His, mine, and ours: financial tips for living together

Relationships, Money, Real estate

You and your significant other have made the leap and are living together. You’re enjoying having your clothes in one place, waking up together every morning, and having dinner together at the end of the day. It’s all pretty wonderful.

But there are a few important details yet to be worked out. You’ve probably agreed to share living expenses, but what exactly are you splitting and how are you going to do it?

Define your shared expenses

There are a number of legal agreements that you might potentially have to create with your partner when you decide to live together, depending on the circumstances. Did you buy a house or a condo? You might want to review how that works in the property title. And you might want to think about creating or changing your will, particularly if there are kids involved.

It’s great to say “we’ll just split it all,” but you need details to actually do it. Make a list of the living expenses you plan to share. This might include rent, renter’s insurance, utilities, cable/internet, groceries, building fees, cleaning supplies or costs, and more.

It can be helpful to make a spreadsheet of the costs over the past few months so you can both see what the average will be. Be equally clear about expenses you won’t be sharing, such as individual cell phones, credit cards, clothing, dining out separately, and gym memberships. A cohabitation agreement can help you sort out all the details.

Decide how to move money

There are a few ways to handle the actual payment. You could set up a joint bank account to cover shared expenses and agree you will each contribute a set monthly amount. Or one person could pay for the ongoing joint expenses, and then at the end of the month you tally all the costs and the other person pays their share.

Alternatively, you could decide you’ll each be solely responsible for certain bills. The important thing is that you are clear about how, when, and where the money will move, so that you don’t have any misunderstandings.

Talking through the issues of shared expenses will help ensure your life together will be smooth sailing.