So You Think You’re Ready To Cohabitate…

Dr. Darcy:

I have a financial question.  I’m a corporate attorney making double what my girlfriend makes.  She is in graduate school part-time and works full-time.  We’re moving in together in 2 weeks and I’m not sure how we should handle the finances.  I can easily cover our expenses myself, but I don’t want to foster dependence or cause my girlfriend to feel less independent.  She has the ability to take out additional (private) student loans which she could use towards covering her portion of the bills. Should we split the bills evenly?

ANSWER

She should not take out any more student loans than is absolutely necessary because there is no need to divide the bills 50/50.  You should each pay a portion of the rent, in proportion to your respective salaries.  Ideally, your rent shouldn’t exceed 35% of your income ~ 40% if you live in a big city like NYC.  That said, calculate what 35% of each of your salaries comes out to and if that doesn’t cover it, go up in 5% intervals until it covers the rent.

I agree with you about not wanting to disable your girlfriend’s independence.  Keep in mind that finances is just a piece of the cohabitation pie.  You’ll want to give equal consideration to how the household responsibilities will be divided. Who will do the laundry?  Clean the house?  Cook dinner?  Care for any pets/plants?  Decorate?  And it’s imperative that you each disclose your respective earnings and debt.

When clients tell me that they’re contemplating moving in with someone, I have them fill out a form called a Cohabitation Questionnaire.  I’ve pasted it below for your review.  As far as I’m concerned, if you each fill out this form and you still want to live together, you’ve got a good chance of making it work.

Cohabitation Questionnaire

1.What is your net salary?

2.  What is your total debt?

3. On average, how many hours do you work weekly?

3. For the next year, what are your financial goals (how much money would you like to make this year, save this year, contribute to joint expenses this year, allocate for debt repayment this year)?

a) Salary Goal:

b) Savings Goal:

c) Joint Expense Contribution:

d) Debt repayment Goal:

6. How do you imagine the division of family responsibilities?

a) Financially (who pays for what):

b) Administratively (who does what: handling paperwork like opening and sorting mail, paying bills, managing bank accounts and anything else you can think of involving money management / paperwork):

c) Domestically (who does the laundry, runs the errands, monitors and manages repairs to home, repairs to clothing, who cooks, who is the host / person in charge of hosting when guests come over, who cleans, manages any animals’ needs like food, vet, grooming).

d). Socially (who is in charge of monitoring birthdays, purchasing + giving gifts, who is in charge of staying in contact with family + friends, who is in charge of making plans on weekends, finding things to do, planning vacations, keeping the social calendar).

7. How do you envision the division of household responsibilities over the next 12 months (do you anticipate changing any of the current percentages of responsibility, and if so, how)?

a). Financially

b). Administratively

c). Domestically

d). Socially

Writer’s Stats: Female, Lesbian