8 effective ways to manage your money when you move in together
You’ve decided to move in together! It’s a significant step in any couple’s relationship, and it usually signals that things are getting pretty serious. Living together means you get to spend more loved-up time with each other. It also means you’re about to find out all about those not-so-loveable habits and quirks of your significant other.
One thing is certain – you want to make sure that moving in together doesn’t leave you in a financial mess. Money issues can be a potent source of relationship conflict, so it’s important to ensure you’re both on the same page from the outset. Here’s how to make sure you’re in alignment with each other.
1. Discuss financial goals
As you begin to integrate your lives more closely, discussing where your finances are headed is a vital early step. If one of you is set on buying your own property in the next two years, but the other is more interested in spending six months travelling the globe, you have a huge conflict just waiting to explode. While it’s natural to have individual dreams, it’s important to discuss how these goals align with your shared financial well-being. Find compromises that allow you both to pursue your dreams without feeling like they are going to remain unfulfilled. Be clear about your major financial directions, as they will lay a strong foundation as you build your future together.
2. Discuss your financial responsibilities
Moving in together doesn’t mean sacrificing your financial independence. It’s crucial to have a conversation with your partner about how you'll handle financial responsibilities jointly. Decide who will pay for what and whether you’ll set up a joint bank account. This discussion should also cover any individual expenses and joint money habits, as well as how much you’ll each contribute every week.
From things such as your interests and personal growth (education or upskilling) to any debts or lifestyle choices, as well as keeping some money for your own spending - it’s important to clarify your joint money habits and how they impact your relationship.
3. Splitting costs or downscaling
A healthy relationship involves both partners sharing the financial burden. Consider splitting costs evenly or based on your respective earnings. It may not be fair to split expenses equally if one partner earns significantly more than the other. And look for opportunities to downscale (combining something you both enjoy rather than each paying separately). For example, if you both subscribe to multiple streaming services, consider joining forces and cancelling any that you don’t use.
Have an honest discussion about your income and your costs before (or as soon as) you move in. By finding a balance in cost-sharing, you'll ensure fairness and maintain financial harmony in your relationship.
4. Set up a household budget
If you prefer not to split individual costs, then setting up a joint household budget makes good financial sense. Compile a list of all common expense items such as rent, electricity, insurance and groceries. Once you agree on a weekly or monthly budget, you can decide how you’re going to share the costs.
5. Make big financial decisions together
When you’re emotionally and financially connected, any major decisions must be shared. Whether it's a significant purchase or investment, discuss these with your partner first and make sure you both agree. This inclusive approach will strengthen your trust and maintain transparency in any financial matters.
6. Keep a joint emergency fund
With the rising cost of living, it can be difficult to save for emergencies. However, having a safety net becomes more critical when you're relying on both incomes. If one of you becomes sick or unemployed, or if you’re hit with an unexpected expense, it’s important to have an emergency fund on hand to tide you over. Open a separate account for your joint emergency fund - and agree upfront exactly what constitutes an emergency. Think you can't afford it? If you both put just $25 each week into your emergency fund, in 12 months, you’ll have saved $2,600 - that’s a pretty handy safety net!
7. Don’t combine existing debts
If either of you has existing debts that are being paid off, don’t be tempted to merge them. It’s important to maintain your own credit identity and credit history, as any debts your partner owes could have an impact on your finances as a couple. While your partner's financial obligations may affect their contributions to household expenses, it’s best to keep your debts separate to protect both of your financial interests - no matter how close you are.
8. Follow the 50-30-20 rule
Managing your finances effectively requires discipline, but with thoughtful decisions, you’ll soon get into the swing of things. A good rule of thumb is:
- Spend 50% of your income on needs (such as rent and groceries)
- Spend 30% of your income on wants (such as ordering takeout)
- Use 20% of your income for savings (so you can afford a holiday or save towards a house)
Settle in together
Moving in together often comes with some added expenses, especially if you want to update your furniture or you need some new appliances. If you need a financial boost to help you settle into your new home, remember we’re here to help. Just take a look at our cash loans up to $5,000 to find out how quick and easy it is to get your hands on some extra funds. Once a loan is approved, the cash is usually in your bank account within a few hours - so you can enjoy your new home together!