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Combining our finances

I’ve always kept my finances separate from my significant other. This was in part because my past relationships just never got to the point where we needed (or wanted) to combine our money, but it also has to do with the fact that over the last 10 years, I’ve become fiercely independent when it comes to my finances.

Ten years ago, I was in a lot of debt. It was stressful and gave me a feeling of hopelessness – that I’d never be able to fend for myself because I was too much of a disaster – especially when I hit rock bottom and realized that I had to rely on someone else (my boyfriend at the time) to help me with bus fare. BUS FARE. I didn’t have money (in cash or credit) to get to work. I cringe just thinking about how horrible that was.

Related: Would you ever date someone who had debt?

When I eventually started paying attention to my money, I promised myself that I’d never be back in that situation again. I worked hard at my finances, saved up enough money for a down payment on a townhouse, and built up a modest retirement portfolio. I also wanted to be seen as an equal financial contributor in every relationship I’ve been in, so I always insisted on paying for my fair share of everything, even if I made significantly less money than the person I was dating. I didn’t want to be seen as someone that a man has to take care of financially.

This mindset has had both positive and negative consequences, as you can imagine. The pros mostly stemmed from my own personal satisfaction that I’ve gotten to a stable place financially. It made me feel empowered! But some of the cons were that I never really considered someone as a long-term partner unless we were on somewhat similar financial terms, and I still have a hard time letting someone treat me to something as simple as dinner – I always have to make sure that I take care of the bill next time. So that it’s fair.

Related: Splitting expenses with your significant other

Earlier this week, RD and I got pre-approved for a mortgage (!). We aren’t actively looking, but we wanted to be ready just in case something amazing comes up. But one of the items that our mortgage broker wanted was a void cheque from the account we wanted our mortgage payments to come out of. So all of a sudden, this kindafar-into-the-future-conversation of combining at least a portion of our finances was something we had to talk about now.

When we first moved in together, we were keeping track of our shared expenses and totaling them up at the end of the month. Then to make up the difference, an e-transfer would be made to the person who spent the most. It was a bit of a clumsy system because it meant we were each combing through a months’ worth of expenses to try and remember what was shared and what was personal. So for the past 3 or 4 months we’ve been using a joint (travel rewards) credit card. That has really helped because I just total up the expenses at the end of the month, and RD sends over his portion of the rent plus his half of the monthly expenses.

Over the past few months, we’ve gotten good at figuring out what expenses are shared and what are personal, so the next step is opening up a joint chequing account (which we did yesterday through Tangerine!) and linking our existing individual chequing accounts to it. We’ll still keep our own accounts because we both agree that maintaining financial independence is important, and will just transfer in a TBD amount of money into the shared account every time we get paid. :)

Related: Would you use a coupon on the first date?

It’s both scary and exciting to incorporate shared finances into our relationship, and I imagine some tweaking to our system will happen along the way. For readers who also incorporate some sort of shared finances with their significant other, did you have any hiccups and modifications to make when you first started out?

Could you date someone who makes significantly less than you?

428981_10150511290730248_507680247_9376684_690475059_nRecently I read a blog post by a woman who refuses to date men who make less than six figures. “I am all about living life, and not about working to pay for it,” she wrote. At first, I was outraged because shouldn’t we all be striving for our own personal financial independence? It’s the main goal of this blog! But now that it’s been a couple of weeks since I first read that post, I have to admit that I kind of get where she’s coming from.

I’ve never specifically laid out financial requirements for a potential partner, but I’ve always gravitated towards men who were ambitious and financially capable of supporting a certain lifestyle. I’m not talking about flying first class or living in penthouse apartments – I just mean being able to enjoy similar interests, vacation styles, comfortable apartments, and early retirement goals.

And in my previous relationships where there was a financial disparity? It sometimes caused friction. So seeking a partner who made a good income just seemed like an easy solution, and I felt like it would be less complicated. Because the number one thing couples fight about is money, right?

Related: Would you ever date someone who had debt?

Yet, if I had made that a hard rule – if I refused to ever consider anyone who didn’t make at least an equivalent salary to mine – I would have missed out on so many amazing adventures and happy memories in my life. And as for some of the relationships I’ve had with men who made good incomes? They ended up being incredibly messy. Because while it’s true that our finances and lifestyle compatibility were less complicated, I wasn’t completely focused on the bigger picture. Did I love them – or did I just love the idea of them?

As my last relationship was winding down, I learned a lot about myself and what I was looking for. I learned to look outside the box of what I would normally want in a partner – because the path of unsuccessful relationships I was on was not very fun. I needed to stop checking boxes, and I needed to trust my instincts instead. As for financial compatibility, I decided that all I needed was someone who was good with the money that they earned. It didn’t matter what they did for a living. And whether their salary was $40,000 or $400,000 – as long as they were happy and living within their means, what more could I ask for?

