Deciding to move in with your significant other is certainly a big, exciting move — but amid that excitement, it can be easy to forget to discuss the less romantic aspects of your cohabitation, like money. “When we think about our finances, rarely do we consider how to integrate them into our overall holistic wellness perspective,” said Amanda Clayman, Prudential’s financial wellness advocate and financial therapist. But “in many cases, our finances can cause stress and affect us physically, emotionally [and] mentally.”
So, even if it feels uncomfortable at first, it’s important to have a series of key conversations about money before you and your significant other actually move in together. Here are four crucial topics to discuss.
How responsible are each of you with money?
“People generally have an idea of the highlights of their significant other’s financial picture: a ballpark on earnings, debt and savings,” Clayman said. But, “they may not know the details on the other person’s level of responsibility.” It’s a good idea to talk to your significant other about if they have a plan for their money (and what it entails), if they typically pay their bills on time, and even what their credit score is. You’re taking on significant joint expenses, and one person’s failure to be responsible with them can impact the other’s financial future — so you’re within your right to ask these questions.
“In a recent study by Prudential, the Financial Wellness Census, we learned that one third of Americans do not have an accurate handle when it comes to their finances,” Clayman said. “So in general, [having this conversation] helps level set our expectations against what’s realistic. When couples take the step of moving in together, they’re establishing a new level of intimacy and partnership. What happens in this stage can set the trajectory for long-term norms. This isn’t to say that you only get one chance to get it right, but it is easier to address change at a natural inflection point than to bring it up later when it’s a problem”
How will you divide expenses beyond rent and utilities?
Couples “may have a rough understanding of how they will co-mingle their finances — like who will take what bills [and] what the rent split will be,” Clayman said. “But they probably don’t have a defined idea of those ‘soft’ joint expenses like groceries and other household expenses. And in my experience, one big area where couples get in trouble is they don’t assess how difficult or easy this plan will be for one or both of them.”
When you’re having the conversations about these splits — including the most cut-and-dry costs like rent and utilities — be sure to go deep and make sure you’re both fully on-board with the division. For example, a couple “may agree that a 50-50 split of rent is ‘fair,’ but for the partner who earns less, this can be a disproportionate burden that can fuel resentment,” Clayman said. Having open conversations from the start can prevent that from happening.
What concerns do you have, and how will you handle problems that arise?
Clayman said it’s important to discuss not only “what to do if one of you can’t cover their end,” but also “your fears about what might go wrong, and a request of how each partner would want the other to bring up any issues, problem areas and specific asks.” Break down a contingency plan in the event that one of you for some reason can’t pay your share: Would you set up a repayment plan for expenses the other person covers? At what point would you rework your budget, or consider downsizing? If your partner has concerns at any time, how do you want them to approach you with those? As for the specific asks, Clayman noted this can be things like agreeing “not to open a new credit account unless [you] talk about it;” or perhaps a certain spending threshold that would require you to discuss it with each other before making a purchase. Getting ahead of potential problems will help ensure you can work through them smoothly if and when they arise.
What are your future financial goals?
If you’re committed to a tight budget and saving for a home or a big vacation, and your partner envisions waiting longer to put money away for those things, that can impact how each of you approaches your day-to-day spending and potentially lead to a rift in your relationship. It’s important to make sure you at least know where each of you stand; and if you don’t exactly align on your goals, at least have a budget plan to which you can both agree.
Similarly, discuss how you approach finances and money decisions in general. “If you are a person who needs a certain amount of structure and security in your financial life, you may not be comfortable being with someone who makes you feel financially unsafe,” Clayman said. “Similarly, a person with a high value on spontaneity and freedom may experience a more structured partner as too overbearing and restrictive.”
As for how to have these conversations, Clayman recommended you “start early and don’t tackle them all at once,” adding that with most couples she works with, one person is more keen on having these conversations than the other. “It doesn’t mean the more financially open partner is correct and the reticent one is wrong,” she said. “In fact, for the one who is more resistant, there is great harm that can be done by browbeating them to move forward. Encourage that person to talk about why this is difficult. Building a foundation of open, constructive, emotionally-supportive communication is far more important than knowing someone’s credit score.”