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Finance for Humans

I'm moving in with my girlfriend. She makes way more than I do. Can I suggest we "ratio" our rent or is that weird and unsexy?

In her inaugural column, our Etiquette-ist tackles moving in together when one person makes way more.

This is the latest installment of our “Dear Ms. Etiquette” series, where our columnist untangles the issues that happen when people and money get together.

Here’s the truth about that: It is unsexy. But it’s also practical. So you’re going to have to decide what you care about more when it comes to the financial part of your relationship: sexiness or having an awesome QuickBooks relationship and no debt. My personal take is that even the sexiest relationship should (and will inevitably) have a dose of practicality.

But either way, I will share one ingredient to every good cohabitation: openness. Which leads to my first bit of advice. Before you move in with someone, you should always have the money talk. This is true if your incomes are comparable. But I think it’s especially true if they’re not. Making presumptions about who’ll pay for what is mighty shaky ground on which to start a new life.

“Great, Ms. Money Etiquette,” you’re saying. “But what is a money talk?” Well, I interviewed a couple of accountants for this, and we all think the talk should include a few things. First, share your personal budgets with each other. Very exposing, and possibly terrifying, I know. But do it. Here’s one way: Each take a sheet of paper and write down all of your individual expenses, then hand it over to your mate to peruse. If that doesn’t feel sexy, start by saying, “I’ll show you mine if you show me yours.” But seeing how she spends her money will shed light on a side of her you probably don’t know much about (and the other way around, too). Of course, this could be either a good thing or a bad thing (“What’s _Skin_flix?”). But isn’t it better to know that stuff before getting the new keys made?

Here’s a more extreme version of doing that (for people who really love QuickBooks): Pass the list back and forth, so neither of you are dominating the conversation—food, cleaning lady, rent, dog walker, vet, dog food, dog groomer, mortgage, utilities, garage, vacation. Warning: This won’t be that sexy. When I talked to Melissa Lydon, an investment advisor and financial analyst, she said, “The practical process of doing a budget can be very tedious. But it will bring about a huge sense of relief and clarity once you’ve completed it.”

She also suggests using Mint.com to help organize it all. (Did I mention Mint and Wealthsimple are partners?)

Once that icebreaker exercise is done, you can address your “ratio” concept. I always think it’s a good idea to de-accountant-ify terminology at a time like this—maybe calling it “sharing” will make it sound more palatable. “Let’s figure out how we’re going to share our expenses” puts you on a more level playing field with each other.

When you get to the “rent” line, wrap your suggestion up in a resentment-free offering. Say something like "What if I pay one third of the rent and pick up something else, like the dog walker?” The point is to keep it neutral. And as sexy as possible. “Do it in the nude,” suggests New York CPA Jonathan Walsh (cheeky devil…), who brought up a very interesting negotiating point: Not all offerings need to be financial. "Bring everything you've got to offer to the table,” he suggests. “‘You might be paying less rent, but you might be the better cook. So offer to make dinner most nights.”

And you know how much she loves your paella.

But here’s the one thing I believe every “money talk” should include, whether you’re thinking about ratio-ing your rent or not: your financial history, and your current financial status. I’m not talking about sharing your net worth on your first date. But “everyone has a backstory with money,” says Lydon. “And it usually is laced with some kind of emotion—anxiety, fear, guilt.” So share yours with each other. Do you come from money? Did your family never have enough?  Did you earn yours or was it given to you? If you're in debt now, let it be known. If you’re financially independent, explain why. As Lydon so succinctly put it: “Share even what you don't share.” You can say, for instance, that you’re in debt but you need a little time to divulge the details about it. Hiding facts like these isn’t cool, and, frankly, it isn’t fair to the other person.

And remember, money is a moving, living thing, constantly changing its flow. So hopefully one money talk will lead to regularly scheduled (or naturally occurring) money talks.

At the end of the day, the most important thing is that you go into this with no hidden surprises or unrealistic expectations. And be honest, not just with your partner but with yourself. Meaning? Don’t make promises in the name of love that you won’t be able to keep. "If you selflessly say, 'It’s OK if you can’t contribute to the rent while you search for the job that will make you happy’ when you don’t mean it, chances are you'll end up hating your partner,” says Walsh. “Be realistic, and act like adults."

Whether raised toilet seats or hairs left in the shower drain are acceptable roommate conduct might warrant a separate sit-down.

Wealthsimple uses technology and smart, friendly humans to help you grow and manage your money. Invest, save, trade, and even do your taxes in a better, simpler way.

Money Diaries

"MY UNDERGRADUATE ADVISER TOLD ME I SHOULD JUST FORGET ABOUT THE WHOLE WRITING THING. ‘YOU SHOULD FIND A GOOD MAN AND GET MARRIED,’ HE TOLD ME."

Margaret Atwood

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