Tips for having “the money talk”

Moving in together? Here’s some advice for discussing finances and money management.

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Cohabitation — or living with your partner before tying the knot — has increased by nearly 900% over the last 50 years. In fact, data shows that roughly two-thirds of new marriages are couples who lived together beforehand. If you and your boyfriend or girlfriend have decided to move in together — congratulations! But before you share the same address, make sure you’re on the same page when it comes to money.

For many people, talking about money can be a bit uncomfortable. But it’s important to know where you each stand on key financial issues — it can prevent arguments down the road. Here are four tips for having the discussion and figuring out how to split expenses.

1. Figure out a budget

Sure, Netflix is great, but can you realistically afford the extra cost each month? If you talk about and set a plan for all ongoing expenses before moving in, the transition can go much more smoothly. And establishing a budget is simpler than it sounds.

Start by working with your partner to make a spreadsheet for all your monthly expenses — things like rent, utilities, food, loan and car payments, and any extras or nice-to-haves — to see the whole financial picture. But the budget should go beyond typical monthly expenses, especially if you’re saving for a big purchase or special event. “Definitely make a budget if you want to buy a house or go on vacation together,” says Traci Gakenheimer, a 22-year-old who now shares an apartment with her boyfriend of two years in Portsmouth, New Hampshire. “You’ll need to save money, so budgeting is a necessity.”

2. Split the chores — and the bills

So you’ve decided you’ll wash the dishes if your significant other puts them away, but who takes the lead when it’s time to pay for groceries? There’s no set rule about how to split bills — you just have to figure out what makes sense in your unique situation. You could split everything 50/50, pick and choose, or you could do it based on a percentage. For instance, if you have a higher income than your partner, you might opt to take on a larger portion of the monthly bills to compensate for that difference. Traci and her boyfriend figured out a plan that worked for them: “I took on the utilities, such as electric and cable,” says Traci, while her boyfriend pays the rent each month because he has the higher income.

3. Decide which account: Yours, mine, or ours

There are a few ways you can address actually paying the bills. Once you’ve figured out who’s paying for what, you can each pay directly from your own accounts. Or maybe you’re more punctual with deadlines — in that case, you might want to be the one who pays the bills and then figure out a day each month where the other person transfers over their share.

Another option is to create a joint bank account to which you both contribute money. The money in the account would be used strictly for paying your monthly joint living expenses and bills. A benefit of a joint account is that it would exist purely to cover your shared expenses but you’d each still have your own individual accounts that you can use for outside purchases — gifts, splurges, etc. — without affecting the other person. And you may want to consider setting up automatic bill pay, so it doesn’t fall on one person to sign in and pay the bills each month.

4. Talk openly and be adaptable

It’s important to not make the topic of money taboo — keep an open line of communication. Talk about your financial goals — individually, and as a couple. Talk about what your individual relationships with money are like, as well. You might find that you’re a saver and your partner is more of a spender, and that’s OK. “I’m a much better saver,” says Traci, “so I’ve been the one watching our expenses and making sure we’re putting away money so we can eventually afford a house.”

The key is to be open about it, compromise, and find a plan that suits your relationship and situation. And remember, nothing is set in stone. If your original plan isn’t going well, make adjustments. After all, you’re not just roommates — you’re a team.

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