Editor’s note: This article was written in partnership with Heidi Geller.
Living with your significant other can be wonderful. It represents a major commitment to each other and could also offer sizeable financial benefits, as you no longer need to pay for two separate living spaces. Additionally, when you live together, you build a home together.
Although, when you live together, you also need to maintain a household. Running a household is about expenses, savings, time, and other resources. It’s the business side of your personal life. How will you share the expenses? How will you share household chores? When things break, who is responsible for getting them fixed?
No matter how excited the two of you are about living together, the transition is not always easy. Both parties must adjust to living with another person (or, at least, a new person). Disagreements, discussions and compromises are inevitable if the relationship is going to thrive in this new environment.
Talking about these types of issues will provide clarity, avoid misunderstandings and start the new phase of your relationship on more solid footing. And as you get ready to have this discussion, it’s important to always remember the four “Rs.”
1. Be “Realistic”
Regardless of any similarities or differences in your financial situations, it’s vital that both sides are realistic about how much each of you can financially contribute. Without a hefty dose of realism and discussion, couples may be doomed to fail because money will be an ongoing source of conflict.
For example: Assume Cindy and Sam are moving in together. Cindy’s annual salary is $350,000 as a lawyer, while Sam earns $60,000 a year as a teacher. They decide to move into Cindy’s $700,000 home. The monthly costs to cover the mortgage, taxes, insurance, utilities, and maintenance is $7,000. Cindy is aware of Sam’s lower income and graciously tells him to contribute whatever he can afford. Sam feels guilty about not covering his full share of the expenses and offers to pay Cindy $3,000 a month.
Cindy should not accept Sam’s offer; it’s not realistic. Sam’s net income is about $3,750 a month. If Sam pays 80% of his monthly income just to pay bills on the house, he will have virtually no money left for other expenses. He’s likely to struggle making the payment each month. So, Cindy might get irritated that he’s not keeping up his end of the bargain, and Sam may feel resentful that he’s spending his entire income.
An unrealistic arrangement sows the seeds for future conflict. That’s why it’s so important for both sides to be realistic about what each person can afford.
Questions to consider:
- Is a “proportional contribution” strategy (the amount you contribute to expenses is proportional to the amount you contribute to overall combined income) right for us?
- What do you consider as monthly expenses that should be shared?
- What expenses will you have outside of monthly household expenses?
- Who is responsible for paying for house repairs?
- What feels like the correct percentage of your income to spend on household costs?
2. Define “Roles”
Business arrangements around living together go beyond paying the bills. A household has many other business functions that need to be discussed. It’s quite common for the partner who earns less money to take on more of the roles such as house manager, gardener, or cook. In our example, Cindy’s job might require 60-hour work weeks, so Sam might have the time and inclination to deal with these necessary household tasks.
Conversely, by moving into Cindy’s house, Sam may have added an extra 30 minutes each way to his work commute. While he might have the inclination to take on more of the household chores, he may not have the time to do them either. In cases like this, sometimes the couple needs to expand the conversation. Is this the right house for them? Maybe they should move to a house that is a shorter commute for Sam. Are they both comfortable with Cindy working more than 40 hours a week? Maybe she would prefer a less demanding job and a simpler lifestyle.
Defining these roles in the context of what matters most to the couple is so important, because the house must still be maintained whether you have time for it or not. Someone still needs to do the cooking, cleaning, lawn care, etc., and when you and your partner know your roles, it’s much easier to get into a habit or routine.
When the business discussion expands beyond money and includes what matters most to the couple and what needs to happen to keep the household running—and who will do what—the divide between partners often shrinks.
Questions to consider:
- Are there certain responsibilities you like doing or want to avoid?
- How will you consider time into the equation?
- Who is responsible for household repairs—either by making fixes yourselves or finding someone who can?
3. Remember to “Relax”
Once the deal is struck, it’s important for both sides to relax and feel good about the arrangement. If Sam pays $1,000 a month and Cindy feels resentful that he is not paying enough, the arrangement won’t work. The truth is, Cindy may rationally understand that Sam can only afford $1,000, but she may still be emotionally upset that he is not paying enough. If either side doesn’t feel good about the deal, more work needs to be done. Where does that leave Cindy and Sam?
Cindy might be struggling with a childhood money message: Her partner should cover at least 50% of the household’s expenses. If that’s the case, she and Sam have a few options. They might work with a behavioral wealth specialist to unpack Cindy’s childhood money message and consider if she wants to reframe it. They could also agree to move into a less expensive home where Sam’s $1,000 is a larger percentage of the total household expenses. Or, they might seek the help of a couple’s therapist to talk about their expectations of each other as they consider moving in together.
On the flip side, Sam might be struggling with (outdated) gender politics that put pressure on him to be the breadwinner in the relationship. He could resent Cindy for making more and contributing more than him, so he may try to steer them into a house they can both more easily afford to pay an equal share.
Either way, it’s important for both parties to come to an agreement that makes them comfortable and allows them to relax.
Questions to consider:
- Does anything about your arrangement make you uncomfortable?
- Would speaking with an outside professional help you pinpoint any concerns?
- What can you and/or your partner do to help ease the situation?
4. Keep “Romance” in Mind
We move in with our partners because we love them and want to share a life together. After the business discussions are through, Cindy and Sam need to take time to reconnect with one another and remember the love they feel for each other.
Romance matters. It strengthens our connections with one another, and it helps make the business conversations much easier.
Questions to consider:
- What can you do to show your partner you care?
- What can you do to have fun together?
- Can you spend some time doing something you both find meaningful and fulfilling?
Moving in with your partner signifies a major step in your relationship, and while this big change can cause some friction, it’s important to keep the four “Rs” in mind. Include your financial advisor in some of these conversations you have with your partner, as they can often shed light on how to deal with a significant life change like this and ensure you’re better prepared for the financial side of moving in together.
CFP® David joined Wealth Enhancement Group through the partnership with JOYN Advisors, where he acted as CEO and Co-Founder. He is the creator of the Behavioral Wealth Management™ model. A model that focuses on aligning wealth management with the integration of human emotions while taking into consideration an individual’s talents, wisdom, network and relationships. David has been featured in a number of prominent outlets including The New York Times, The Wall Street Journal and The...Read More