How to Pay Your Share of First Home Bills | FHOC
Living in a house is much different from renting an apartment. In a typical apartment, you will find that you split all the bills evenly with your roommates. You might either pay the same rent as everyone else, or you might pay a different per cent based on the size of your living space. Bills are relatively straightforward.
Further, living in an apartment means most people keep separate control of their finances since they are unrelated to one another. Since most people tend to live with people in the same age range, they are often in the same tax bracket as well. These factors all keep paying bills simple.
But what happens when you finally move into a new home with your partner? How will you both handle your share of the bills? It’s important to have a plan early so that finances won’t affect your relationship.
Not all couples earn an equal share of the household income. Sometimes one partner is the clear breadwinner, and that person may decide to be in charge of a larger portion of the monthly bills. Other times couples decide to split their payments evenly in spite of the fact that one partner is earning more.
Still other couples may decide that they want to merge their income together so they do not have to worry about arguing with one another over their portion. Indeed, there is simplicity in joining your income together as one unit.
The best thing you can do is sit down with your partner long before you purchase your first home. Figure out your goals and dreams, and take a realistic estimate of how much you will be spending on your home each month. This includes monthly mortgage payments, maintenance fees, property taxes, insurance, and any other regular expenses.
Deciding Your Split
Once you both sit down and discuss your income and expenses, it is time to decide how you will split your bills. There are a number of ways that partners can contribute to the home:
- Income-Based Split: If your income is radically higher or lower than your partners, the fair choice may be to split your percentage of the bills according to your income. This ensures that both partners are equally burdened. It also ensures that both partners feel equally committed to their house, even if they are not paying the exact same amount.
- 50-50 Split: Some couples prefer to pay the exact same amount. This way neither party can argue that they own more of the house than their other half. One benefit to this method is that it ensures the monthly expenses stay within the range that the lower earner can afford.
- Fully One Income: There are plenty of couples who have one clear breadwinner. In this situation, the most rational choice might actually be to have one partner pay all of the bills. This is a great scenario for couples where one partner works from home, has sporadic income, or stays home with the children. It can be a temporary situation to relieve the financial burden and stress of one partner.
How Will You Split?
Every couple has a unique financial situation. It’s important to feel that you own a significant stake of your home without taking on too much burden. The same is true for your partner. Discussing these issues early on will help you decide on the right split.
First Home Owners Centre (FHOC) has in-house financial advisors who can help evaluate your income and estimate your home expenses with your partner. Contact us today to make the best financial plan for your home.