How I Share Finances With My Partner When I Earn Less
In an ideal world, our expenses would magically pay themselves and we would never have to worry about rent, bills, or choosing between buying a carton of beer and keeping the power on. But sadly, we don’t live in that delightful wonderland, and sometimes, dealing with finances can be confusing and difficult. That struggle can become even more real when you move in with a partner and have to figure out how to juggle financial commitments and your relationship.
There’s a lot to think about before you move in with someone: what area you want to live in, what furniture you need to buy, how to tell your partner that his 57 basketball posters will not adorn the walls in your home. And then, there’s the big one: who is going to pay for all the stuff? Are you going to split everything down the middle, pool all your money together, is one person going to pay a bit more? So many adult decisions to make.
When I moved in with my partner almost a year ago, my finances were in OK shape. I didn’t have too much debt, I had a little bit of savings stashed, and money coming in. But within six months or so, my work situation had changed, and my bank accounts had become a tumbleweed-filled post-apocalyptic wasteland. Things had to significantly change for us on the financial front – and I didn’t quite acknowledge this fact until I was freestyling through a large pool of debt.
When we first moved in together, we shared almost everything straight down the middle. It was never something we spoke about explicitly, just something we automatically did and felt comfortable with. We took turns paying the rent, and were both in charge of a few bills. All the other stuff – going out, holidays, food – didn’t really matter, it was whoever’s wallet was closest. These days, things are very different.
While I build my earnings back up and clear debt, my partner covers most of the rent and I pay for bills, most of the groceries, and sling him extra money if I can. We have to communicate a lot more about money and who has what, and learned a whole lot of lessons along the way.
So, here are some tips on navigating finances together – particularly if your paycheques are worlds apart.
Sitting down with your partner for a little chit chat about finances is probably not at the forefront of your mind. If you’re just moving in together, it’s likely that toilet habits and how long you think it’s OK to leave the dishes in the sink for are your main concerns. Financial ground probably hasn’t been covered much, but it has to be done.
Make sure you both know what the other is earning on average, and how many other expenses you have (debts, car payments, credit cards etc). Be honest about how much you are likely to have to spend on rent and bills each month, and what you expect of each other in the long run. Most of all, make sure you let your partner know if things change financially – for the better or worse – and keep having open discussions about how to manage the day to day money stuff. Not telling them a change in your finances because you feel bad or don’t want to stress them out doesn’t cut it. You need to communicate.
Figure out how you both view money
Are you both generous, or is one of you a bit more frugal when it comes to your own money? Perhaps you’re both a bit protective with your hard-earned funds? In that case, you need to do a bit of a rethink, because there’s two people at this party now.
No matter what your personal view on money is, you need to chat with your partner to find out how things are going to work in your relationship. Will you keep things separate for a while and figure out how best to cover the bills? Will you go by the ‘my money is our money’ adage? And for the partner that does earn more (particularly if it’s a significant amount), are they going to be comfortable with forking out more of their income to cover your collective expenses? You need this to be a clear choice they make, and have an environment where it’s safe to express concerns and work through any issues.
Delegate certain areas
In your (hopefully) regular chats about finances, figure out who is going to be in charge of what. Who will be paying the rent, who will take each bill, and what happens with groceries and ‘going out’ expenses? This will be different for every couple, but this is where it’s important to make sure that your earnings are out there on the table so you know what you’re both working with.
If you are the partner who earns less, figure out how much you can spare each month. It’s likely that you’ll be more capable of paying a bill or two, or covering the groceries, than taking on the rent each week. Delegating each important bill or payment is also vital in making sure that everything actually gets paid, rather than assuming that the other person is dealing with it.
Know the legal stuff
As soon as you start living with a partner, it becomes a de facto relationship – which means that in the eyes of a whole bunch of government and private institutions, your assets are their assets and vice versa. The same goes for debts. Make sure, when you start buying big stuff (cars, houses etc) you put both names on the ownership papers. When you’re setting up services like electricity, internet and gas, put both your names on the account so that you’re both responsible.
Do your research and be careful when it comes to things like joint personal loans and credit cards: if something happens and your partner defaults, you will be liable for the payments.
Yep, this is a lot to think about, but it’s all super important in not only ensuring that you are both financially stable and everything is getting covered, but in making sure that you are open with each other and reach a happy medium when it comes to money. As usual, like mum says: honesty is always the best policy.
Chloe Papas is a journalist and writer based in Victoria. You can find her on Twitter here.