You’ve agreed to be exclusive and dropped the L word. Now it’s time to pop the question.
No, not that question.
“Will you move in with me?”
Becoming roomies reveals a lot about your bae’s habits and lifestyle, which gives you a chance to better gauge your compatibility. Do they do their share of the housework? Are you able to resolve disagreements peacefully?
But many twosomes forget to think about the financial ramifications of cohabitation (beyond saving money on rent and utilities). In fact, one Haven Life survey found that only 1 in 3 couples discuss money before playing house. That’s a mistake that can sabotage your relationship—and your bank account.
So hold off on hiring the movers until you get financially woke, thanks to these four expert tips.
Chances are, you and your sig other talk about everything from your political views to your sex lives. But we’re guessing money conversations are largely off the table—a recent survey from Capital Group found that people rank finances as the most taboo subject out there.
“Money is a deep-seated emotional topic, but we’ve been socialized not to talk about it,” says Kristy Archuleta, editor of the Journal of Financial Therapy and a professor at the University of Georgia. “All we see on the surface is how our partner behaves with money—for example, overspending or not saving.”
Not only does research imply that suppressing emotions increases stress and inhibits relationship bonding, but this shroud of secrecy leads to financial deceptions like hidden debt, spending lies, and secret accounts. Unsurprisingly, more than three-quarters of people who have experienced a betrayal say it has damaged their relationship, according to a report from the National Endowment for Financial Education.
So knock down the walls with a weekly financial check-in. Archuleta recommends setting up a money conversation jar, where you each write down a bunch of questions and pop them into a jar. Sample ideas to kick things off: What are your financial goals (in one year, five years, and so on)? How did your parents handle money—and what financial lessons did you learn from them?
Set a date once a week to draw a question and discuss it. “Talking about money upfront may not head off all of your arguments, but it will help you identify issues that you can work through together,” Archuleta says.
First, evaluate what you can afford for your new place. “You should put a maximum of 30% of your combined take-home pay toward a mortgage or rent payment,” says Cristina Behrens, a certified financial planner and CEO of Mana Financial Life Design in Marina Del Ray, California. (Of course, moving in together is also a great opportunity to cut back on rent, and put that cash toward other goals.)
Next, work through other shared costs, like utilities and groceries. “Go through the last three months of credit card and bank statements, and calculate how much you each spend on living essentials,” Behrens says.
Then, discuss a fair way to pitch in—whether you’ll split each expense 50/50 or divvy them up, so that one of you covers rent, while the other takes care of, say, food and car insurance. (According to Behrens, most couples opt for the latter approach.)
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Although millennials are less likely than older generations to open joint accounts, couples who mesh their money experience greater relationship satisfaction and responsible spending habits. So it’s worth thinking about. (You can read up on some strategies to combine finances, here.)
For those shared expenses, “set up a joint savings account at a high-yield online bank and arrange to have automatic withdrawals sent from each of your paychecks,” Behrens says.
It’s the elephant in the room: What if you two break up?
To protect yourself, make sure both of your names are on the lease, otherwise it puts all the fiscal accountability on one partner. “A lease usually states that the liability is joint—meaning if one of you moves out and stops paying, the other party is financially responsible,” says Neil Garfinkel, partner with AGMB Law in New York City. “You need to have a clear agreement so that you’re not left holding the bag.”
Read the fine print to find out what the penalties of breaking your lease are, and then have a conversation about what will happen if you decide to part ways. For example, “If we break up, we will continue paying our respective portions of the lease until the end of the term.” Put that arrangement in writing.
Behrens also suggests jotting down what she calls a domestic partnership agreement. “Create a document outlining how much you each contribute to your joint savings accounts, and sign it,” she says. “It might seem a little scary, but it’s basically an informal agreement that shows you’re both on the same page.”