When you take a decision of living together and not marrying, then it is better to not involve finances into the relationship. You may not have the same type of protection as when you were married. A household budget is basically designed to cover the basic expenses in the household. You can also do a household budget with your boyfriend when they or you move in. Until, the marriage try to keep the majority of the expenses separate. So here, are some tips on how to plan a budget with live-in partner.
Setting Up Budget With Live-In Partner
1Determine the Expenses You Will Share
The first thing you need to do is determine the expenses, that you must share as a part of the household. Basically, you may need to split the rent, basic groceries, and utilities. If you have pets, then you can also include the pet care, in the household budget with live-in partner. As a couple, sit down together and come to the mutual understanding on what you thinking must be covered under your household expenses.
You must have a small household emergency fund for emergency expenses. You must also agree, on the amount of rent that you are willing to share.
2Set Your Contribution Amount
According to some people’ssuggestion, you must share the fifty percent of your household expenses in the budget with live-in partner. But, it is not the best way to do. Often times, one person in the relationship makes more than another person, and the fifty percent of expenses can be little unfair to the person with less money. Contribution is better if the same percentage of your income is shared, and a better way to handle. In this way, it is better to contribute foreseeing the unfortunate eventuality of a split-upand cover the other expenses without being too pressurized on the monthly contribution amounts.
3Figure Out Your Contribution Amount
4Open a Separate Checking Account
Before you shift, you must remember to open a separate checking account, that toojust for the household expenses. You both must be the signers of the account and must set a date where you can make a deposit to the account to cover the monthly bills. Then pay for the expenses, that you have to include in the household budget with live-in partner from the account. This can be a protection for other money, if the partner makes any poor financial decision and it makes things easier to divide or split in the future.Covering the household expenses with this account can prevent from running up the credit card or even dripping into the savings to cover the shared expenses.
5Items You Are Responsible For
You must be responsible for paying for your own car, car insurance, and any other expenses. You must purchase your clothes, personal care items and many more. If you purchase any meal for you own, or for your friends then you must pay for it on your own. You are solely responsible, for any loans or credit card, that you have. You must cover your own medical bill and insurance. You must analyze the budget to be sure, that it is in line with proper percentages of spending and the savings.
6Budgeting the Rest of Your Income
You must have your own budget set up and control the incidental spending to help you in getting out of the debt. This budget can help you in staying on the track for your retirement and preventing on getting into any bad financial situations. You can also try to follow your any normal budgeting rules, when you set the budget, but you must cover the items on the budget from the personal checking account. Be sure to also make a budget for irregular spending for a birthday or wedding. You might want an annual budget check on the type of the spending you can make sure on working towards reaching your financial goals.
7Keeping Expenses Separate
It is also important for both of you to keep your expenses separate from the household account. Purchasing a car or a house, can make your splitting more difficult. Saving for marriage must be done separately. When you get married, then you must rework on the budget together and also include in all the expenses together.