Related: Why I can’t afford to start dating

I consider myself extremely lucky to have met my boyfriend. While he cares (a lot) less than me about his finances, he has a stable job, zero debt, savings in the bank, and is really good at pretending to be interested in the latest evolution of my budgeting spreadsheet. :) He is ambitious, yet realistic in the fact that he took a significant pay cut to take a job that would make him happier in the long run – and I think that says a lot about someone to know exactly what they want.

Even though I understand where that woman in the original article may have been coming for, I don’t support her reliance on someone else to create the life she wants for herself. Because you certainly don’t need a 6-figure salary to live a good life. I’ve spent the last 10 years trying to earn my financial independence. I’m not super smart or well educated or even a very good writer.  But I’ve worked hard for the life that I have.

When I was 28, I bought my first home. I saved for the down payment for years, and in the 5 years I owned that home, I paid my mortgage payments on time, traveled to over 20 different countries, and stayed on track with my retirement savings. Maybe this is a super cliche way of thinking, but my financial accomplishments felt like even bigger accomplishments because I was doing everything as a single female.

I don’t really understand why anyone would look for a relationship that includes being financially supported. Sure I understand if you fall for someone who just happens to be wealthy (and also provides you with all of the other things you need in a healthy relationship), but to specifically seek it out seems wrong. I guess I just don’t get why you wouldn’t to experience that amazing feeling of making it on your own. :)

Would you date someone who made significantly less than you?
Would you ever refuse to date someone because they didn’t make enough money?

Splitting Expenses With Your Significant Other

Before RD and I moved in together, we had a talk about how we wanted to take care of our household expenses. It was an interesting conversation as we chatted about what did and didn’t work in past relationships when it came to money.

In relationships, there are generally three ways that couples split costs:

  1. Split evenly – expenses are split down the middle, or you take turns paying.
  2. Split according to income – expenses are split proportionately, based on income.
  3. One person pays for the majority – well, self-explanatory.

Prepping veggies for dinnerWhile I’ve lived with boyfriends before, there was always a pretty significant difference in income. In college, I lived with someone who was already established in a career. He paid for most things because he knew I couldn’t really afford to. But once I started working, our incomes aligned a lot better, and we started splitting things evenly (to the point where we had a very detailed spreadsheet of expenses).

Then there was an ex-boyfriend who I financially supported during the last year of our relationship when he quit his job to go back to school. And Nic, who was a student – I paid for most of our dates, and while we lived in Germany, he paid for a bigger portion of our rent. We probably ended up pretty even in terms of splitting expenses over the course of the relationship – it just fluctuated based on each other’s income level at the time.

My relationship with RD is unique to me because I’ve never lived with someone where we’ve been in the same place financially (he makes more at his full-time job, but I make up the difference with my freelance income). Not only that, but we have the same sorts of spending habits. So it seemed logical that we split our expenses evenly, right?

Kind of.

What I didn’t want was to have a spreadsheet going and track expenses down to the penny. I’ve done it before and it really seemed to take the romance out of “treating” your partner to something. But I still wanted our expenses to be fair since we have no plans to combine our finances anytime soon (I like the idea of combining certain aspects of your finances together, but always want to keep some things separate – even after marriage).

Here’s what we’ve come up with:

  • We split rent 50/50 ($1,650/month)
  • I pay for the internet bill ($65/month)
  • RD pays for the hydro bill ($50/month)
  • We take turns paying for groceries, and reconcile our receipts once a month
  • We take turns treating each other to meals out

We don’t track every dollar we spend and I like it that way. Our day-to-day spending is quite relaxed. If we need something for the house, I’ll pick it up on my lunch break – or he’ll grab it on his flex day. We don’t keep track of the little things. It also means I don’t feel bad if I put a $10 bottle of kombucha in the shopping cart, he doesn’t mind picking up our bar tab when we’re out with his co-workers, and I can feel good treating him to a dinner out with my friends.

Being able to contribute equally makes me feel empowered. In 2006, I had to borrow bus fare from my then-boyfriend because I didn’t have enough in cash or credit to pay for it on my own. That was nearly 10 years ago, and seeing how far I’ve come makes me feel really good. I like that I don’t need someone to support me financially, and I like knowing that I’m financially equal to the person I want to be with.

That being said, I know that what works for us might not work for another couple – and it might not work for us forever. But for now, I’m happy with how things have been working out so far. :)

How do you split shared expenses with your significant other?

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