Financial tips for young unmarried couples

Many young couples choose not to get married for personal, financial or family reasons, believing it will simplify their lives. But they don't have the legal protections that cover their married counterparts. Garrett says there are about 1,140 federal laws that apply to married folks but not to unmarried couples. Then comes state law establishing community property and inheritance.

Sometimes living together is a trial marriage, especially among young couples. Some researchers say 53 percent of women's first marriages are preceded by co-habitation.

"Most of us have been in a committed relationship when we were young, but often it wasn't with the person we married," Garrett says.

If you're about to embark on your first live-in relationship, keep the finances simple. In addition to splitting the rent 50-50, each partner should kick in another $250 or so a month to cover household expenses such as utilities, groceries as well as basic phone and Internet service. It might be wise to set up a joint checking account for household expenses. Establish it as joint tenants in common so if one of you dies, that person's share goes to family rather than your roommate. If you later split, divide the money in the joint checking account 50-50 after paying all final expenses. For basic information on joint checking accounts, go to the Web sites of major banks, including Wells Fargo, Bank of America or JPMorgan Chase.

But at this stage in your life, keep all credit, savings, brokerage and retirement accounts separate. There is simply no need to merge such accounts at this point.

Don't buy a car together. If one of you gets sued after an accident, both could be on the hook if the car is jointly owned. Keep auto insurance separate, too, but check on coverage if you partner occasionally drives your car.

"Sometimes, vehicles last longer than relationships," says Garrett, who wrote the book with Debra A. Neiman.

Personal expenses such as the health club, golf, tennis lessons, cell phone, CDs, overseas phone calls and, obviously, clothes should be the sole responsibility of the individual who incurs them. Make that clear in your agreement. Going out to dinner and a movie is a snap: Take turns going Dutch.

It's OK to buy small kitchen items and household goods jointly, but larger items, such as artwork, large-screen TVs or antiques should be clearly marked. Include a paragraph in the domestic-partner agreement stating who bought what and who will retain it if the relationship ends.

Breaking off a relationship is never easy and you don't want to destroy the fond memories by bickering over money and household goods. A clear, concise agreement will help avoid arguments if the relationship ends.

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