Welcome to Money Talks, where everyday couples reveal how they navigate all things finance.
Transitioning from the ‘your place or mine’ phase of the relationship might seem like an easy win. No more overnight bags or difficult housemates.
For most couples the decision to move out of your individual rental into a shared rental, also comes with it’s own financial benefits: split bills, a bigger place and the opportunity to co-habit with the person you love.
But what happens when you and partner when you begin this next chapter on an uneven playing field? When they have already made the leap onto the property ladder, while you’re still stuck in the rental game. We asked two couples in this exact scenario to argue their case.
The Couple Who… Splits The Bill
Age: 27 and my partner is 33
Salary: My salary is 80k and he’s on 130k
Profession: Sales assistant and operations manager
Meet the couple
marie claire: How did the arrangement for you to pay rent come about?
Jess*: “My partner and I met six months ago and I moved into his apartment last month. He bought his two bedroom apartment a couple of years ago and has a large mortgage on the property. Previously, I was renting a room in a share house, so I was more than happy to pay rent for a nicer place all to ourselves. The way I see it, I would be paying rent anyway so I’m happy to contribute.”
MC: What is your relationship like with money?
J: “I have a lot of expensive hobbies. I like skiing, horse riding and wakeboarding, so for me money is simply a way to fund my lifestyle. Buying property in Sydney has always felt pretty unobtainable for me, so I have decided to invest my earnings in things that make me happy. That said, I do put aside money for a rainy day, I’m just not scrimping and saving for a house.
MC: How did you decided on the amount of rent you would pay?
J: “I know some couples where the partner has paid market-value rent for the area, which I think is a bit steep. We decided to do a reduced rent, so basically I am paying a bit less than what I was paying for a room in my old share house. I’ve very happy with what I’m paying.”
MC: Are you also paying bills on top of your rent contributions?
J: “Yes, we split the bills 50/50. I think this is very fair given I am using those utilities. They only they I don’t contribute to is the strata, water or council rates as they are the property owners responsibility and if I was renting on my own I wouldn’t be paying that.”
MC: How do you and your partner broach the topic of money?
J: “We’re both really comfortable talking about money. We’re both really fair and wanted to have those uncomfortable conversations upfront so that we could move on and enjoy our relationship.”
MC: How do you feel about the thought of paying down someone else’s mortgage, when you don’t receive any monetary return on investment for contributing?
J: “I will admit it is something that has crossed my mind, but the way I see it, I would be paying down someone’s mortgage anyway. Depending on how the relationship pans out, I would ask to be put on the mortgage down the track but for now I’m paying for the lifestyle of an apartment that I share just with my partner and not a bunch of strangers.”
MC: How do you feel about it being called ‘rent.’ Does that desription make it feel more like a land-lord and tenant arrangement than a romantic partnership?
J: “It does feel a bit strange calling it ‘rent.’ It might feel like it’s taking the romance out of the relationship a bit, which is why I prefer to call it contributing to the household bills, but trust me when I say nothing will take the romance out of the relationship quicker than one partner harbouring resentment over you being a freeloader.”
MC: What are your future finance goals?
J: “At the moment, I’m enjoying the freedom of not being tied down by a mortgage. I definitely see a future with my partner, so hopefully my contributions help pay down is mortgage faster so that we can live more comfortably in our 30s. While I wouldn’t want to buy a property myself, I would want to own a house together with a partner one day. For now, I’m very much enjoying my disposable income.”
The Couple Where… One Pays The Mortgage And One Lives Rent-Free
Age: 28 and my partner is also 28
Meet the couple
Salary: My salary is 65k and he’s on 185k
Profession: Beauty writer and Marketer
marie claire: When you first moved in what were the discussions around contributions to bills?
Melanie*: “When my partner and I met I was still living at home and was very happy with my living arrangement. I have a great relationship with my parent’s so staying home in my early 20s was an easy decision. I had just gotten my start in the beauty industry on a low salary, so the option to live out of home and pay rent was just not there for me. After dating for two years, he asked me to marry him. Of course, I was hesitant as we hadn’t lived together but I loved him and saw a strong future together. So, I said yes.
“My partner had brought the property a year before we had met. It’s nice, but it’s in an area that I would not voluntarily choose to live in. I understand that this is a privileged position to be able to be selective on where you live during a cost of living crisis. But the area is inconvenient for me to get to work and is away from where my friends and family live.
“As we were engaged, we knew we needed to move in together. The decision for me to not pay rent, simply went without saying. Why should I pay rent for a property I wouldn’t have rented myself given the choice? It was my partners decision to take on a mortgage and the cost of me living there doesn’t effect this. Of course, I do contribute towards the bills which we have split pro rata to our salaries as he earns a bit more than me.
“If my partner did ask me to pay rent, I would simply say no. I am his fiance not his tenant.”
MC: What is your relationship like with money?
M: I grew up very comfortably. Money was never a stress in our household. My parents very much instilled a strong work ethic in us that if we get a good job and work hard we will be rewarded. Of course, as a millennial we now know this not to be true. For this reason, I chose a career that is a passion rather one that is high paying. Despite not earning much I have always been a diligent saver. Had I not met my partner, buying a property was on my bucket list.”
MC: Will the arrangement change once you get married?
M: “I hope so! My ideal scenario is to rent out his property and buy somewhere together in a more desirable area, so that we can both equally sign onto the mortgage. While we are a few years away from this goal, I know other couples who have similarly rented out the property that one of them own and then rent somewhere else so that they can split the cost 50/50.”
MC: Do you ever feel guilty that you have a lot more financial freedom than your partner?
M: Truthfully, no! Currently, I am putting my saving towards our wedding and so I see the money that I save not paying rent as money that will go towards us (holidays, dinners ect.) and our future.”
MC: What are your future finance goals?
M: “After we’ve paid off our wedding, my next goal is to get into investing. I’ve heard ETF’s (exchange-traded funds) are a good place to start.”
*Names has been changed.
Disclaimer: The contents of this article are personal recounts and not advice. They have been prepared without taking account of your objectives, financial situation or needs. You should, before you make any decision regarding any information, strategies or products mentioned on this website, consult your own financial advisor to consider whether that is appropriate having regard to your own objectives, financial situation and needs.