How to Split Expenses When Living Together: A Valentine’s Day Guide

Moving in with the love of your life is a beautiful thing. You get to share cozy movie nights, breakfast on Sunday mornings, and of course… the bills. While splitting expenses isn’t the most romantic topic, getting it right can save you a lot of stress and even strengthen your relationship. So, in the spirit of love and financial harmony, here’s a guide on how to fairly divide expenses when living together—plus some money-saving tips to help you both build a secure future.

Have an Honest Money Talk

Start with an open conversation. Discuss your income, debts, and spending habits. You should also decide on shared financial goals. Be specific! Don’t just say you want to buy your own home. Say that you want to save a specific amount, by a specific date, to use as your downpayment.

Be aware of any potential red flags. If your partner is a big spender and you’re a big saver, you need to work out whether you can compromise. We know some people find it hard to talk about money, but this conversation can prevent a lot of financial distress and heartache in the future.

Choose a Fair Method to Split the Bills

 There is no ‘right’ way to split your bills, but here are a few common options:

• 50/50 Split: You each contribute an equal amount to shared expenses. This works best if you both earn roughly the same income.
• Income-Based Split: If one person earns significantly more than the other, splitting expenses based on income percentage might be fairer. For example, if one partner makes 70% of the household income, they contribute 70% to shared costs.
• Expense-Based Approach: Some couples divide up expenses based on responsibility. For example, you might cover rent while your partner handles groceries and utilities.
• Joint Account System: You both contribute a set amount into a joint account, which is used to pay for shared expenses. The rest of your money stays separate for personal spending.

Save Together

The couple that saves together, stays together. But instead of parking your money in a bank account and hoping for the best, consider how you can supercharge your savings. Consider setting up a joint fixed deposit (FD), where you both contribute a certain amount. Here’s why a fixed deposit is a smart choice:

• Higher Interest Rates: You get higher returns than a savings account, helping your money grow more over time.
• No Risk: Unlike stocks or cryptocurrency, your money is secure. There is literally no risk since your deposit is guaranteed up to $200,000.
• Financial Flexibility: You can choose to open short-, medium, or long-term FDs, depending on your goals and financial situation.
• Affordable: You can open an FD with as little as $1,000. So even if you’re not swimming in cash at the moment, you can still start saving.

Expect the Unexpected Expenses

If you experience job loss, serious illness or injury, or significant damage to your home or car, you’ll need to cover urgent, unplanned expenses. That’s why you and your partner should create an emergency fund. Your emergency fund should comprise three months to one year of living expenses, put aside in an easily accessible account.

Couples without an emergency fund can often resort to high-interest loans or credit card debt in difficult situations. Then, they may be saddled with years and years of repayment. Plus, money problems lead to more fights! You never know when you’ll need your emergency fund, so start saving today.

Bottom Line

Money can be a sticky subject for couples, but together you can build a culture of open communication, equitably splitting living expense, and saving together. This Valentine’s Day, give yourself and your partner the gift of a happy, financially stable life together, and maybe some chocolate too.