How to Manage Household Finances if You're Not Married

Whether you’re an unmarried couple or you live with a roommate, sharing a home creates some areas of friction.

One way to grease the skids is by building a household budget together. Deciding who pays what can prevent arguments, resentment, and frustration. It can also help you both build better financial wellness.

1. Talk About Your Finances With Your Partner or Roommate

Talking about personal finances with an unmarried partner or roommate can be uncomfortable, but it’s an essential step in managing shared finances. It’s also not a one-and-done deal. You’ll need to keep having conversations as long as you’re sharing a household because things will change and you’ll both have to adjust.

Start talking money before you move in together. That way, you can make decisions that fit with your individual and shared financial goals. You can begin by:

• Defining where you are financially — whether you have debt, how much, what kind, and your debt-to-income ratio. Consider your credit scores, savings, and income, too.
• Explaining your financial goals. You might not take retirement planning as seriously as your partner does. They might have a goal of buying a house in 5 years. Those differences are OK, but you need to know what you’re each working toward individually and decide what you’re working toward together.
• Describing your values around money. We all come from different backgrounds and experiences, and that changes how we value money. Understanding your partner’s relationship to it can help you better understand differences in how you spend, save, and plan financially.

If you find it hard to bring up finances, start by giving your partner or roommate notice that you’d like to talk about money. Start slowly and build trust. Be respectful and stay open-minded. Like other areas of your relationship, discussing money is something you’ll likely have to work on.

2. Create a Household Budget

Creating a budget for your household is similar to creating a budget for yourself. You’ll start by listing all the monthly expenses related to your home. It may help you to think about these costs by category:

• Essentials: These are costs you absolutely have to pay to live in a place, such as rent or mortgage payments, insurance, and any fees for things like parking, trash pickup, or an HOA.
• Utilities: This includes power, water, and internet.
• Maintenance: These are costs to keep up a property and are probably more relevant to homeowners than renters. This can include yard maintenance, snow removal, extermination fees, routine maintenance (on things like HVAC systems or gutters and roofs), and occasional repair services.
• Groceries: If you share groceries, you’ll need to include them in your household budget. Even if you don’t share food, you’ll probably share things like toilet paper and you’ll need to plan for who will cover those costs.
• Amenities: You may find that you and your partner or roommate want to share some non-essential things that make your place feel like home. That could be anything from streaming services to the monthly game night you throw for your friends. Only include items in this category if they are things you share and both plan to contribute to.

Once you list out all your expenses, add them up. The resulting number is what it costs to operate your household for one month.

3. Decide What Expenses Stay Separate

You and your partner probably won’t want to split all your expenses. You’ll likely maintain things like your car, car insurance, student loans, and credit card bills yourself.

This is obvious if you’re living with a platonic roommate or sibling, but it can be fuzzier with a romantic partner — especially if you see marriage on the horizon. It’s a good idea to outline what you won’t combine so there’s no confusion.

For example, there may be some expenses that are important to your roommate or partner that you don’t want to share. Maybe it’s the new meal kit delivery service everyone’s talking about, or a gym membership, or a subscription that they just have to have. Whatever it is, it’s important to decide what you each will and won’t pay for.

4. Calculate Your Share of Costs

You may decide you want to split all household expenses 50/50, and this works well if both people earn about the same. But if one person earns substantially more than the other, an equal split can cause tension. After all, you’re not just paying for housing and food. You’re probably both also saving for travel, paying off debt, and putting into retirement — and doing all that can spread a paycheck thin.

If you’re living with someone whose income is higher or lower than yours, there are other ways to split your costs that take the burden off the person earning less.

Contributing Based on Income

One solution is to split expenses by percentage according to how much you each earn. Don’t let the math here worry you — it’s very simple:

1. Add up your combined income.
2. Figure out what percentage of the total each person makes.
3. Add up all your shared monthly household expenses.
4. Multiply your total household expenses by the two percentages from step 2. The result is how much each person should contribute.

Example: Consider Jose and Zuri. Jose makes $40,000 per year and Zuri makes $50,000. Together, their combined annual income is $90,000 and their monthly household expenses come to $2,000 per month. Here’s how much each should pay:

1. Jose’s $40,000 + Zuri’s $50,000 = $90,000 combined income.
2. $40,000 divided by $90,000 is 0.444, so Jose earns 44% of the combined income. $50,000 divided by $90,000 is 0.555, so Zuri earns 56% of the combined income.
3. Jose and Zuri’s combined monthly household expenses are $2,000.
4. $2,000 times 0.44 is $880, which is Jose’s share. $2,000 times 0.56 is $1,120, so that’s what Zuri will pay.

