By Ariel Kempf, March 29, 2024
I was driving around and listing to OPB at the end of the year last year. I heard an interview with Anna Sale that has really stuck with me. I’ve a bit of a fly by the seat of my pants kind of person historically, but this interview has shifted something in my thinking. So much so that I followed up by looking up the article being discussed a little later that day, and have come back to it a number of times since. In the article, she was speaking to the importance of asking these money questions of your partner before you move in together. How helpful to have these questions answered before you buy a home together! I’d love to expand the conversation to include people other than a romantic partner, but more on that later.
The article starts off with the acknowledgement that so many of us are raised to be vague when talking about money, but I do think that is changing for the better. As with most things, we improve with practice. Sale says,” talking about money openly makes you better at talking about money. You’ll get to know each other’s abstract beliefs about money and how you want to translate them into concrete actions. Your shared vision as a couple will take on more dimension, and as you get comfortable with each other’s money habits and hangups, you’ll also be more readily able to ask and offer help to other loved ones in your lives.” Take your time to be thoughtful and honest with each other when you share your answers.
Now for the questions:
What do we want our life together to look like?
Before decisions about money are discussed, an exercise in envisioning your future together is helpful. “Talk about lifestyle routines, housing priorities, career ambitions, fantasy purchases and experiences. You’ll get to constraints later, as well as the how of it all, but first, describe the broad strokes of how your lives could look together.”
What would you do if you won the lottery?
“What would you do with a windfall of cash? Framing the question this way for people from different cultural and socioeconomic backgrounds, helps to describe the key values underlying the more abstract question of what money is for. That, in turn, can help identify the roots of any future money misunderstandings. And it will help you clarify what you want to drive your future financial decisions together”
How do you think your financial priorities might change in the next 10 years?
“If you’re moving in together when you’re both early in your careers, with no kids, this question may help guide you to what may come next. Do you want to be a parent? Is owning a home important to you? Is marriage something you see as the next step? This approach can also be applied to couples who find each other in midlife or later, where there might be financial obligations to children or aging parents looming or questions about their own health care as they age.”
Getting a little more personal
How much money do you have? How much debt?
“Disclosing how much money you make, along with your savings and your debts, is an essential relationship conversation, and also, a delicate one. Approach this sharing like story swapping, just as you’ve caught each other up on your family backgrounds and your relationship histories. Brace for a little embarrassment: You’re revealing how much your public presentations match up with your private credit histories. Anticipate inequalities, and discuss but don’t dwell on them. And remember, like most major life decisions, facing financial facts can take time and emotional preparation. When it comes to your partner’s private financial details, no snooping without permission! And because it needs to be said: No lying either.”
Is there anything about your finances or future finances that I should know about? Anything about my finances or future finances you’re curious about?
“Lying in response to direct questions is one thing. Evading, though, can happen more easily, even unintentionally if you keep putting off the disclosure of embarrassing or uncomfortable financial information. So, after you share basic facts like earnings, debt and built-in expenses within a relationship, circle back with open questions to invite more exploring. This could be when you hear about a past bankruptcy or an expected inheritance. As much as you can, listen without a lick of judgment.”
The nuts and bolts
If we share a household, do we want to share money?
“There are a lot of different ways to go here: totally separate, some separate and some shared, and totally shared. Talk through what feels right to you, both in how much you pool your money and how much you expect each other to disclose if you’re spending your individual money. If you do have shared expenses, consider a shared household account to cover shared expenses to keep you from a running tally posted on the fridge. As you build out your household budget, you can also design your own system to most fairly divide who contributes what to the shared account.”
Do you like managing household money? Who’s in charge of our shared domestic homework?
“Managing a household’s bills, mail, taxes and financial paperwork is a lot of work. It’s also a source of great power. Some people thrill at that level of detail and control (including yours truly). For others, money text alerts and opening bills can make you shut down. Get to know each other’s personalities around all the paperwork that being a grown-up requires, and see if by tackling different pieces together, you can help each other. For example, I am good at not missing deadlines and reading the fine print, but I am easily rattled by unexpected expenses. My husband is the keeper of the big-picture budget and he helps me by calmly zooming out and reminding me that there are a lot of incremental steps to take it’s a catastrophe.”
What happens if one of us dies unexpectedly?
“For lots of couples, it’s not until you have kids that you start considering wills and life insurance. But if you are sharing and plan to build a household together long-term, a term life insurance policy could be worth considering, particularly if one of you earns much more than the other or you’re buying property together. The whole exercise can also deepen your sense of commitment to each other.”
Do we need outside help?
Should we talk to a lawyer?
“Couples who are moving in together, whether they intend to marry or not, can benefit from understanding their state’s laws about couples and assets at the end of a relationship. If you live with a romantic partner for years who makes more money than you, you could end up with very few financial protections if you break up. Consider talking to an attorney when things are good and talk about how you’d separate your financial lives if you had to. Whether you plan to marry or not, some attorneys call this a prenuptial. Others might call it a cohabitation agreement.”
How do we stop having this same fight about money?
“We have tools like auto bill-pay or monthly savings withdrawals to trick us into good individual habits, and you can take the same approach with the triggers of your domestic money spats. Decide how you want to approach something causing financial stress in your relationship and then try to automate that approach.
For example, if one of you has an online spending compulsion that’s getting in the way of a shared financial goal, try setting up an account with an agreed upon online spending allowance each month and then stick to it.
You could also consider setting up a “fun fund” — a pot of money dedicated exclusively to things you each enjoy. For example, sometimes one person in a relationship wants to own eight bikes, and the other person is like, we have this mortgage.” It could be just the thing to prevent future fights.
Whom could we ask for help in a money emergency?
“Finally, when you share a household with your romantic partner, their people become your people. These networks of love and support are also part of your financial lives. Tell each other who might have helped you financially when you needed it, and whom you’ve helped.”
Why not get the lay of the land ahead of time and make a road map for your future? You can always change your mind, because nothing is ever set in stone. Engaging in asking these questions or questions like them is a great way to get to know your self and your partner better! You never know where it will lead, but without a doubt, you’ll have better understanding, and who doesn’t want that?
The article was originally published here Ask These Money Questions Before Moving in Together
Ariel Kempf
Broker | OR
She/Her
I was first inspired to get into real estate after I purchased my first home. I was so well taken care of throughout the process by my realtor that I wanted to be able to offer the same support and service for others. Home ownership opens so many doors, and everyone deserves a place to call home.
Finding the perfect home is an adventure, and I am always up to the task. I approach finding a home for my clients much the same way I hunt for the period appropriate fixture or piece of vintage furniture for my 1927 home. My eye for detail, and some personal know how serve me remarkably well when marketing a property for sale and having a vision for renovation work as well as a working knowledge of period styles in architecture.
I love what I do! Whether I’m helping someone buy or sell real estate, I enjoy every part of the process. I pride myself on communicating clearly and thoroughly throughout the experience. It is important to me that my clients feel confident from start to finish. I will be with you every step of the way, and will do everything I can to make the process a pleasant one, and I aim to build relationships beyond closing. As a member of your team, we can turn your dreams into reality!
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