Lisa Friesen met her husband on the dating app Bumble in June. In July, he moved in with her and her two teenage kids. They married in August and bought a house together in October.
She and her new husband, both in their 40s, were previously married and looking for a long-term commitment. The realization that they could save more money living together than apart sped up the relationship timeline.
“Yes, I love him and we have a great relationship, but the costs of living alone were also straining both of us,” she says.
Traditionally, deciding to move in together – and buying a property – would be a major relationship marker, one made after a prolonged period of dating and careful consideration. But higher costs have lead to “inflationships,” when the living together milestone is accelerated in order to save some desperately needed money.
“It’s the side effect of the high cost of living and housing,” says Liz Schieck, a certified financial planner at the New School of Finance in Toronto.
Couples who live together sooner can share big expenses such as rent or mortgage payments, utilities, subscriptions and household goods, including a new TV or toaster. While hastening cohabitation has potential pitfalls, Ms. Schieck and other personal finance experts say it can make good sense.
‘Getting what we want personally’ and financially
Ms. Friesen and her husband have saved plenty of money since taking the relationship plunge last year.
Before they moved in together, she paid $1,800 a month in rent for herself and her kids in Lethbridge, Alta., and her husband paid $1,200 for his rent. Together, they were able to qualify for a mortgage to buy a fixer-upper home in Lethbridge, which they are renovating. They now pay a combined $750 a month. They also save on utilities, gas (she mostly drives his smaller vehicle now instead of her SUV), subscriptions and other household costs.
“There are all those expenses you need to run a household and now many of them have been taken down by half,” she says. “Not only are we getting what we want personally, but it’s so much better financially.”
Ms. Friesen says she and her husband discussed how to split their expenses in advance. They deposit their paycheques into one bank account earmarked for shared bills. Any extra funds are put toward renovations, vacations and savings.
“We are both pretty frugal and good savers, so it works well,” she says.
Have the finance talk before shacking up
Ms. Schieck says couples considering cohabitation should always discuss how to split the costs upfront. “Fights about money are a leading cause of relationship breakdowns, at least from what I’ve seen,” Ms. Schieck says.
She recommends shared bank accounts for mutual expenses such as rent and utilities, especially if one person becomes incapacitated – or worse, dies – and the other needs to access the funds, something she’s seen happen.
However, Ms. Schieck cautions that a joint account means each person has access to all the funds inside and one can drain it without asking for the other’s consent. “You do want to have trust that the person you’re sharing the account with isn’t going to take off,” she says.
Ms. Schieck also suggests that each person has their own bank account and credit cards to build and maintain their credit history, regardless of how long they’ve been together.
“I think that’s important for security and financial independence,” she says.
‘Cohabitation agreements are romantic’
Couples should sign a cohabitation agreement, a legal contract outlining each person’s rights and responsibilities and how their assets will be handled if they separate.
“I think cohabitation agreements are romantic,” Ms. Schieck says. “It has nothing to do with whether you think your relationship will succeed or fail. To me, it says, ‘We want everybody to be okay no matter what happens.’ I think it’s a very nice thing.”
Mark McGrath, a financial planner and associate portfolio manager with PWL Capital Inc. in Squamish, B.C., says couples who move in together and aren’t married also need to consider the financial implications once their relationship is considered common law, which varies by province.
For instance, in Ontario, a couple is considered common law if they have lived together for at least three years, while in B.C., it’s at least two years. The rules vary if the couple has a child together.
“If you’re in a common-law relationship, then any assets or accounts that came to be or grew in value during the time that you were common law are divisible in a separation, just as though you were married and got divorced,” he says.
