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A financial guide to moving in together

About to take the next step? Here’s the lowdown on making a success of living together

By Esther Shaw

Published: 16 August 2021

Close up of female hands holding phone and a takeaway coffee

Moving in together is a big decision – and a big commitment.

It is a step that some will take ahead of getting married, while others will choose to cohabit without ever tying the knot.

If you are thinking about living together, there’s some key considerations you need to make when it comes to your finances. We take a look at some of the things you need to think about.

Are you happy opening a joint account?

When sharing a home, it can help to have a joint account with your partner for all the household bills. With this set up, both of you pay into this account each month.

But having got this in place, you then need to decide whether you want that joint account to be the home for all your finances, with everything going into, and coming out of, that one same pot – or whether you’d like to keep some independence.

Would you rather keep finances separate?

One option may be having a joint account just for bills for the shared outgoings, but then having individual personal accounts for everything else.

This gives each partner control over their own money, and means either of you can make purchases without having to be accountable to the other.

Some couples may decide they would rather have no joint account at all.

How are you going to split the bills?

When it comes to the rent, the mortgage and outgoings, such as the gas, electricity, water, broadband, council tax – and insurance premiums – you need to decide whether to split them equally, or based on your income.

If one of you earns significantly more than the other, the situation can get tricky.

The key is to find the set-up that works for both of you – and one that won’t cause arguments.

Who is going to be responsible for bills?

The best approach is to sit down together and set up direct debits for all the household bills. This will ensure no payment gets missed or forgotten.

Where possible, arrange things so the payments go out of the joint account on payday. If your finances are entirely separate and you’re going to be paying the bills, get your partner to set up direct debits to your account.

Who is going to be responsible for budgeting?

If one of you is better at money management, they could take the lead when it comes to budgeting. That said, it’s important that not all key financial decisions are left to one person. You both need to be involved.

Becoming financially linked

Be aware that when you take out any financial product with another person, you then become ‘financially linked'. 

This shouldn’t be a problem when things are going swimmingly, but if your partner starts missing bills or running up debts, this can have an impact on your credit record. This, in turn, could harm your ability to borrow. You need to bear this in mind before signing up to any joint financial product.

To find out more about credit scores – and ways to boost your rating – visit our Credit Monitor tool.

Do you want a joint mortgage?

If you are buying a home together, or planning to at some stage in the future, you will probably be thinking about a joint mortgage.

As mentioned above, this ‘joint’ product will mean you are financially linked.

Buying together is a big financial commitment. Full financial transparency will be required, along with some frank conversations.  

Declaration of trust

When buying with someone else, it’s a good idea to have a legal agreement, such as a ‘declaration of trust’ in place to outline how things would be divided up if you go your separate ways.

Consider a cohabitation agreement

In addition, you may want to go one step further with a cohabitation agreement. This will set out how much each partner has paid in. It will also cover ongoing costs, such as mortgage repayments, repairs or renovations – and even utility bills. The aim is to avoid possible disputes should you decide to split at any stage.

How will you go about saving together?

If you are planning a future together, you’ll need to give some thought to amassing savings for both the shorter term and longer term.

As a couple, you will need to find a way of aligning your individual attitudes to spending and saving.

This will help you find a way to build a nest egg, perhaps to fund a wedding, cover the costs of bringing up children, move up the property ladder – and ultimately to ensure a comfortable retirement.