How Should Couples Split Household Bills?
WHEN YOU MOVE IN WITH SOMEONE YOU SHOULD NEVER EXPECT TO PAY LESS OR MORE BASED ON YOUR INCOME LEVEL.
Moving in together is a big step for couples and with that comes an entirely new set of financial rules mainly called, splitting. When should you talk about money in relationships? Whenever it is right for the both of you but certainly before moving is ideal. Don’t be afraid to pull out the money card because if you’re thinking it then it is important to you as it should be.
Living together may be economical especially if you are spending every day with someone you care deeply about however there is much to discover before you take that step. Some couples just end up moving in together without even knowing it.
A shirt here, pants there and before you know it your bathroom counter shares his and her health and beauty products. What in the world just happened? You moved in together and with that comes financial responsibility.
Unless you plan to fork over all the money for your partner who now lives with you, talking about splitting household bills is a good idea. Generally doing this before-hand is ideal but for those of you who melted into one living arrangement a day at a time you may have missed this step.
Would moving in together be a good indicator whether a couple would survive marriage?
I don’t believe in that kind of stuff because every person is different. I’m sure there are people reading this right now who lived together before marriage and are still happily married. I didn’t live with Mrs. CBB before we got married and we’re still going strong years later. I’m sure it would certainly help to see what you don’t see if you aren’t living together. For many it’s a blessing in disguise which cost them a fortune in divorce fees up the road and for others it’s not a big deal.
Does Your Relationship Qualify as Common law?
A common law relationship is defined as two people who live together in a committed “marriage-like” relationship.
To be considered in a “common law marriage”, a couple must live together for a specific period of time as outlined by the provincial legislation of they province they reside in.
In Ontario the time-frame for common-law living is 3 years or you have a child or relationship that would keep you around in some form of permanence.
Who pays the household bills?
It can be as messy of a financial situation as you’d like or simple if a couple decides on how to split household bills without playing the ‘who makes more‘ card. In some cases one partner might not even have a job or collects social assistance or disability. Although money is important to a relationship splitting based upon income level is just asking for trouble.
Dear Mr.CBB,
My boyfriend and I just moved into our first basement apartment last week and tonight we had a chat about who pays what for the household bills. He seems to think since I make more money that I should pay a larger portion of the rent to balance our finances out. Our rental costs are $1400 a month plus hydro,water and gas. Parking costs are $35 a month for 1 car that we both use.
We’ve decided to split the groceries and utility costs equally apart from our cell phone bills. He also said that if I buy anything “special” that I should pay for it myself. Any other personal purchases or debts we pay for on our own. I know my guy is frugal but I didn’t realize how frugal until this conversation. Maybe I should have done something different before getting the apartment. I hope moving in together wasn’t a mistake.
CW.
Relationship Rules Matter
Every relationship needs some sort of rules that work for the couple whether it be personal or financial. If you’re not on the same page with your love and money it’s easy to see how a relationship won’t last, married or not.
Related: How To Keep Debt From Causing A Marriage Crisis
By the sounds of it this couple does not use a budget and certainly would benefit from using one but not until they sort out who pays for what. When I lived with my ex-girlfriend we split living expenses equally and all other household costs including groceries, petrol and insurance for our vehicle.
I was the frugal-minded boyfriend and she was the spendy-girlfriend who moaned about not being able to go out and party and buy new clothes every couple of weeks. We were not rich, we had debt and she was more interested in spending money than saving money.
Related: How to prevent money secrets in your relationship
She was immature when it came to finances and didn’t quite get how it all should go down when you move in together. We were not married but it sure did feel like it especially when we were dividing up everything once we split apart from personal debts we continued to carry. This is why it is critical to keep tabs on what you have and dates so you’re prepared in the event something should happen.
Know the laws
There’s no reason you can’t protect yourself and spend some time doing research about moving in with someone or even talking to a lawyer.
Laws around the world are different for couples who move in together so it’s important to find out what could happen should you end the relationship. There is a difference between living together for a few months compared to years as determined by common-law so you should know your rights.
If you read what I’ve said so far it leans towards documentation. This is great if you’re organized and you should be. One of the most important things I didn’t read in her question was why they waited until the moved in together to discuss financial obligations. This is like buying the car without even test-driving it. It could be a lemon.
