It can be exciting, moving in together or buying your first shared home, but with that comes bills, and somehow you’ve got to hash out how you pay them in a way that works for both parties, ideally without causing tension.
“Money is so emotional, but you have to be incredibly practical,” says Vix Leyton, consumer expert at thinkmoney. “The key thing is to be honest about your financial situation. It’s not a sexy, fun conversation for couples to have, but ultimately, you need to know what each person is earning, what each person can afford, and also their attitude to things like savings and their credit rating.”
Practical options
There are a few solutions when it comes to how you manage your bills. “As a couple, you can split them down the middle 50/50, and you both pay 50% of everything. You can pro rata them, based on how much each person is making. You can take on specific bills, so one of you manages council tax and one of you manages the energy bills, for example. You can pool everything in a joint account. Or do a little bit of all of them,” explains Leyton. “I don’t think there’s a one-size-fits-all approach.”
And each has its pros and cons, depending on your circumstances. “50/50 can feel quite arbitrary. That probably works better for households that have the same income, but it’s difficult to quantify the things that go on in a household,” acknowledges Leyton, especially when considering emotional labour and childcare. “In households that are considering having a baby, [the solution you go with is] going to have to be recalibrated if you’re going down to one income,” she adds.
It might be wisest to “test these processes and see which one works best for you, and just be open-minded to making changes along the way,” recommends Leyton. “Every time there’s any change of circumstances, in the event of a job loss or a pay rise, review [your options].”
Maintain some financial independence
Regardless which solution you choose, it’s helpful to still have your own bank account. “I would counsel against running everything out of a single joint account,” says Leyton. “We don’t know what’s coming down the road, so it is useful to have your own accounts and have access to your own money.”
Also, with joint accounts, “you have to bear in mind you need to manage your own credit rating around that. If you’re managing all of your bills through one joint account, not only do you both become, effectively, financially married from a credit scoring point of view, which could have implications later down the line, but you may end up with not enough proof of your financial credentials to do anything that you want independently,” she explains. “Ideally, you would keep enough financial things in your name to be able to keep your credit score nice and healthy.”
Prepare for the worst
Sadly, there’s no guarantee you’ll live happily ever after. And you need to be aware of this, because “if the worst does happen, it’s a lot harder to extricate yourself,” when you’re financially intertwined.
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For instance, with bills, Leyton explains: “While you both might be responsible for them, ultimately, the financial and legal responsibility sits with the person who is named. Even if both of your names are on the bill, the [company] can come for the person that registered the bill. Similarly, if you’ve got a joint account and the overdraft needs repaying, there’s no recourse for you to tell the bank you’re paying half and they’re paying half. You are both responsible for the whole amount in that account.”
Split the financial admin
One of you might enjoy scouring comparison sites for the best deals, while one of you might be nifty at setting up spreadsheets. However you set up bills though, “you don’t want to be in a situation where if something happens, you don’t know where the logins are kept, you don’t know what agreements are in place, you don’t know how long those agreements are,” warns Leyton. “So if you are the person that steps back, puts their money in and the other person handles the administration, have a central document where you both know exactly what’s going on, and both have the logins. If it’s something you’re paying for, you’ve got a right to see it.”
Communication is key
Not talking through your shared finances can really cause problems. “When things are unclear, potentially it can create stress and resentment, so it’s good relationship hygiene to just keep checking in with each other,” says Leyton. “It’s hard to talk about money, even with the person closest to you, but it’s something you’ve got to get over. It’s a long road, if you’re planning to be together for life.”
She says planning ahead is vital, whether that’s thinking about your pension or buying a house together. “Have that financial planning session. Know what your goals are together.”
She adds that there are some “old-school tropes around how the man manages the finances and the woman manages the home, and we have to smash through those”.
“There’s no defined role in the household that you can’t review,” says Leyton. “There’s comfort in being a team.”