Moving in together is the next big step in a relationship, and is usually done with money in mind. Rent and mortgage payments aren’t cheap, and how to divide up payments is only one of many questions you should be asking your partner before you move in. Here’s a list of some of the most important financial topics you should discuss with your partner before moving in together.
What Is Your Financial History?
No one wants to admit they spent too much money on a girls’ weekend or that they impulsively bought the latest gaming console the moment pre-orders were available and are still paying it off. And no one likes to talk about debt. But now is not the time to hide how much debt you have. If you’ve declared bankruptcy before, or you owe a significant amount on your credit card, now is the time to tell your partner. Not only will these things factor against you when applying for new rental agreements or mortgages, but they will also impact how much you’re able to contribute to household expenses. Being open and honest can help prepare you both for future financial decisions and ensure you’re on the same page moving forward.
How Will You Fund Major Purchases?
Repairs, unexpected bills, and Christmas shopping are just some of the things that tend to put a strain on your wallet. When you move in with a partner, it’s expected that these bills will be divided. But if one partner is still working through debt or a loan, or makes less money than the other, an agreement on how major expenses and purchases will be made should be made in advance.
One approach is to split costs proportionally based on income, ensuring fairness. For example, if one partner earns 60% of the household income and the other earns 40%, then major expenses like rent, utilities, and groceries could be split 60/40. Alternatively, a joint account for shared expenses can help. Discuss and plan for major purchases in advance to reduce stress and maintain financial harmony.
What Are Your Long-Term Financial Goals?
Do you have a date that you would like to have your debt paid off by? When do you want to buy a house? Do you want kids in the next few years? What about post-secondary education?
If one person’s goal is to build up savings and keep the budget tight for a few years, while the other person wants to get their Master’s degree and travel the world, a consensus should be reached on how budgeting and paying for both parties’ goals should be reached before moving in.
Do We Merge Our Funds?
Joint bank accounts can be transparent to those in committed relationships, and pooling your funds can help you achieve your goals and create a budget. Some people would rather preserve all or most of their savings and income under their own names.
It’s important to discuss and respect each other’s preferences, finding a balance that works for both partners. Clear communication and mutual respect are key to managing finances together effectively.
How Transparent Should We Be About Spending?
Financial infidelity is real and is a huge source of breakups among couples. Figure out your and your partner’s expectations concerning financial transparency and decide how much or what percentage of income should go into an emergency savings fund, what goes to bills, and how much can be designated as fun money. Is hiding expenses a deal breaker for you?
Even though having these conversations could be challenging, they will help position you for success when you move into your new home together.
Are you looking to enter the real estate market this summer? Give us a call today! One of the experienced agents at Zoocasa will be more than happy to help you through the exciting home-buying process!
