Earn Rewards: Sign up now and earn a special reward after your first deposit. See offer details



Save, invest, retire

GET — On the App Store


Concerned about market volatility? We've got answers and guidance for you. See videos


3 Tips for Managing Money Effectively as a Cohabiting Couple

Unmarried couples living together likely have just as much joint financial responsibility as married couples. Here are three practical tips to help couples manage and invest money together, even if they’re not legally bound to do so.

Articles by Betterment Editors
By the Editorial Staff Betterment Resource Center Published Feb. 10, 2016
Published Feb. 10, 2016
3 min read
  • Unmarried couples living together are on the rise. With this commitment comes added responsibility over shared expenses, as well as discussions about goals and expectations.

  • Different strokes for different folks: Ways to maintain balance include reversing bill-paying roles, splitting bills by percentage of income, and maintaining both individual and joint accounts.

Cohabiting couples are on the rise, and not just in expensive real estate cities, such as New York and San Francisco, but across the nation.

Back in the 1960s, the number of cohabiting couples (if they even admitted it; cohabitation was illegal in many states) made up less than 1% of households

But over the last 50 years, the number of unmarried couples living together has increased by nearly 900%. The average marrying age has also increased by almost eight years for both men and women, from their early to late 20s, if and when couples tie the knot.

As if dividing chores and sharing a bathroom (or a remote control) weren’t hard enough, many couples must now also handle finances as if they’re married; a serious and potentially uncomfortable subject to tackle, given the non-legally binding nature of their living situation.

For those considering moving in with a significant other, or wishing to have more clarity in a shared financial life, here are three practical ways designed to help manage and invest together.

1. Take Turns Managing the Finances

Paying the bills and managing accounts can be a mutual responsibility that leaves both partners feeling empowered, involved, and accountable.

If one person in the relationship is more organized, or just enjoys doing it more, there may be a temptation to delegate the bill-paying role as a sole responsibility. The problem with this, however, is that if anything should happen to the designated partner, the other could be left without a clue about how to access bills and shared financial information.

To balance this situation, try periodically switching who manages the finances—this includes getting acquainted with every aspect of the process from logging in (try using secure password management software, such as LastPass or 1Password), to allocating funds.

Take turns handling the accounts and paying bills every three or six months, for example. That way, if there is an illness, emergency, or unexpected breakup, either person can pick up where he or she left off more easily, with personal finances experiencing very little disruption.

2. Split Bills By Income

Dividing bills 50/50 can work if you make roughly the same amount of money. But when income levels in the relationship are vastly different, the potential exists for resentment or bruised egos to develop.

Here, emotional support and understanding one another is key. Neither partner should feel punished for losing a job, taking a low- or no-pay internship, or experiencing income disparities beyond control.

One solution is to split bills in proportion to take-home pay. This is easily managed with spreadsheet software, such as Google Sheets, and helps to balance the household obligations more fairly.

Consider this simple example: After taxes, Perry takes home $7,500 monthly, while Andy takes home $5,000 monthly, for a combined total of $12,500. Their apartment rent is $2,300 a month, with utilities at $600, a total of $2,900.

Because Andy brings home 40% of the combined household income, his monthly obligation is $1,160, or 40% of the total combined housing expense of $2,900, while Perry contributes $1,740, or 60% of $2,900.

This strategy also helps to relieve some of the lifestyle pressure on the partner with less income, and opens up opportunities to set goals together, such as establishing an emergency fund or saving for retirement.

3. Use a “Three-Pot” System

Financial independence is possible even if you are one half of a cohabiting couple. One tactic is a “three-pot” system.

Consisting of two separate individual accounts and one joint account, this strategy can help avoid any unnecessary tension, or worse, a power struggle between finances.

Once you decide how your respective incomes are to be divided for shared expenses such as the household bills, you can then keep any personal funds, well, personal.

Both members of the couple should be mature enough to manage personal expenses without having to answer for them, while simultaneously doing their part for the household.

A three-pot system can also allow one person to occasionally “treat” the other without added drama.

Sharing a household comes with a new joint commitment to money management. Your finances shouldn’t have to be a source of difficulty, and cohabiting couples must be honest about their financial habits and expectations.

No matter what you decide to do, decide together that cohabiting is an opportunity for a partnership where both of you can thrive emotionally as well as financially.

Recommended Content

View All Resources

Displaying Performance to Shape Better Investor Behavior

Understanding your accounts’ performance can feel complicated. We’re advancing how we display performance to help answer your questions and make stronger investment decisions.

Can You Have a 401(K) and an IRA?

This is a great question. The answer is yes, you can have both. Should you have both? It depends.

What Is Life Insurance?

What does life insurance do, who needs it, and why is it important?

Explore your first goal

Cash Reserve

Our high-yield account built to help you earn more on every dollar you save.

Safety Net

This is a great place to start—an emergency fund for life's unplanned hiccups. A safety net is a conservative portfolio.


Whether it's a long way off or just around the corner, we'll help you save for the retirement you deserve.

General Investing

If you want to invest and build wealth over time, then this is the goal for you. This is an excellent goal type for unknown future needs or money you plan to pass to future generations.

See details and disclosure for Betterment's articles and FAQs.