The Great Merger: What You Need to Know Before You Cohabitate

i mean we’re pretty cute right

“Be open, be honest, and get a gender-neutral couch.”

That’s what a friend said when I asked him for advice about moving in with your partner. Fair points, all, but I needed more. Summer is encroaching on Toronto, leases are coming to an end, and the hypothetical conversations I’ve been having with my boyfriend about shared cutlery and whose coffee table is better are becoming more and more real.

So I called an expert: Zach Teutsch, a financial coach you may remember from other illuminating conversations/therapy sessions. Today, we tackle the questions you need to address before buying that couch, why family matters most, and why “fun” is the order of the day.

A Conversation About Retirement; Or, Meghan Learns She Might Be Rich

Meghan: Zach! I need help again. This is my first rodeo. I have never lived with a partner before, and my boyfriend and I are on the brink of making the move. I have numerous concerns, but financially, I’m terrified. Help!

Zach: That’s potentially great news (both personally and financially)! Speaking personally, it’s the best general happiness decision I ever made and probably the best financial one as well. And yet, it’s normal to be anxious.

There is a great old Jewish parable about this (indirectly): a man asked for his rabbi’s blessing to become a carpenter; he got it, but that line of work didn’t go well. Then he asked the rabbi’s blessing to be a butcher. He received the blessing but this wasn’t a fit either. The rabbi asks his parishioner whether he’d considered being a rabbi. “Of course not,” the parishioner replied, “I’d be terrified to make decisions that could change people’s lives so completely and risk their eternal reward!” The rabbi replied, “Your concern shows that you are ready: if you weren’t worried, you wouldn’t do a good job.”

Certainly the theology isn’t a fit, but the idea is an important one: sometimes being concerned is what you need to make an endeavor successful. If you had no concern, that’d be worrisome on its own.

Tell me more about what’s on your mind. What are you worried about?

Meghan: Well, now I’m worried about incompetent butchery. But! Beyond that. You and I have spoken before about how finances can affect a relationship, and I expressed my nerves around the idea of “sharing” — I’m an oldest child through and through. I have trouble peeling my grubby fingers from my money, and I’m concerned about the resentment that can brew in that kind of situation. I’m also just worried about the practicalities of it all! How do we divide purchases? What is considered shared and what isn’t? How do we settle these disagreements?

A Conversation About Power, Sex, and Money

Zach: You’re starting in the right place by thinking about what the emotional and family influences are that structure how you feel and think about money. Self-awareness and communication are two keys to making money a tranquil issue in your relationship.

Meghan: To keep it biblical, do you have financial commandments around moving in with your partner?

Zach: My first commandment is: It’s an experiment.

When you try a new system, whatever it is, set a calendar appointment to have a date three months later. Over the course of dinner (or the rodeo or whatever) chat about what’s working about the new system and what can be better. When you try something like this, it really lowers the stakes to know that it isn’t forever. If it’s a shared experiment, it’s fun, you learn together. And, if it works, that’s a huge payoff for not a lot of emotional investment. How does that strike you?

Meghan: I love that idea. “Fun” isn’t a term that I had associated with this whole bonanza — not to say I’m not looking forward to living with you, boyfriend, I am!

Zach: Well, as you know, my partner Becca and I met via Craigslist. Specifically, she moved into our group house. That was nine years ago and we’ve now been married for more than six of them. I was worried about starting to “date” my roommate. A friend offered a piece of advice: don’t go looking for problems. People often get way tense about finances and that worry (and not the actual money stuff) makes the whole thing icky. So, if you can figure out how to connect about this stuff with low stakes (or even steaks!) and without bringing a lot of tension to it, it’ll go way better.

So, like any important conversation, make sure you have enough time, you have the right amount of food/drink, and aren’t tired. It’s a bad idea to have important conversations late at night or when people are emotionally responding to some external stressful trigger (like a fight). For that reason, DON’T DISCUSS THIS ON MOVING DAY!!

Meghan: SO SMART.

Zach: Look, moving in is a big moment in a relationship. It’s a good occasion to make sure you are on the same page (or at least in conversation) on a lot of topics, some of which are financial. Here are a few (influenced by a great article on this topic many years ago by Ron Lieber):

Four Talks About Money to Have Before Marriage

  • Where are you from financially? What’s your money story? What are your earliest financial memories? How did people talk about money in your family? When they worried, what did they worry about? This is important because so much of our own attitudes are inherited even if they are no longer reasonable anxieties, since they apply to our parental circumstances which are often different from our own. Bonus points: discuss what your class background is.
  • What assets and debts are you bringing to the relationship? This needs to happen before any decisions on merging finances but that doesn’t have to be part of moving in together: in fact, maybe it’s better to keep it separate.
  • What is a big purchase for you of the sort that requires consultation?
  • What level of earning/affluence do you expect in the future? Like bullets 2, 3, and 4, this should happen before linking finances fully.

