How do you handle money in relationships?
Often poorly… or at least most people do. Financial issues can be a major issue in relationships. It is the number one cause of divorce (Source).
Couples can disagree on how money should be spent and differences in income levels or financial security can cause differences in priorities or wants. One person may try to control or hide money, people can be secretive or feel uncomfortable talking about money. There can be financial abuse or a hundred other money-related issues.
So how we support and help each other while being fair in a relationship where the people involved are on different financial levels?
How we got here
Jacob and I have been dating for 3.5 years and during that time both of us have made some major financial moves. We met and started dating very shortly after I paid off the last of my student loan debt. He graduated college. I grew my business and got several raises, saved an emergency fund and then a fund for a home.
In early 2019, he moved in with me into my apartment and we started splitting the costs associated with the house including rent, electricity and internet. (We don’t do cable.)
When I bought my duplex in 2020, he came with me. And we had to figure out how to handle how much he would pay for housing now that I would essentially be his landlord.
We landed on $500 per month rent, plus the normal splitsies for electricity, internet, and a new split charge for lawn maintenance.
What he pays is significantly more than I pay, as I get $1050 in rent for the other side of the duplex, and the mortgage is only $1700/ month total, leaving just $150 per month out of my pocket after his $500.
YUP. I charge my boyfriend more than I pay to live in MY house. I’ve gotten a fair amount of flack from it from people on the internet, and even from a IRL friend who is in a similar, yet reversed situation.
A few comments:
- “Why is he okay paying more rent than you?”
- “But you live together, you shouldn’t charge him rent!”
- “You should only charge him half of what you owe after your renter’s pay!”
- “So you’re profiting off your BF — Nice girlfriend.”
- “He must be okay with being a doormat.”
- “If you love him, why would you charge him rent?”
- “You should have just bought the house together/ put his name on it too.”
- “So greedy.”
And one of my favorites….
So let’s address it! And why I don’t think it’s greedy, wrong and I’m actually really surprised how many people think that someone else should be entitled to what you own and have worked for.
I absolutely love Jacob, so why am I trying to make money off him? Especially since I only pay $150 of my own money to my mortgage each month.
In short, because it costs money to live in this house. I bought it alone with only my money, but I owe $ on it monthly for the mortgage, taxes, insurance, etc. However, even if I owned it outright, there would still be costs associated with owning and maintaining this home, and I’d still charge him.
We split bills in the last apartment that we rented together, and what he pays is slightly less than it would be had we stayed there.
How we decided on his rent
We had an adult discussion about what would be fair when it came to him contributing in this new home. We discussed:
- whether he would pay a flat rent vs. half of expenses
- who would be responsible for repairs, appliances
- who would property manage the rental
- and what would happen if we broke up.
The non-mortgage costs
As we all know, owning a home comes with costs beyond the mortgage. I planned for these when saving for my home, plus a good cushion for the unexpected.
Before we moved in, I paid out for renovations, new (used) appliances, fixtures, etc. I spent about 20 hours painting, bought tools and supplies, etc. It cost around $3k total because I shopped smart and got great deals.
The A/C went out twice, I had to replace a toilet and garbage disposal for the rental unit, had to hire handymen, and placed about four-ish $75 calls to the home warranty.
Since moving in, more costs have collected, nothing I can’t handle or afford, thankfully, but I also have savings and an emergency fund so this home can be a blessing to me and not a burden.
Flat rent vs. split expenses
Those ongoing costs, the responsibility of managing the property, etc. Is why Jacob and I chose to pay/ charge a flat rent rather than split the costs of the house total.
If we split remaining expenses, on a “good” month, he’d only have to pay $325 (the cost of my mortgage after rent is paid, split in half)… but if there was a vacancy, nonpaying renters, an appliance replacement, repair, etc… he could be suddenly on the hook for thousands of dollars for a home his name isn’t on the deed of.
So we decided on a flat rent of $500 per month. This is a good rent for the area, just under half of what I’m renting out the other side of the duplex for ($1050/month), and under market for the area ($1200 for a 3 bed, two bath unit). It’s also just under what he would have been paying if we had stayed at our old rental apartment, and in this home we each have our own office and bathroom.
Does he help around the house?
He helps me out with a couple things around the house occasionally if he wants to or can. For instance, he’s reversed a fridge door, helped me paint a little, installed a ceiling fan and flipped some upside down laundry doors for me, but he did these things to help me out, improve our home and because he loves me and because couples help each other out sometimes, not because he has to or is expected to.
I’m responsible for fixing anything that comes up, or hiring people to do it, property managing the rental and tenants, replacing big ticket items etc.
What if you break up?
I wrote Jacob a lease. Yup. We have a legal document outlining his tenancy and it’s to protect both of us.
I wrote the lease to be very fair and even advantageous for him. I doubt he could get this deal anywhere else, to be honest.
It’s a month-to-month lease with no security deposit, pet rent, etc. There is a 30 day notice to end the lease from either party should our relationship not work out.
What if you get married?
If we get married, I’ll quit making him pay rent, ha. Then he’ll be responsible for and own half of the whole thing. I’ll also likely make him take over more of the responsibilities.
His rent money will also have been going to help pay for the equity in the house he’ll then co-own. Which is pretty cool. Personally at least, id rather my rent money go to someone I love than a stranger or corporation.
Different financial goals in a couple
Right now renting, and having fixed housing costs, is the best choice for Jacob as he has other financial goals, mainly debt payoff.
But for me, owning and building a real estate portfolio is where I’m at financially and I’m really freaking excited about it.
There is nothing wrong with renting. And there is nothing wrong with charging, even people you love, for something valuable you own.
I think we’re both actually really lucky that we can help each other out where we are with our financial goals. His rent helps me pay my mortgage, my house allows him more space and a good deal on rent while he works on his financial journey. It lifts both parties.
The most important part of this arrangement was communication. Nothing was hidden about the money associated with the house and we talked multiple times until we found something we both thought was fair.
it amazes me you received so much flack for this arrangement. It is a business decision for you both. You are being more than generous and given your relationship, I am sure you will get married some day. I also love that you used my response in your post. ninaayd….
I am so much older than you are and have never been half so wise. Jacob sounds like a confident man without ego issues. One question: Do you have a Will? Are you on each other’s bank accounts in case of (God forbid) some misfortune? People my age are having to confront huge complications relating to this, especially in long term, non married relationships.
Hey, I’ve been following you on IG and I love your YouTube videos. It’s great that you share what works for you and Jacob, and I think that since you have posted details about your arrangement A LOT of people are going to look to you for relationship and money advice. Don’t pay attention to the assholes who are too immature to be in adult relationships or who are jealous of your arrangement. This is business. If I ever get married again, you can bet I’ll have a prenup and I’ll make legal arrangements to protect my self and my family. You’re doing great and I can’t wait to see more of what you accomplish! xoxo