The First Step to Combined Finances – Cohabitation

I have some big news in my life. On April 1st, my wonderful girlfriend and I are going to be living together. J is moving in, along with two furry friends, and we are going to start a new home together.

A Lot Changes

When you move in with a significant other, a lot changes with your money. It is easy with a roommate. We split the cost of rent, we each bought our own food, we split the Netflix account, and things were simple. Now, living with a girlfriend, we have to decide how to do things to make them fair. Here are the big money issues you have to tackle as a couple when you decide to move in.

Rent/Mortgage Costs

The first major cost that you have to deal with is rent. In my situation, my girlfriend is moving in to a condo that I already own. To ensure everything is fair, we decided to split the monthly costs down the middle. In the end, it is a great deal for both of us. Our monthly cost each is going to be much lower than rent in the neighborhood, so she is saving money, and I am splitting the costs while building equity, so it is a great deal for me too. If your incomes are dramatically different, some couples split the rent differently to make the costs line up better with incomes. I do not support one member of the couple living for free. That person is taking advantage and is not supporting building a long-term relationship where both partners contribute as a team.

The Groceries

Food is a big cost and, unlike rent, both partners may not use it the same. It is common for one person to each more than the other, one to cook more than the other, and one to eat out more often than the other, particularly for lunch. In my relationship, we decided that it would be easiest to trade off paying at the grocery store, so we will come out roughly even in the long run. For other couples, it may make more sense for each person to pay for their own food or to split the costs 60/40, 75/25, or another way so both partners feel comfortable with the costs.

Entertainment Costs

We all like going out and having fun. However, some people rack up higher bar tabs, spend more on movies, or have other spending habits that are different than our partners. For entertainment, I advocate each person spending their own money unless the specific cost is for a shared purchase. Even for dates, I plan to still pay a bit more often (I am traditional like that) and treat my girlfriend to movies and other fun activities.

New Items for the Home

Once you share a home, your home furnishings purchases are for two people. In my relationship, we are going to share or trade off costs so everything is even in the long run. I would suggest couples looking at their incomes and how much either person will use the new purchase when making decisions like this. If the purchase is for shared use, it should be a shared cost.

How Do You Share Costs?

If you are in a relationship, how do you share costs? If not, what do you think is the best way to do things? Please share your thoughts in the comments. Image by vonderauvisuals / flickr

4 thoughts on “The First Step to Combined Finances – Cohabitation”

  1. Congrats! Very exciting. We’ve been living together for almost 6 years (and bought our first house 4 years ago) and share everything. Everything goes into a joint account.

  2. “I do not support one member of the couple living for free. That person is taking advantage and is not supporting building a long-term relationship where both partners contribute as a team.”

    Do you feel similarly about married couples, especially once they have kids? There are many contributions that one member in a relationship can give that are beyond financial considerations.

    1. I meant that for early in the relationship. Once a couple has more history, I lean more toward the end of that statement, a situation “where both partners contribute as a team.” That could be financially or thought other means, such as running the household or spending their time taking care of the kids during the day.

      I think the most important part is that neither partner feels like they are being taken advantage of.

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