Moving in together should be new and exciting—you’re taking your relationship to the next level. But merging finances with your partner can be complicated, so anything you can do to make the move less stressful will always be welcome. Setting aside the time to focus on the practical costs of moving in together means you’ll have more time later for the fun stuff, like deciding the color scheme or choosing your side of the bed. Starting with an open and honest dialogue sets you in good stead ahead of the big move, and your relationship and finances will be better for it. So, if you’re ready to take that next step, check out our helpful tips on what the cost of moving in together really looks like, and be ready to cohabit in harmony.
Write down a household monthly expenses list
Solo living means you doing you—whether you’re a careful budgeter or like to splash the cash, the emphasis is on suiting yourself. Now you’re paired up, you have to consider your partners spending habits. The average monthly expenses will vary from couple to couple, especially if you have children and pets to factor in. Start by writing down a list of your household expenses, which you can then use to forecast an estimate of mutual outgoings. A great tip is to keep track of your spending for a month or two, noting down purchases, going through bank statements and keeping receipts, so you have a record of exactly where your money is going. Make sure you include everything, regardless of how small it may seem. And be honest with yourself—that ‘essential’ Monday latte still counts!
Once you’re clear on your outgoings, you can break these down into manageable categories. No matter what lifestyle you’re used to, we all have our basic necessities, our creature comforts, and our future goals to save for.
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The necessary living expenses take priority and will account for the vast majority of costs. They can be broken down as follows:
- Housing—mortgage or rent
- Transportation—train season tickets or car expenses
- Utilities and taxes—local taxes, water and electricity bills etc.
- Food and toiletries
- Phone and internet bills
- Insurance policies and medical costs
- Child and petcare
Once you have the necessities covered, think about your hobbies and shopping habits:
- Fitness—Gym memberships and class fees
- Clothing—designer labels, fast fashion, or sustainable brands
- Leisure and Entertainment—Meals out, music gigs, trips to the theatre and cinema, etc.
- Home and interior decoration
- Holidays—Stay-cations, city breaks or 5-star getaways
Now you’ve been honest about your spending, it’s time to list your saving goals. As a couple, you’ll have discussed your future ambitions, like taking that sabbatical, starting your own business, or upsizing to a bigger property. These are the places you should be setting your priorities and monthly saving goals.
With your expenses list completed, you now both have a full picture of your monthly outgoings. You might be surprised by how much you’re spending in certain categories (hello, fluffy cushions) so it’s a good time to make conscious decisions about where to cut down now you’re going to be living together.
If you have any debts, it’s also very important to keep on top of any interest payments each month—missing any could negatively impact your credit score, and ability to borrow money in the future. At a minimum, set aside the interest payments but ideally you should also aim to pay off some of the debt amount each month too.
The couple that pays together, stays together: Create a budget planner
So with your monthly expenses list in hand, now you need to work together to budget for your new home. When creating a budget plan bear in mind that your shopping habits, attitude to money and personal circumstances may differ. Decide up front whether the expense balance will be equally shared or based relatively on your separate incomes. You can then determine the expenses you will split and set your individual contribution amount.
A great top-line rule to use when allocating funds is the 50/30/20 split. Allocate 50% on needs, 30% on wants, and keep 20% for your savings. So, if your expenses list is much more generous on the wants than your savings, it’s time to rethink your priorities.
Using budget worksheets and apps is a good way to keep a close eye on your funds, because they simplify saving by detailing your spending with total transparency. Whether it’s notifications to flag that you’ve overspent, strategies put in place to help pay off debts, or simply being a reference point to regularly check finances in real-time, every budget planning app has features to support you. Check out our list of the best budget apps out there.
Remember, this is just the financial starting point which you will build upon once in your new abode. Another great tip is to put big money dates into the diary (finally, payday), to regularly discuss your monthly expenses and fine-tune the budget planner accordingly.
So you’ve survived the awkward financial conversations, and you’ve admitted what you actually spend on take-out. With your monthly expenses list to hand, and your budget planner in place, that’s one less thing tackled ahead of moving in together. Bring it on!
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For couples that haven’t lived with each other before, there’s a lot to get your head around when moving in together—including merging finances. With N26 Smart, you can take control of your spending with the help of Insights, and get a categorised breakdown of your spending to track your monthly expenses.
Now that you know how much to put aside each month, N26 Spaces gives you up to 10 sub-accounts to stash your savings or your share of the bills, depending on which account plan you choose. Setting specific goals for each space will help you and your partner stay focused, and you can set Rules to make automatic transfers from your main account instantly, or at regular intervals. Better still, you can create Shared Spaces to save together to reach your joint goals, such as buying a house one day.
What to discuss before moving in together?
If you’ve decided to move in with your partner, it’s important to have an open and honest conversation about your current spending habits, and to come to a mutual decision on the maximum rent you’re able to jointly pay. If your earnings are significantly different, you should discuss whether it would be better to pay rent and bills proportionally, in line with what you earn. Many couples find this is a fair solution.
How to make a budget planner?
There are so many resources available online that you shouldn’t need to create a budget planner from scratch. See our in-depth guide to budget planners to download some classic examples, or look into budgeting apps that allow you to stay up-to-date instantly.
How much should I save each month?
How much to save will vary person to person, given your personal circumstances but there are some general rules you can follow. For example, the 50-30-20 rule, where you allocate 50% of your income to necessities, like rent and bills, 30% to lifestyle choices, like vacations and nights out, and then 20% of your income for savings. Having some financial discipline and putting 20% of your savings aside means you’ll soon have significant savings to support your future goals, or to cover you in case of emergencies.
What to include in monthly expenses?
There tend to be three key categories when considering your monthly expenses:
- Basic costs—rent,utility bills, food, transport, insurance, childcare, local taxes, etc
- Leisure costs—meals, outings, vacations, clothes, gym memberships, luxuries, etc
- Savings/debts—direct debits, ISA payments, investments, credit cards, loans, etc
List everything you spend and break them out into these categories. Going through your bank account will help you understand all your costs.
How do you budget for home expenses?
Firstly, you need to know how much of your income you spend each month and how you’re spending it. Once you’ve broken this down, you can subtract your expenses from your monthly take-home salary to understand how much you need to put aside for your home expenses every month. If the amount seems high, some quick tips to save include turning your thermostat down, making sure you only put the water one when needed, and shopping at more budget-friendly supermarkets.