In many relationships, the notion of moving in together will come up at some point. Advisors recommend anywhere from six months to a year, while others recommend even longer. The opinions vary of course, with shorter frames thinking along the lines of “long enough to know it’s worth a shot, but not long enough for a permanent move.” Those thinking in longer frames are playing for safety, of course, but opponents would argue that if you’re going to wait two years you might as well just get engaged at that point.
It’s an important move, of course. Modern relationship experts believe that before marriage, a phase of living together can be considered “training” for actual marriage. After all, it’s otherwise impossible to tell how you’ll really get along with someone day in and day out if you only ever see each other on dates. When you’re married, your entire home life centres around contact with the same person, and this is the phase of a relationship that can seriously impact whether or not that aspect of your long-term life plan will be successful.
Naturally, the best idea is to learn how to compromise in the event that things don’t work out…but that’s advice for another article.
In any event, there are plenty of factors worth considering when moving in with your girlfriend. Does she move in with you, you with her, or do you get a new place together? Whose furniture do you keep? Or do you put some in storage “just in case?”
A lot of guys opt for the latter, and it’s not a bad idea. But if you do move into a new place, consider what your lifestyle will cost if it doesn’t work out. You don’t want to end up in a crummy basement one bedroom until you can get built up again.
So for couples, one of the big mistakes is “doubling down” on rent or a mortgage. If you’re not committed on the level of marriage, don’t think of it as a pool of resources, because if it ends your pool is instantly cut in half.
Instead, during the “living together” phase, get a place that’s big enough for two (even if it’s her place or yours), but that you could afford on your own. You’ll each pay half the rent, half the utilities, and half the insurance (or property taxes, although I don’t suggest buying a house if you’re not married). But pay yourself the full amount and put half into the pool and half into savings. From your perspective, you’ll not only be saving up a ton of cash over the course of each year, but also learning to live within the full cost of living at thst level.
If it should happen that you decide to get married and invest in a home, you’ll have built up considerable leverage toward your down payment. If the relationship doesn’t work, you’ll have half your rent already saved up, and you’ll know exactly how to budget your lifestyle at that level.
In other words, by only renting what you could afford on your own, you’ll both be able to maintain financial independence while simultaneously building up capital for the future. Here are a few situations worth considering:
1. She moves in with you:
This is easy. You already know you can afford this place. If you decide to split the rent (the only fair option, let’s be honest), you’re still ahead of the game. Store up half your regular monthly rent as if you were paying the full amount. If your rent is in the $1,000 range, you’re stocking up $500 a month, which is a tasty $6,000 a year. That’s a pretty solid savings account, and if she’s doing the same your collective savings, should you decide to move forward to buy property together, will be $12,000 a year. If things don’t work, you still have a place you know you can afford.
2. You move in with her:
Ideally her rent won’t be appreciably higher than your current rent, but even if it is your overall expenses will be split. In the above example, let’s say she’s paying $1,200 a month to your $1,000. You’re still only paying $600, but saving another $600 for your own security. Your collective costs in terms of food and utilities, however, will be lower, so at the end of the year you’ll have $7,200 ($14,400 together) in savings. You can see how this adds up!
3. You rent a new place together:
If you’re shopping for a new place, don’t think, “hmm…she pays $1,000, and I pay $1,000…therefore, we can get a place for $2,000!” This is financial suicide for both of you. If things don’t work out, you’ll have no savings and be no further ahead. And if things do work out, you’ll have to work twice as hard to save for the future. It’s OK to think of your team as better than your solo efforts, but consider capping your increased expenses at 20% (so, nothing over $1,200 in total, in this example), and stick to the rule of saving half that amount for yourself.
4. You buy a house, and she moves in:
If you already own a home and the plan is for her to move in with you, the situation is exactly the same. Half the costs of setting up house, and your mortgage, taxes, and utilities will be cheaper. But paying yourself as though you’re paying the full amount on these costs will yield a substantial savings account by the end of the year. And the title in your name is still security, as well as the knowledge that you can fully afford to cover these costs on your own if it doesn’t work out. Plus, if it doesn’t work out, she’ll also have savings built up for security and won’t be in dire straits if she moves out.
5. She buys a house, and you move in:
Now the title is in her name and she owns the property. Ideally she’ll have a place that you could have financed on your own so that this system works out the same way. If this is the case, the setup is the same. Pay her half the expenses and put the other half in a savings account. DON’T TOUCH IT. If you get married, this is a large sum of money that can be used for wedding expenses, a honeymoon, or a second property investment. If it doesn’t work, as I said, you’ll have a pool of capital so you won’t end up on the street.
The moral of the story here is to keep living within your means. Moving in together is a great experience, but nothing is permanent until it’s permanent. So until you’re married, consider your living situation as a waypoint on the path to permanence. Ensuring that you could cover the living expenses on your own, you’ll both be in a much more secure position. That way if things don’t work out you won’t be deluded about the real cost of living. And if they do work out, you’ll have a great start on building a financial future together with the savings you’ve accumulated.