Moving in together: financial considerations
Deciding to move in with your partner is an exciting new step in your relationship, but will also have financial implications. In the midst of all the excitement over new cushion covers and cosy nights in, remember to think through the financial decisions you’ll need to make. Getting things clear from the beginning can help you to avoid problems later on.
Here are some of the things you should consider:
Who will pay for what?
- A straightforward option is to divide household spending equally between the two of you, but if one partner’s salary is significantly higher than the other partner and you have different expectations of living standards, this could be more complicated than you think.
- Another option is to add up your total household expenses and then add together your total income. With these two figures you can then work out your salary as a percentage of the total household income, and pay a share of the bills according to that percentage.
Setting and sticking to a household budget can also help ensure that you and your partner both agree on how money should be spent. MoneyHub, allows you to see all of your account balances in one place, create a detailed budget and track your progress to meeting your goals.
Where you keep your money
You will need to decide whether to pool all your money together, maintain separate current accounts, or take a combined approach – here are some of the advantages and disadvantages to each approach:
- All in together: sharing a central account can help you keep better track of your household income and spending, but if one of you goes overdrawn both your credit records could suffer and you’ll both be liable for the debt.
- Keeping it separate can give you greater independence, but dividing household costs down the middle can be tricky. One way around this could be to each take responsibility for certain areas. For example, one of you could pay the rent or mortgage while the other pays for utilities.
- Using a combined approach: some couples use a joint account that they both contribute to and use to pay household bills and expenses, while maintaining separate accounts for everything else.
Whether you’re renting or buying, you will need to think about how you’re going to meet the cost of the property that you're in.
- If you’re renting together make sure you know whose name is on the rental agreement. If both, you are both responsible for paying the rent, and the landlord can chase either of you for failed payments. If you want to keep things separate, you can try asking your landlord to draw up two separate agreements, each for half of the rent – although the landlord may not agree to this if you are living as a couple.
- If you have a mortgage or are thinking of buying you’ll need to decide how you’re going to divide up the cost of paying your initial deposit and mortgage repayments, as well as whether you want to be joint tenants or tenants-in-common. If you are joint tenants, your partner will inherit your share of the mortgage if you die. If you are tenants-in-common, you can pass your mortgage share onto someone else.
Making a will
Remember that if you’re not married and you don’t have a will to say otherwise, your partner will not receive any of your personal belongings, property or assets if you die.
Read our guide to wills for more information.
If you’re about to get married, read our guide to getting married and your finances.
MoneyHub can help you manage and track your household finances.
Last updated: 09 June 2015