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Managing shared finances

There may be times throughout your life when sharing costs, or making joint financial decisions, is sensible. For example, you might:

  1. Share responsibility for paying rent or other bills with one or more flatmates.
  2. Commit to a mortgage with your partner or spouse.
  3. Contribute to household bills when you live with parents or relatives.

Flat and house shares

For many people, the first time they consider sharing financial responsibility with another person is when they move into a flat or house share with friends or family. You may be jointly responsible for the rent you pay, as well as for the cost of utility and other household bills.

Between you, make a list of the bills that you plan to share up front, and agree a method of dividing them up so that everyone pays their fair share. You might also decide to keep a spreadsheet or record of everything that has been paid so that everyone can see how it has been worked out. You'll also need to agree up front what to do if someone doesn't pay their share, or decides to move out. One option might be to build a buffer balance in a shared bank account to deal with such situations. In any case, you may benefit from discussing an exit strategy, whether intentional or unplanned.  

Opening a bank account in joint names can work, for handling the rent and other payments, or you might prefer to appoint a member of the household to collect money from the others and make the payments themselves. However you choose to manage your shared responsibilities, it's important to ensure everyone understands what, how and when to pay.

Sharing finances with a spouse or partner

It can be a good idea to review your joint financial situation when you move in with a partner, get married or start a family. Understanding your partner's attitude to money can help you both to plan and manage your financial affairs effectively. While many couples choose to open bank and savings accounts in joint names, it doesn't suit everyone. It's important to agree, as a couple, how you will each contribute to household expenses, put savings aside, or decide what to spend your money on.

It's perfectly normal for couples to have different opinions about money, and what suits one couple will not suit another. 

Living with parents or relatives

As more of us choose to live with parents or relatives into adulthood, it's important to establish how responsibility for expenses and bills will be shared between you. You may agree to pay rent, just as you would to the landlord of a flat or house – as well as a contribution towards food and household bills. 

Alternatively, you may agree to support them in other ways, such as by providing a carer role, or offering cleaning, gardening or other services. Everyone's situation is different.

Being aware of what might go wrong

It's entirely possible to maintain your financial independence, whilst sharing responsibility for certain financial commitments and expenses with other people.

However, when you have shared finances with anyone else, it's all the more important to keep your personal details secure, and recognise the signs of identity theft or fraud.

If you open a joint bank account with another person, or you apply for credit together, then you will have what's called a financial association with them. It's important to note that you will be jointly liable for paying back any debts in your joint names, and it may have a negative impact on your credit score or history if you fail to do so.

Remember, also, that your financial independence is important. If anyone other than you tries to control your money, gets you into debt, or prevents you from accessing your money, this can be a sign of financial abuse.

Talking about money

Many people throughout the world find talking about money with a friend or loved one extremely difficult - even when money concerns are putting a strain on their relationship, or affecting their health.

Being able to share money worries, and talk openly about money with a friend, partner or family member is important for our health, wealth and relationships. Research shows that people who talk about money;

  • make better and less risky financial decisions
  • have stronger relationships
  • feel less anxious and more in control

So look for opportunities to make conversations about money a part of normal, everyday conversation.

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