You're In Love....And Risking Your Money

    You're in love. You're spending every night together. Except for paying on two different apartments, you are practically living together. So you ask yourself, "Why not just take the next step?" According to a 2000 study published in the Annual Review of Sociology, 55 percent of all cohabitating couples got married in five years' time, and the other 40 percent broke up.  And of course, those who got married faced the same divorce statistics as other couple. Every couple who lives together is taking certain risks – legal and financial and emotional. But you can protect yourself, no matter what happens.

1. Talk about money.
When you're in the early stages of a relationship, most partners don't want to talk about money. Whether someone's trying to hide what they make or wants to appear to be well off when they may not be, money is a topic most couples don't talk about.  Discuss and disclose your assets and your debts. You may find out something about the person that keeps you from going further – and keeps you from a financial disaster.

2. Consider a cohabitation agreement.
This is like a pre-nup for married couple. It is a legally binding agreement about what will happen if your relationship doesn't last. It can cover mortgages, debts and even who gets the cat. You should do this before you move in together. A high-net-worth individual living with a low-earner, someone who gives up a job or other opportunities or partners who buy a house together should consider these agreements.

3. Don't tie yourself up financially for a while.  
Don't be in a hurry to go into business or buy a house with your new partner. Moving in together is a change that can be difficult to get used to. Before you commit financially, give your relationship at least a year before making any major investments together.  

4. Keep your own place.
This may not be financially possible, but it can be helpful. Consider subletting the place you live in now. If it doesn't work out, this can ease a difficult situation in the long run, particularly if children from previous relationships are involved in the arrangement.

5. Protect yourself if you've got some cash.
If you've got assets, you have to maintain good boundaries. Keep your finances separate and make it clear that cohabitating is not a promise of lifetime support. And see an attorney to safeguard your rights.