This brings me to the next two commandments:

One decision at a time: You are already moving in together, you don’t need to merge finances now. You could, but you don’t need to. Figure out living together. If that works, in a few months or a few years, you can further intertwine lives via financial connection. It’s hard enough to adapt to living with someone else, no need to complicate it with a whole lot of other interesting (if complicating) other questions.

Every relationship is different so every financial approach should be different too: At the risk of beating a dead horse, many people think there is a perfect way to have a relationship. There isn’t.

Meghan: I hadn’t thought of this decision as one warranting a deeper dive into our financial histories. I want to know those things about my partner, though, especially because I can only imagine how deeply they influence his reactions. “I’m like this because X,” etc.

Zach: You totally got it Meghan! I previously shared my Your Partner is a Reasonable Person principle. It is very useful to understand the range of experiences they are reacting to, which helps us understand their reactions. The more we know about their money story the more context we have to see them as reasonable people, a key to a successful partnership (whether business or romantic).

Meghan: He is a reasonable person! Most of the time. (Sorry, boyfriend.)

So, getting to the brass tacks of it: I know there’s no one-size-fits-all approach to managing these issues, but one of the ideas I’ve floated is creating a separate account (or credit card) that we would each deposit a fixed amount in each month and use that account for all shared purchases — groceries, toilet paper, etc. I like this approach because it still gives me the freedom to get my eyelashes done IF I SO DESIRE, and hopefully mitigates the exhaustive spreadsheeting, etc, that I’m worried might make both of us feel a little constrained. Are there pitfalls you can see to this kind of arrangement? (Arrangement sounds so romantic.)

Zach: I think that’s a great idea! In fact, 2008 Zach did too, that’s why Becca and I tried almost exactly the same plan. We opened a joint checking account and each carried a debit card. When we bought groceries we used the card, when money ran low we both contributed (more on that in a sec). This worked for me because I have a weird aversion to getting receipts, totaling them, entering in a spreadsheet and settling up. It sounds easy (and probably is) but I HATE it so any system that requires that wouldn’t work for me and therefore not for us.

When we needed to put money in, if I recall correctly, we put it income-proportional amounts. At that time I made more so I contributed proportionally more (I think I contributed $600 and Becca contributed $400). When we would say “let’s split this” or even “let’s split this evenly,” to us that meant, let’s split this income proportionately. You needn’t share our analysis of what it means to “split a check,” but you should make sure your values are reflected in your system.

Eventually, you might want more integration, but the system you suggested is a great way to work at this moment. It makes it easy to split with a minimum of friction and logistical difficulty, but it also makes it easy to up the ante and merge finances later. This phase will teach you a lot. Who knows, it might not even be a phase, lots of couples continue with a version of your system indefinitely.

Meghan: Boyfriend is actually sitting across from me as we chat, and when I told him about the idea of contributing proportionate to our income, he said “Iiiiiinteresting,” and then ran away to get an iced tea. TRICKY BUSINESS, this.

But thank you for the validation! It’s nice to know I’m not going into this completely wrongheaded — or without direction.

To wrap up, if there is one warning you’d issue to couples considering this kind of move, what would it be?

Zach: If something isn’t working, communicate and try something else! So: 1) you need to recognize if what you are doing isn’t working; 2) you need to be talk openly about it; and 3) both people need to be open to trying something else.

I want to make a general point: living together has one obvious, major financial benefit. Instead of living one person per bedroom, you live two people per bedroom. This can effectively cut your rent in half. That’s huge! HUGE! Whenever people get a raise, or cut expenses, it’s important to not get suckered into lifestyle inflation, when unnecessary (unfulfilling) spending grows and you are no happier (or more generous). Consider this a great opportunity to pay down debt, save, or put money aside for a specific purpose (vacation, school, etc). Don’t just squander the financial upside. And maybe don’t just double your rent since you can “afford” it.

One last thought which might be too big for a last thought: if you are having a money fight, it’s probably not really a money fight. Fights about trust, judgement, and communication often present as fights about money but the financial issue is the symptom, not the cause. High functioning relationships often have hiccups, but the sooner you can communicate discomfort and figure out the real cause, the better. You’ll be in a much better place to enjoy the whole benefit of the living together: Rent Special: 50% off.

Is that a wrap for today, Meghan? Are you ready to move in? And Boyfriend, how was the iced tea?

Meghan: He’s enjoying it immensely 🙂

Questions for Zach? Leave them below or check in with him over at his website.

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