Should rent be split by income?
Depending on each person's debt and income, you may want to each pay half of the rent or split rent proportionally based on income.
'Seriously consider' splitting bills by income
"I advise young couples to seriously consider splitting the household bills according to income and then revisiting it every year as incomes change," said certified financial planner Cathy Curtis, founder and CEO of Curtis Financial Planning in Oakland, California.
Split rent evenly.
If every roommate will have roughly the same amount of space and the same amenities—or doesn't care if they don't—this is the easiest method. Everyone pays the same amount. Just divide your rental rate evenly by the number of roommates, and you're done.
To do this, add up all your incomes and then figure out what percentage each of you brings to the table. Next, multiply the total rent on the apartment by each person's percentage. The result will be the amount each person should pay.
And so, while that 50/50 arrangement might be “equal,” it doesn't necessarily make it “fair.” The recommended amount of money you should pay per month on rent is 30% of your income, and that differs greatly for you and your boyfriend.
If you want to keep it simple and equal, the best way to split rent with a couple is by dividing it right by the middle, so everyone pays the same amount. For instance, if the total rent is $1,500 and there's one single tenant and a couple, each would pay $500.
You need to pay for your housing, whether to a landlord, a rental agency, or your boyfriend. It's reasonable to pay a portion of the monthly obligations on the home and to split utilities the way you would with any roommate.
Split Rent 50/50
The obvious way to split rent is for each partner to pay exactly half of the bill each month. This can keep it simple, with each person having an even share in housing costs. For example, if you find an apartment that costs $1,800 per month, each partner would contribute $900.
If all rooms are relatively similar in size and have the same amenities, splitting rent evenly is the best method. You just divide the rent by the number of roommates and you're done.
Bedrooms vary in size depending on their square footage, which will affect how to split rent with roommates. If you choose to divide rent by the size of your rooms, the roommate with the biggest room would pay the most rent. Similarly, the roommate with the smallest room would pay the least rent.
How much of income should rent be?
A popular standard for budgeting rent is to follow the 30% rule, where you spend a maximum of 30% of your monthly income before taxes (your gross income) on your rent.
Many couples split bills 50/50, especially if they are earning similar salaries. If your incomes are significantly different, however, a more equitable solution might be to split expenses proportionally according to each partner's income.
This general guideline suggests that you charge around 1% (or within 0.8-1.1%) of your home's total market value as monthly rent payments. A property valued at $200,000, for instance, would rent for $2,000 a month, or within a range of $1,600-$2,200.
Spending more than 50% of your income on rent isn't recommended, as you'll be living paycheck to paycheck. You won't be able to save or invest money for the future. If you're currently overspending on rent, solutions include raising your income, finding more affordable housing, or getting a place with a roommate.
While recessions can create downward pressure on rental rates due to decreased demand and financial hardships tenants face, the extent of the decrease and its duration can vary depending on location, market conditions, and government interventions.
- Prove You Deserve to Pay Less. Having a good reputation can come in handy when you're trying to reduce the price of your rent. ...
- Show You've Done Your Homework. ...
- Bring Something to the Table. ...
- Agree to Stay Put for Over a Year. ...
- Agree to Pay Before the First of the Month.
Roommates can split rent in various ways. It all depends on what works best for you and them. Splitting the rent by square footage, by person, and by room are common options. If you're not sure what option is best for your roommate situation, check out the following ways to split rent with roommates.
Tell them when you need the money.
If you need help paying a bill, let them know the due date. And if you literally need cash right now, make that very clear. A few examples for you: "Rent is due on the 1st, so I'd need the money in 2 weeks."
- Add up your total household income. ...
- Now add up your total monthly shared expenses (rent / mortgage, utilities, groceries, joint investing or saving goals, etc). ...
- Every month, both partners transfer their share into the joint account.
If they are together for the long run (so they should be talking about getting married), then paying based more on salary is reasonable. I'd also add that if both parties have zero problem paying their portion of the rent while still making their other bills and saving goals, then just split it in half.
Should you split rent with GF?
There's no right answer here, but there are lots of possibilities. For example, you could try the “proportional split”: If your income is half the amount your girlfriend makes, then you're responsible for one-third of your total shared costs.
You shouldn't have to “charge rent” or even ask for money towards bills. If your partner agrees to move in with you and they respect you and your relationship, they should fully expect to contribute financially. This should all be discussed and hashed out before your partner ever agrees to move in.
Share the bills
Some couples pay their household bills from a joint account to which both partners contribute. Others divide the bills, with each partner paying their share from their individual accounts. It's also important to make sure the division of bills is fair and equitable for both partners.
You shouldn't have to “charge rent” or even ask for money towards bills. If your partner agrees to move in with you and they respect you and your relationship, they should fully expect to contribute financially. This should all be discussed and hashed out before your partner ever agrees to move in.
Separate: You may want to keep your income and spending totally separate. Each of you would have your personal account for deposits and withdrawals, as well as your credit card accounts for charging and loans for borrowing. Combine: Both of you would manage all income and spending from a joint account.
