Move In With Your Partner: The financial steps

move-in-money-coupleTALK ABOUT MONEY FROM THE START

By: Michelle

A couple of weeks ago a friend of mine asked me a question: “Should I move in with my boyfriend?”

Normally, I’m one to shell out advice in a matter of seconds, but this one had me a bit boggled.

Moving in with a boyfriend or girlfriend can be quite a big leap for the relationship, and moving in too soon could have major ramifications both emotionally and financially.

 

Move In Ready Conversations

 

I’m a bit of a narcissist when it comes to love and relationships. I believe that the stars have to do more than just be in line for it to be “the right time.” Each person has to chip in and make some major steps- and that is especially true when it comes to getting financials ready for the big move in date.

The first major step is to reveal your finances. Move in without knowing what’s in your partner’s pocketbook? HECK NO. While exchanging credit reports takes away the fun of it, a couple should be comfortable enough to sit down and hash out debts.

If one person rebels or squirms away, that move in date should be pushed far back until that person can be mature enough to discuss money with the other.

I also believe that this conversation should also include a major discussion on future financial goals. If you’re going to move in, I’m assuming that this relationship is going to be long-term and perhaps lead to marriage (if that’s your thing), so both partners should be comfortable with where the other is heading financially.

Living frugal your thing? Got old episodes of Lifestyles of the Rich and Famous tivo’ed for inspiration? Not knowing how your partner plans to spend and save could mean pretty pennies and tons of fights down the road.

Speaking of fights, did you know that the majority of divorces end because of money issues? I cannot say it enough that getting yourself on the same money path early before making the step to move in is absolutely essential in setting up good habits for a healthy long-term relationship.

 

Move In Your Money

 

Ok. So your suitcases are packed. You signed up for mail forwarding. And your boxes of kitchen items are securely on the moving truck. But what about your money? Where is that headed? One of the most difficult steps in the move in process is deciding how money will be handled in your new, two-person home.

My friend (let’s call her M) is a perfect example of a 20-something moving in. Working two jobs, M has a good amount of income coming in for her age bracket.

She also has a savings account in which she is working to create an emergency savings. M’s beloved is in the same boat as well, but is doing better. He makes about double what she does, owns the home M would be moving in to, and has an established emergency fund and investments.

How should M and her boyfriend split up expenses? There are typically two trains of thoughts. The first one would have M and her man split up expenses evenly regardless of income or savings. The second would have M pay less considering her partner’s significant income.

There really is no right or wrong answer here. Every partnership will be different. The best way to do this is for the primary or former bill payer to lay out every home related expense (including estimating an uptick in grocery costs) and then calculate what half of that amount would be.

If the person making less money cannot afford or feel comfortable paying it, then perhaps this is the time for the other person step in and make up the difference.

 

Share the wealth?

 

Ok. So now you know where your money is going, but what about our money? There is a great deal of trust involved in combining finances.

If after all of your money discussions, you feel that the person is not in line with your money goals, I highly recommend NOT combining finances. If, however, both of you share the same goals (both in the relationship and for your pocketbooks), it’s great to start the conversation.

As long as both of the partners have a healthy relationship with money and have discussed marriage (or the alternatives to it), I advise starting with a small, shared checking account.

This account could be set up for each person to contribute to. Maybe it’s for splitting the cost of the lease and utilities or an entertainment fund for nights out on the town- either way, both parties should come in with the understanding that it is a shared account with each person having equal rights and responsibilities to it.

In order to protect themselves, a lot of partners have begun creating contracts for their partner. This contract covers what happens if/when a breakup occurs.

I tend to think contracts like this are impersonal and can create more problems than they are worth. If you really cannot trust your partner to leave the new couch and the shared bank account alone if you were to break up, then why move in to begin with?

 

Where you move in, debt will follow

 

At this point, all of my personal finance blogging friends (and my dad) are probably screaming: “WHAT ABOUT YOUR DEBT!?!” Don’t worry. I’m not forgetting this major rock in the move in suitcase. I want to keep this part short because I believe in one thing and one thing only:

YOUR DEBT IS YOUR DEBT. WHATEVER YOU AQUIRED PRE-RELATIONSHIP SHOULD REMAIN YOURS UNTIL MARRIAGE.

That’s right. Whatever you do, whomever you move in with- your debt pre-move in should not be touched by the other partner until you have committed to marriage (except if he or she is an insanely rich sugar daddy/mamma… then we’ll talk). Please take this advice from experience.

Having your richer partner pay for your car bill, medical statement, or student loan debt is going to harbor resentment or “you owe me!” conversations down the line. Yes, you or your partner may want to chip in out of love or concern, but keep your debt business out of the relationship until you have gotten down on one knee.

Debt should be talked about with honesty and compassion towards one another (that was step 1). And, in the case of M and her boyfriend, it was the deciding factor in how to split up home expenses.

