Weekly Pardee Blog Art 3-31-23 header

Shacking up? Our tips on moving in together to save money

Thinking of moving in with your partner to save money? Congratulations on this big step! Moving in together in today’s market can be a wise decision for your wallet, but still feel overwhelming. Even the healthiest relationships can feel the impact of stress from house hunting, merging possessions, and ultimately cohabitating.

While the financial benefits of cohabitation play a major role in how couples live nowadays, you shouldn’t forget that love comes before splitting the rent or mortgage!

Here are some tips to help you avoid relationship-related friction and save some money along the way:

Budget Before Everything

Whether you and your partner are buying or renting a property together, make sure to sit down and create a budget before beginning your search. Living in a city center might seem appealing at first, but it could increase your frequency of dining out and grabbing that latte – thus hiking up your monthly expenses. 

Choosing a location farther from the hub and commuting daily for work in the city might be smarter. The lower rent will offset the additional travel expense, and daily cost of living will also be lower. Other factors that may impact your monthly bills include building maintenance costs, council tax band, and travel costs – be sure to factor in those when budgeting with your partner. 

Decide How You Want To Split Your Finances

When it comes to paying monthly bills, don’t be surprised if the topic sparks some arguments. To avoid any unpleasant situations, try to proactively discuss how to split the rent, shared expenses, and bills, ideally before you move in. 

Are you planning to merge your finances? Should you invest in customized furniture or head over to IKEA? Creating realistic expectations from each other and being honest can help keep arguments about money at bay.

Get Your Spending and Savings In Order

A great rule to abide by when allocating funds is the 50/30/20 split. Reserve 50% for your basic needs, 30% for wants, and keep the remaining %20 in savings. So, if your wants list is too extensive for your savings, it may be time to rethink your priorities. Use budget worksheets or apps to keep a close eye on finances.

Keep a Separate Account for Bills and Rent 

When living with a partner who will also contribute to rent and bills, it can quickly become difficult to keep track of all the different transfers and transactions. Creating a separate joint account dedicated to only household expenses might be an easy solution to track things in a streamlined way. Just remember that both you and your partner will be responsible for any overdrafts or debts – and creating a joint account may impact your credit score, so think it through before jumping the gun. 

Create Financial Transparency

Be honest with your partner about your credit scores and debts, and ask them to do the same. It may be a sensitive topic, but it’s certainly needed to avoid ugly fights and confrontations later on. If you are thinking about buying a house together, keep in mind that lenders will consider both of your scores to analyze your mortgage application. If either of you has a high debt-to-income ratio, this could also affect your ability to buy a property. 

Discuss Your Contributions for Expenses

When moving in with your partner to save money, it is important to be realistic about each of your incomes and what you both can reasonably afford to pay. For example, dividing all expenses equally may not be the fairest option if you don’t earn equal incomes. In such a case, it may be best to work out a percentage or ratio that you each must pay towards household bills and luxuries. 

Build a Cash Reserve 

When you first move in with someone, it may take a little time before you can properly adjust to the new setting and get your money in order. However, it’s always best to ensure that you can save a little bit of money every month and build a cash reserve. It is recommended that you do this for at least the first three months by cutting down on discretionary expenses. This reserve can be used if and when unexpected expenses come your way. So, instead of saving 20% of your income in the first few months, you can try saving 30% or even 40%. 

Overcommunication is Key

Moving in together means there’s a lot to discuss consistently. You will learn more about your partner as you go, possibly even discovering things you didn’t know before. While some of those traits might be cute, others might be straight-up frustrating.

The key is to communicate everything: your boundaries, expectations, and all the other dos and don’ts. You shouldn’t only communicate how you want to split your finances but also your chores. Compromise will save you here. Maybe one of you enjoys doing the taxes, but the other gets a thrill from creating monthly budgets. Of course, this doesn’t just apply to finances but also to other household tasks like cooking, cleaning, and maintenance. 

Final Thoughts 

Moving together with your partner is a big step; it opens a lot of doors and provides a big opportunity to build greater financial stability and effectively meet your money goals. Honest, open, and constant communication is the bottom line. Besides deciding who will pay for what, create financial goals and budgeting plans representing the future that you wish to secure together.

Your goal should be to support each other in balancing expenses with savings, along with repaying debt and building a strong credit score. You may hit a few bumps along the way, but the key is to stay patient and persistent and make the most out of your given resources.