Five steps to make sure moving in together isn't a financial mess

Hayley Millhouse
22 March 2019

Whatever your age or personal situation, moving in with your partner is a big deal.

While it is an exciting step forward for your relationship, it can also get messy quickly if you’re not careful with your finances.

But following these five steps will help you achieve a healthy relationship with both your finances and each other.

1. Honesty is the best policy

Discuss your income and financial goals

Money isn’t the easiest topic to approach in a relationship.

In fact, according to a Wells Fargo survey, it’s actually even harder to discuss than death, politics, or religion. But although avoided by many, it’s important to get a clear picture from the start.

Have an honest and open conversation with your partner about each other’s income, and what you can and can’t afford.

It’s also sensible to agree what you are and aren’t happy to disclose when it comes to salaries, bonuses, expenses and purchases.

Talk to each other about your own financial goals, and also what you both want to achieve together. Agree an amount each of you is happy to put in a savings account or piggy bank and stick to it.

Doing this over a period of time will also make things like booking a holiday less stressful, as you have already put in the legwork to mutually put money aside for it.

2. Budget before you buy

Consider the housing extras

First thing’s first. If you’re considering buying, you should speak to a mortgage advisor in advance. They can help you get a clear idea of the amount of time it will take you to save for your deposit and advise you about any obstacles you may face along the way.

Then, regardless of whether you buy or rent, consider a realistic budget for living that won’t put either of you under a financial strain.

Do your research to find out how much you could save on rent or a mortgage by living in the suburbs rather than the city centre. But, also be mindful of the increasing cost of a commute the further out of a city or town you live.

Apps like Citymapper and Trainline are useful for viewing the quickest routes and comparing the cost of different modes of transport, which may inform your decision about where you live.

It’s also important to consider life insurance as you begin to depend on your other half’s portion of the rent or mortgage.

3. Divide and conquer

Have a separate joint account for rent and bills

When you live with other people who contribute to bills and rent, your bank statements can become a mess of different transactions and transfers.

The easiest solution to this is to set up a joint account for the household direct debits. Both you and your partner can transfer a set amount to the joint account each month after pay day.

Whether it’s the same amount each, or an agreed percentage of your salaries should one of you earn considerably more than the other. Taking the time to keep a budget of each outgoing will help you accurately manage and account for all bills.

Before you take this step, however, it’s important to remember that opening a joint account is another big step, as you will become financially linked to your partner. The Money Advice Services guide on joint accounts is really useful to help you understand exactly what you’re signing up for.

Remember too that shopping around and online comparison services will allow you to compare costs from different utility providers at the click of a button, so you know you are getting the best deal in the market.

4. The little things count

Splitting the cost of everyday items

As well as rent and utility bills to think of, everyday items such as cleaning products and groceries can soon mount up.

There are a number of tools like Splitwise, Venmo or Billr you can use to keep tabs on who has bought what so that one person doesn’t always end up buying the bulk of products.

5. Protect against the unknown

Save a cash buffer

As well as thinking about saving for holidays or big milestones like buying a house, you should also put aside some money to act as a cash buffer. This can be used to pay unexpected bills or a car breakdown, meaning you always have something to fall back on.

Any amount you can afford to put aside is a great start, but eventually aim to have three months’ worth of outgoings saved for an emergency.

This might be a joint saving, or you may decide it’s wise to have a pot of emergency money each, should you want to move out.

Moving in with someone is a big commitment and it can take time to adjust, especially when money is involved. Start this new stage of your relationship as you mean to go on. With open discussions and working together, you can’t go far wrong.

Hayley Millhouse is head of advisory services at OpenMoney and evestor