Because M had a car and student loan, her boyfriend graciously decided to step in and pay more of the mortgage costs. M will be responsible for the smaller home costs like the electric and gas bill. She will also do a bit more cleaning and organizing around the house to chip in.

 

Make the leap to move in

 

In the case of M and her boyfriend, the move in process was relatively painless. They were honest and fair in their financial decisions regarding their new home, and they both continue to work on their respective debts with the support of the other.

This whole process took several weeks, but both can attest that making the decision to move in shouldn’t be based on guts or stars. Instead, it should be made on trust and respect for the past, present, and future financial and emotional goals of both people.

 

Post Contribution By:

Michelle blogs for Fit is the New Poor. While her husband is unemployed, she writes about getting on the track to financial freedom by slimming down debt and working out assets. You can also follow her on Twitter

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Mr. CBB
I’m from the UK and now a recent permanent resident in Canada. I bought my first house at the age of 21 after University then my second at the age of 24. I’ve always been fascinated with personal finance, savings, learning to make money and watch it grow while combating debts along the way. Canadian Budget Binder is a place where I get to share my experiences with personal finance and learn about yours along the way. I hope you stick around and check me out on Twitter, Facebook and Pinterest where I am active on all social media sites. Cheers, Mr.CBB
Mr. CBB
Mr. CBB

Comments

  1. Not to mention the major adjustment period. Seeing each other so much more frequently and the lack of personal time can definitely add friction. If you are a stress-spender, be prepared to keep your purse strings tight because the first couple of months can be very stress filled while you feel out each others habits. Many people have nighttime or morning routines that might not mesh with yours. Don’t sweat it! Over time you will begin to work around each other and develop systems that work for both of you. Don’t give in to the urge to de-stress by spending money! It’ll only make things more stressful.

  2. I agree with keeping debt separate. You never know whats going to happen so debt should be kept apart as well. It makes things easier that way.
    Debt and the Girl recently posted…Gif Parade Time: Holiday Nuttiness EditionMy Profile

  3. Money is such an important thing ot figure out before you move in together… and understanding that how you approach it will likely change over time is also important.
    A friend of mine had the rest of her student loan paid for by her now-spouse and really struggled with letting him pay off her loans for her and treat them all as “ours” instead of just hers.
    Anne @ Unique Gifter recently posted…Baking Mixes in Mason Jars as Holiday GiftsMy Profile

  4. Great post, Michelle! It is so important to talk finances before moving in with anyone. As you said, an unwillingness to do so raises a huge red flag. Plus, I am a huge proponent of clear communication so everyone knows what they are getting into (maybe one has significant debt) and mutually agrees how they will handle finances. Oddly enough, this is the skip so many people skip. They are uncomfortable talking about their finances so they don’t get down to the nuts and bolts who will pay what. Eventually hurt feelings happen and things snowball from there. I’m glad everything worked out well for your friend!
    Shannon @ The Heavy Purse recently posted…Giving and Gratitude Make Christmas Truly MagicalMy Profile

  5. I think it’s really important to know how you will split up the bills and housework. It can be adjustment when you first move in together and you find things out, work things out as you go. Me and my partner are solely responsible for our own student loan debt. I don’t account for his when I do my posts, because we keep thing separate. It works for us and our hope is to both make more money one day, so we can help each other with living expenses to focus on our student loan debt.
    Dear Debt recently posted…This weather is messing up my budgetMy Profile

  6. Nice post. This is something I’ll be facing next year so the ideas here will certainly come in handy then. I don’t think expenses will ever be split evenly considering income levels will likely never be identical, so I would tend to follow the train of thought.
    Brian So recently posted…Ten reasons why you should avoid mortgage life insuranceMy Profile

  7. Great advice here, Michelle. So many people think of only how fun it will be to “play house” when they think of moving in together, and they don’t consider the financial and emotional ramifications. One thinking of moving in with a partner would be wise to follow your tips.
    Laurie @thefrugalfarmer recently posted…How to Get out of Debt: Beware of the Self-Justified Pity PartyMy Profile

  8. Michelle- righteous advice here. My wife and I are a bit impulsive- we got together, moved in together, got engaged, and got married within the course of a year, but were we not meant for each other (awww, I know), it totally could have ruined us. We have joint everything accounts, but that this point in our lives, it works for us. However, people should definitely do as you say, not as I did…

Trackbacks

  1. […] thanks for Canadian Budget Binder for including my guest blog post on how to safely and smartly move in with your partner! I know it’s a big step a lot of us […]

  2. […] Canadian Budget Binder looked at what financial steps need to be taken when moving in with your partner. […]

  3. […] “right time” in our relationship. When I stumbled upon the perfectly timed post “Move In With Your Partner: The financial steps” (a guest post on Canadian Budget Binder written by Michelle of Fit is the New Poor) I knew […]

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