As our own relationship has progressed through courtship and into engagement, the fiancee and I have recognized the need to have at least one joint account. On the one hand, it fulfills the practical need to have a place to deposit joint income, receive joint gifts, pay joint expenses, and work toward joint financial goals. On the other hand, it helps us progress toward the equally important symbolic purpose of merging our lives together as two become one.
But our situation is counter to the norm among our recently married friends — nearly all of whom moved in together long before they got engaged. These couples also shared expenses long before they joined finances.
For me, one of the more interesting question comes up when one party to the relationship makes significantly more than the other.
Picking and paying for an apartment
As a single person, it’s always been pretty easy; I just looked at my own income, set a budget, and found a place to live that fit within that budget.
Let’s talk rent shared between a couple where the woman makes four times as much as the man. Suppose that they’re looking at a $1,000 apartment.
But in a couple with disparate incomes (i.e. one where she makes significantly more), you’re left with two options — both with their own shortcomings:
- Split rent proportionally. With this method, his smaller income means he gets to pay a smaller share of rent. If they managed to find a $1,000 apartment, he’d win the rental lottery by only having to pay $200 toward housing every month.
- Split rent evenly. With this method, the couple would ignore the difference in their incomes and each pay the same amount. One way to do this is by simply doubling what he and his lower income could afford. The primary shortcoming I see with this method comes with both parties knowing that they could be living somewhere safer or more convenient if she were willing to take on a slightly higher share of the rent, which her higher income would almost guarantee she could afford. The strongest temptation seems to be to just pick a place that he couldn’t sustainably afford.
Certainly this question would become moot if that cohabitating couple goes on to get engaged and later married and join finances completely, but I know plenty of former couples who have lived together and moved out before even coming close to engagement.
I’m totally stumped as to which rent splitting option is better. For those of you who moved in together before joining finances, what did you find worked best for you?