From Erin: “Hey John! This summer I’m going to be moving into a new place with my boyfriend of 2 years. We’ve technically lived together before under his parents’ roof (which we did quite well), but never in our own place while sharing bills. Do you have any tips for what to do before cohabitating/how to make this work best?”
Erin, as with most things in life, communication is greatest tool. But before we get into that, congratulations on cohabitation! Even though you’ve lived together in his parents’ house, this is definitely different and you should be sure to celebrate the milestone.
As far as splitting the bills go, you should spent an hour or two before you move into your own place to talk about splitting bills and about your financial situation overall. You’ve got a few months, but don’t put it off until the last few weeks. That time is going to be spent packing boxes and managing logistics, so trying to squeeze in a serious conversation then would do you both a disservice.
When you do have the conversation, there are a few things to keep in mind, so we’re going to tackle them in a list:
- You don’t have to split every bill evenly, or contribute the same amount each month. This is especially true if there is a bit of income disparity or one of you is paying off more student loans than the other. “Fairness” doesn’t necessarily mean you each contribute equally. It could mean that you are each paying what you can afford in a way that doesn’t stress either of you out.
- Be honest about your financial situation. It won’t work if one of you feels like you’re doing too much or too little of the bill paying. So you both need to be honest about your financial situation and your goals. After two years, you both know a lot about each other and, presumably, each other’s finances. But don’t be afraid to really spell everything out. That’ll make whatever you decide on seem much more fair.
- Consider a joint checking account or joint credit card. A joint checking account is an easy way to manage bill paying – you each deposit whatever your agreed upon amount is every month and use that to pay the bills. A joint credit card might be a nice way to start racking up airline miles that you could redeem for a vacation somewhere. You don’t have to merge your money (in fact, I recommend most folks don’t), but you can use a joint account or card to create some overlap that makes life easier.
- Be sure to pay yourself. Whatever you agree to in terms of bill-splitting, make sure you’re each setting aside money for your future. Both long-term goals (retirement, home ownership, family, etc) and short-term goals (car maintenance, vacations) can’t be sacrificed when you move into your own place and start working through the financials month to month.
- Find out what each other’s “financial philosophies” are. If you’re a natural saver and he’s a natural spender, that’s entirely alright. Just be sure to talk about it and make sure each of you feels comfortable. Whether you want to talk about big purchases before you make them or just keep most of your finances separate (aside from those joint expenses), recognize how the other person behaves around money and support each other.
None of this plan has to be, or should be, stressful. Just be open and honest, come up with a plan that works for the both of you, and look forward to living together.