Introduction
Establishing a financial partnership with someone can be challenging, especially when the other person earns a significantly larger amount. The best approach to dealing with this is to define what you want your relationship with your friend to look like in terms of finances.
Setting Financial Goals
The reality is that it’s unlikely for two people to be 100% equal financially. So don’t strive for that. An equal partnership does not have to mean “exactly the same.”
What will make you feel comfortable sharing finances with your friend? Is it contributing 50/50 to expenses? Is it having a say in major decisions, even if you’re not contributing financially? Perhaps it’s about feeling secure that your friend won’t kick you out if a problem arises because you’re not on the mortgage or lease. Once you identify what empowers you, you can discuss with your friend how you can contribute financially to the home you’ll create together.
Dividing Expenses
You may find that once you talk, he is not keen on splitting the down payment 50/50. But do you want to be on the lease or mortgage? If so, your friend may want you to contribute some money to the down payment, even if it’s a small amount. Discuss how you’ll divide expenses moving forward. Will you share mortgage obligations together? How will you pay for utilities? Or food? I always think it’s best to divide expenses proportionate to income. So if he earns twice what you do, his financial obligations towards the home will be twice what they are for you.
Maintaining Financial Independence
If you’re not going to be on the lease or mortgage, that means the home will be entirely in his name, and I suggest not spending any money on improvements or repairs that will increase its value. You should not be expected to fix the roof or renovate the kitchen, and your friend shouldn’t expect that either, unless you are also a legal owner of the home. And if you’re not going to be on the lease, make sure to protect yourself in case the relationship ends. You can sign an agreement with your friend to ensure he can’t just kick you out of the house if the relationship deteriorates.
Keeping Separate Accounts
You didn’t ask about merging finances, but it’s perfectly okay to keep separate accounts. You don’t need a joint account to pay the bills, and again, putting your money in an account that your friend can access also poses a small risk.
Achieving Financial Goals
Finally, set some financial goals, both separately and together. Create a budget for the household and save, invest, and spend according to that budget. But also take care of yourself and start building a strong savings. If you do that, you may feel an improvement in your own financial position, and even if you earn less, you may increasingly feel like an equal financial partner with your friend as your personal financial situation improves.
– Christine
Source: https://www.thebalancemoney.com/can-my-boyfriend-and-i-be-equal-financial-partners-6823163
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