Taking time with your partner to discuss finance before co-habiting is crucial to the success of both your money management and relationship. Money messes and relationships go together so if you can avoid that mess, do it. Any debt that is in your name you are responsible for paying even if you split up. Any assets that are in both of your names would have to be split equally.
Related: Why you should review your automated payments for errors
When my ex and I lived together we didn’t budget our money but I knew what was coming and going from our bank accounts more than she did. That was a mistake she made. Both parties should review the bank accounts as often as they’d like and know the financial in’s and out’s. Inevitably, being mindful of your financial health is imperative. You always want to be prepared for the worst with an emergency savings fund each. You’re not married, but even then you’re still not guaranteed a life of love and financial bliss.
Splitting living expenses
You’ve just moved into an apartment and you haven’t talked about who pays for what and the time has arrived. Sit down at the kitchen table and talk about starting a budget even if for groceries. Generally, each person would pay half the rent, half the utility bills and other costs that come with renting including parking fees if used by both.
Related: How we designed our 10 Step Budgeting Series
I’m not a believer in splitting living costs based on income because your utility company doesn’t care how much you earn, they just bill you. The same goes for moving in together, the rent is a bill so you just split it. If the person in the relationship who earns more money wants to pay more that’s their choice. Rental money is money you’ll never see it again anyway so it’s not like you have any equity like you would if you owned a house.
You need to know all of this stuff before moving in but if you missed this step then keep in mind that your living expenses are for two people and should be paid equally by both. If all you want to do is have a grocery budget this works too because food is an expense that people often over-spend on. The food rules should be simple, split 50/50 unless you are buying stuff that falls outside of the regular grocery shop.
Planning and making lists
We are a list family if you haven’t figured that out by now. Our list of free downloadable tools have grown exponentially over the years because they work for us. Once your weekly, bi-weekly or monthly meal plan and grocery list is complete anything you add for yourself above and beyond that should be paid by you.
For example, if I were to purchase a bucket of protein powder at the grocery store that was for me then I’d pay that cost. I wouldn’t expect my girlfriend to take that on and the same goes for any personal items she would buy. Groceries are food and household supplies. Health and beauty are personal items that I feel should be paid by the one making the purchase.
Another example would be if you have no home phone or cell phone but your partner does that doesn’t mean you should pay half for it. Unless you are using that phone number as your personal number then the debt is paid by the owner of the phone. If you both decide that the cell phone is your home phone then yes you would split the costs of the phone even if you don’t carry it on you all the time.
Related: How to haggle with your communications company
If you have one vehicle used primarily by the both of you then you should both be paying something for that vehicle. There is no free ride unless it’s given to you by the person who owns it. Even then it should never be expected. At least help pay for the expenses even if it is gas and parking.
You may be reading this and have or currently do something different that works for you but if there is an agreement between couples that’s what matters most. Even though the small amounts of money that being spent add up if you both manage your money separately the last thing you want to do is go broke for your partner.
Relationship Rules Before Moving In Together (or after if you forgot)
- Initiate money conversations
- Talk about living together- fears, doubts, excitement, likes and dislikes, pet peeves etc.
- Don’t make money demands based on income level as you should be treat moving together like roommates in a marriage-like arrangement. Split the bills as determined above.
- Create or download a budget so you can document your financial journey together.
- Come up with a financial understanding of how the household bills are paid including how you will handle billing or utility increases.
- Most of all, love each other and treat each other respect. Money is just a survival tool but used correctly it won’t squeeze its way in to destroy a relationship.
- Did I mention communicate? Lots of it, always. Stop trying to read minds and if you’re worried or don’t think the relationship is working out then you know your options.
To CW.
Instead of worrying if you’ve made a mistake worry about what you can control. What you can do now is talk to your partner and apply simple relationship rules that includes a monthly budget. If he is as frugal as you say then I’m sure he will have no problem talking about ways to save money together.
Household bills have to be paid until we die no matter if we live with someone or not. Starting off living together on the wrong financial foot could cause a blip in the relationship but sort it out like adults and you’ll find your balance.
My most important piece of advice to give is that you both get tenants insurance for your apartment. For such a low cost to protect what you own, it’s worth it.
Discussion:
- What advice would you give to CW?
- What worked/works for you?
- Do you still split the bills after you married?
Do you have a story or a question you’d like to share on CBB? Email me at [email protected]
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