you can both reference regarding what you agreed to,” said Hadley.

4. Create your own budget

Everyone needs a budget to ensure they’re living within their means, but a spending plan is even more crucial in times of financial difficulty. If you and your ex had a shared budget, create your own budget that accounts for your individual income and expenses.

Don’t already have one? You can create a budget using a simple spreadsheet that accounts for your income and monthly expenses.

Make sure to dedicate some of your budget to savings, as moving out (or furnishing a home after your ex takes all their stuff) can be very expensive. Savings can also help you establish financial independence in your new, single life.

5. Have an exit plan

Circumstances outside of your control may have stuck you with your ex, but you should still you come up with an exit plan. Consider the following:

  • When can you or your ex move out? If you rent together, when does your lease expire?
  • What needs to happen before you or your ex move? What can you start working on now?
  • If you’re planning to move, where do you want to live? Can you start a preliminary search for a home now and narrow down your options?
  • What is your budget for living on your own? Do you want to live with roommates to cut down on costs?
  • How much money do you need to move? Create a moving budget so you know how much to save.

Depending on how things are going with your ex, you may or may not want to share your exit strategy with them. You could even help them set up their own exit plan so you can both move on with your lives as soon as possible.

Breaking up is hard for everyone — and it becomes much more complicated when you’re married. Check out our guide to preparing your money for a divorce.

Image: Nastia Kobzarenko