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Cash Allocation:
5 Ways to Split Finances with a Long-Time Partner

How to split finances living together, for household income and expenses

Man and woman sitting on a couch, with papers and a calculator.
When you are in marriage or long-time partnership, finances are always a sensitive topic
that should be worked out in advance with a cool head.

Living with a long-time partner is similar to an extended sleepover, but you have to face responsibilities. Instead of talking about your dreams, crushes, and plans for the weekend, you must discuss bills, mortgages, and other fees. You think about who foots the next groceries or whose card swipes the register the next time you go to the mall.

For bickering married couples, the subject of money is long past their stage. New live-in partners and long-time partners are still not used to the idea. They still need to adjust to the concept of 'joint ownership,' sharing, and delegation of finances. Since money is always a sensitive matter, you must prepare yourself before diving into the topic.

Use these five tips to manage your household's income and expenses.

1. Keep a cool head during disagreements

Each of you is likely to have a viable solution to split your household finances. However, none of it will work if you both want to force your idea into the situation. That will only make matters worse.

You must both recognize the effect of your viewpoints. They are all valid and likely to solve your financial issues. When you don't agree on money matters, remember to keep a cool head. Learn to respect your partner's feelings about money. Establishing a common ground helps you create a picture of where you want to lead your home finances. Identifying your financial goals clears the air and leads you to follow a distinct track.

2. Establish a bill paying system

A comprehensive and well-constructed bill paying system is seamless and takes the least amount of time to settle bills. Having a consistent place for your receipts, checks, and invoices help you sort them quickly when in your house and lot. Have different envelopes, folders or filing system for utility bills, credit card bills, car repairs, health insurance, grocery receipts, and business invoice. You can find out which is urgent and due using this method.

Next, set up regular times to pay your dues. It can be every month or quarterly depending on the nature of the bill. You can settle the half every 15th and the rest during the end of the month. Following the schedule keeps you within your budget. It also minimizes the occurrence of impulse spending.

To settle payment, you can open a joint account and use it to debit utility charges. You can divide your expenses amongst yourselves and pay the bills through individual accounts if the joint account is not possible. Last but the least, you can make a fraction out of the total amount of expenses especially if you earn more than your partner. If you earn 20,000 and the other earns 15,000, you can vouch for two-thirds of the bills while remaining is for them.

Don't forget to check online payment facilities of establishments. Some of these payment platforms help you dodge processing and other associated fees. Thus, you save more.

3. Have separate bank accounts

It's nice to share things when in a relationship, but you must give yourselves some room. A bit of space is healthy especially when talking about finances. It feels empowering to have extra money to save or spend without consulting anyone, even if it is your partner.

Maintain separate savings accounts and personal credit card. You need the account to build your credit record in case you need to borrow from the bank. Having personal savings also saves you in times of difficulty.

4. Limit your liabilities

Long-term couples or live-in partners unmarried still have the right to extricate themselves from their partner's past liabilities. If your partner decides to buy a car because you both need it, the decision is his or hers. You don't have to pay for its repairs, upgrades, and insurance especially if you didn't agree or commit to the decision. The same privilege applies to your partner.

As much as possible, limit your common properties. Limited joint properties lessen expenses and disagreements. Don't contribute money when purchasing a major asset when ownership is under one person. It will not be legally yours.

5. Talk about it

Open the idea of a joint account once you are fully committed to the relationship. Married couples often resort to mutual savings to achieve their long-term goals. They plan their dream house and lot, vacation, retirement, or their children's education. Talk about your plans for you to prepare accordingly.

Besides your goals, it's also necessary to open up about each spending habits. You must voice out your opinion to your partner especially of their spending goes out of control. It's normal to spend once in a while, but staggered monthly fees can cause arguments in a relationship.

Marriage and living in together is a financial partnership. The partners must compromise and cooperate for the relationship to be successful. Adopting a system, communication, and knowing each other's limit on finances are some ways to allocate household cash accordingly.

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