Are you thinking of moving in with a partner? Living with your partner before getting married has large implications legally, financially, and emotionally. Here are some tips that focus on the financial side of things that can transform one of the biggest stressors in a relationship into a key part of a successful and blissful relationship!

#1: Don’t immediately combine finances in a permanent way

Just because you are living together doesn’t mean that you legally must combine finances. In fact,

headaches and heartaches abound for those that decide to combine all their finances during their infatuation phase. If things end up not working out, it can quickly become a financial and legal nightmare. For this reason, it might work best to keep finances separate at first. As the relationship develops and you get to know each other’s money personality, then decide which accounts, assets, and liabilities make the most sense to combine or join.

Also, consider taking the extra step to create a legal document that details your financial arrangements, your obligations, and what would happen if you were to separate. This can be done with a cohabitation agreement. It becomes especially important when it comes to common law marriage states.

Your next steps:

Take this money personality quiz together or separately and share your results. You can explore this further in Step #3!

#2: Focus on splitting household expenses

Instead of immediately combining finances, first focus on splitting household expenses and consider one of these approaches based on the best fit for your relationship:

1) The split expenses equally approach: This works best for couples that make similar incomes. The idea is that you split household expenses like rent and utilities equally. Some couples might decide to split everything once bills come in or keep a joint account that is only funded with enough money to cover these joint expenses. Others may have one person pay out of pocket for everything and then collect a check from the other person or reconcile what’s owed at the end of the month.

2) The proportional to income approach: This works best for partners that make disproportionate income. This is the approach I have personally taken in the past. (It’s arguably the fairest!) The idea is that each partner pays a portion of joint expenses that are proportional to their income. For example, if you make $60,000 and your partner makes $40,000 then you would pay 60% of the total combined expenses.

3) The mental accounting/it all works itself out in the end approach (not recommended!): In an attempt to be “easygoing,” many couples start out this way. Partners try to mentally account for who paid what last or where one partner covers a high-cost item like rent or mortgage and the other covers everything else. Over time, one partner might end up paying way more, resentment builds, and the period of “keeping it easy” turns into money anxiety and relationship friction.

Your next steps:

Use a spreadsheet like this to track and list these joint/shared expenses.

Establish a joint account that is funded to cover common expenses as some expenses vary (gas, utilities etc.). Keep a 5-10% cash buffer in that account.

Reconcile the joint expenses every month. This step helps with budgeting and ensuring fairness!

#3 Have the money talk and create a financial plan

This is the key to ensuring that your partner becomes your best financial friend versus your worst financial enemy. It gives you the opportunity to get to know each other financially and then create a plan that can help you reach your goals faster.

Your next steps:

Set the ground rules for your talk. Pick a date and time where your calendar is clear, drink no alcohol until you celebrate after, and have no judgment. (Remember that you’re just getting to financially know each other.)


Tell each other your money stories. This step is where your money personality quiz comes in. You can add to this by sharing your personal and family experiences with money, biggest successes, and largest financial failures.

Take inventory of your finances and be transparent. Use a worksheet like this to organize your finances (credit score, income, assets, debt, insurance). The more transparent you are upfront, the lower the chance you’ll have of a problem festering into a catastrophe!

Discuss and establish your financial priorities and long-term goals.

Set monthly money dates in your calendars to stay on track.

You can use this resource for a more detailed guide on this.

#4 Plan for the worst

Even though we don’t like to think of it, there is the possibility that one or both of you pass away so you’ll want to ensure that you have a plan for what happens with your assets, especially if you have any children. This is where estate planning comes in, and it’s not just for the wealthy. It’s for everybody. First, set beneficiaries up for all your financial assets (insurance policies, retirement accounts, checking, savings etc.). Next, establish the big 4:

The will: Determines what will happen to your assets and who is in charge of seeing your wishes through in addition to establishing who will take care of your children.

Durable financial power of attorney: If you become incapacitated, this document ensures that a person you trust will make financial decisions on your behalf.

Healthcare power of attorney: If you become incapacitated, this document ensures that a person you trust will make healthcare decisions on your behalf

Living will: If you end up in the hospital in a serious condition, this document dictates your preferred standard of care.

Your next steps:

Call your financial services providers or login to their websites to establish primary and contingent beneficiaries on all your accounts.

Contact an estate planning attorney to get the big 4 legal documents established. You may have access to one via your legal EAP or legal insurance benefits at a reduced cost, and many employers offer legal document templates for free through them!

Living with your partner doesn’t have to be financially scary. For many, it can be a source of financial growth that can add to your relationship. Follow these tips and cohabitating with your partner can become a source of financial bliss where everything is always better when you’re together!


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