I'm wealthy, but he's not - What's the fairest way to divide the rent?

Combining Finances: A Delicate Balancing Act

Dear Kristin, My boyfriend and I are looking to get our own place together after years of living with family and roommates. We have been discussing how to combine our finances and balance our expenses. He earns nearly $10 more per hour than I do, but also has debts and child support to pay. On the other hand, I have some small debts, but also a significant amount of money saved up, along with bonds and stocks gifted to me by my parents and grandparents.

He believes that because of the gifts I receive, I technically earn more than he does, and that I should contribute at least half to our expenses. I think he may have a point about me earning more if my savings are included, but I'm struggling to figure out how to fairly split rent and expenses when 50% of rent in our area amounts to 50% of my monthly earnings, not to mention factoring in groceries and utilities!

I'm hesitant to ask my family for advice as they may say I don't owe him anything from my savings (both my parents are divorced, so you can imagine the complications). Sincerely, Poor Little Rich Girl

Expert Advice: Finding Balance in Finances

Dear Rich Girl, Combining finances and splitting expenses can be a tricky subject that many couples face. It is essential to find a fair and balanced way to handle money matters to ensure that neither partner feels taken advantage of.

One approach to splitting expenses is to do so proportionally to each partner's income. For example, if your boyfriend earns $2,000 a month and you earn $1,000, he contributes roughly 67% of your combined earnings and should pay that same percentage of expenses.

While your boyfriend may earn more due to a higher hourly rate, it's crucial to consider your savings and assets separately from your income. Savings should not be counted as income for rent and expenses, as dipping into your savings to cover bills indicates living beyond your means. Similarly, stocks and bonds received as gifts contribute to your total wealth but do not provide immediate cash flow unless sold or yielding dividends.

If you receive regular cash gifts from your family, these should be counted as part of your income for budgeting purposes. However, relying solely on gifts for expenses is risky, as familial financial situations can change, impacting the amount of gifts received.

Regarding your boyfriend's budget, child support and debts are non-negotiable obligations that must be factored into his expenses. While he may earn more on paper, his actual disposable income may be lower due to these fixed costs.

For a practical approach, have an open conversation about your combined incomes, including gifts, and create a budget that is manageable for both parties. Consider each person's ability to contribute and explore affordable living options that align with your financial capacity.

Remember that navigating financial challenges together in a relationship requires flexibility and mutual support. Strive for a balance that allows both partners to improve their financial well-being without sacrificing financial stability. -Kristin

If you have financial questions, Kristin is available for assistance. Submit an anonymous question, and she may address it in a future column.