Contributing Based on Square Footage

Another option that works for some roommates is splitting the cost of utilities and amenities equally, but adjusting rent (or mortgage contributions) based on square footage. The roommate with the larger bedroom will pay more of the rent while the roommate with a smaller bedroom pays less.

This can be a good way to ease the burden on a roommate who earns less, or to make things fairer for the roommate stuck with the lesser bedroom. Here’s how to calculate what each person pays:

1. Divide the square footage of your home by the cost of your rent or mortgage payment. This gives you cost per square foot.
2. Measure the square footage of each bedroom (length x width = square footage). Depending on what kind of closets you have, you may want to include them, as well as any en-suite bathrooms.
3. Multiply the size of each bedroom by the cost per square foot. This gives you the cost of each bedroom.
4. Subtract the total cost of both bedrooms from the total rent you pay. This is the cost of the remainder of your home.
5. Divide the cost of the rest of the home by 2, since each person will pay half.
6. Add the cost of your room and your half of the cost of the rest of your home. That’s your share to pay for your home.
7. Divide all other costs (rent, utilities, and any amenities) in half and add to your share of the rent or mortgage.

Example: This is how it works for Nala and her roommate Chloe. The two women share a 1,200 square foot apartment that costs $1,500 per month. Nala’s bedroom is 300 square feet while Chloe’s is only 200. This is how they calculated their share of rent:

1. 1,200 square feet divided by $1,500 per month is $1.25 per square foot.
2. The women measure and find Nala’s room is 300 square feet and Chloe’s is 200.
3. Nala’s room is 300 square feet. Multiplied by $1.25, her room costs $375. Chloe’s room is 200 square feet. Multiplied by the cost per square foot, her room costs $250.
4. Together, Nala and Chloe’s bedrooms are 500 square feet, which leaves 700 square feet for the rest of the apartment. Multiplied by the $1.25 per square foot cost, the shared part of the apartment costs $875.
5. The women divided the cost of the shared living space ($875) in half, meaning each pays $437.50 for access to the kitchen, living space, bathroom(s), so on.
6. Nala’s total cost is the price of her room ($375) plus her half of the cost of the rest of the apartment ($437.50). That mean’s Nala’s total cost is $812.50. Chloe’s cost is her room ($250) plus the cost of the rest of the apartment ($437.50), for a total of $687.50.
7. Nala and Chloe divide all other costs (utilities, amenities) by half and add to their share of the rent.

5. Determine Who Pays Which Bills

Once you both know what you’re each paying to live together, you still need to decide who will write the check or login online to actually pay each bill. Maybe it’s easier for your partner or roommate to give you their share and have you pay the bills.

Whatever you decide, it’s important to have a system in place so everyone knows who’s responsible for what, when, and how those bills are being paid. You can do this in a few ways:

• Create a shared calendar with each bill marked on the day it’s due
• Make a shared to-do list you can mark off as the bills are paid
• Make a spreadsheet showing the bill, its amount, its due date, and who’s paying it

6. Should I Combine My Money With My Partner’s?

Sharing a checking account works for some couples, while others do better with separate accounts. It depends on how you spend money and how much control you each want over your own spending. Trust plays a big factor, too, in how successful you’ll be sharing one account.

If you decide to share a joint account, there are things you should discuss first. Settling these things upfront will help you avoid overdrafts and shortages that can derail your financial goals. Things you should discuss include:

• Rules for how you each spend from the account
• What you put money toward first
• Who pays the bills
• How your household budget works

You Can Partially Combine Finances

In some cases, it’s easier for each person to keep their own account and open a third, joint checking account together exclusively for covering household expenses. You can each put your share of the rent/mortgage payment, utilities, and other shared costs into this third account and pay your shared bills from there.

This method simplifies bill pay while still giving you each control over most of your individual finances. And if your relationship doesn’t work out (or your roommate moves out), it’ll be easier to divide up your assets.

But if you’re not ready for joint checking, peer-to-peer payment apps (like Zelle) can make it simple for one person to transfer their share to the other person, no extra account required.

Combining Finances Isn’t Right for Everyone

Married people have certain protections  single people don’t when it comes to combining finances. For that reason, some experts suggest waiting until you’re married to combine finances. That may not work for every couple in every situation, though. Use your best judgement in determining whether, when, and how quickly to combine finances.

And remember, combining finances (or not) doesn’t say anything about your relationship or how serious it is. Some married couples live their whole lives without combining finances because that works for them. 

The Takeaway

Even once you’ve created a joint budget and set up any new accounts you’ll need, the work isn’t done. Find a system for staying on the same page with your partner or roommate. That might mean setting aside an hour once a week (or however often) to talk about money. As long as you keep talking and tweaking your system, your finances should keep running smoothly.