The Money Mustache Community
Learning, Sharing, and Teaching => Ask a Mustachian => Topic started by: pk_aeryn on December 17, 2015, 05:21:22 PM
-
This may stray a little into relationship advice, but I do want some Mustachian opinions on money matters.
I've been with my boyfriend for 4 years. We were discussing moving into a 2 bedroom apartment. In our area of Los Angeles, we were looking at a place with a rent of 1800-2000/mo, which for LA is quite inexpensive. We had a disagreement on how we should split the rent. He makes literally twice the amount that I do (I make 60k, he makes 130k). I said that we should pay according to percentage of income, because that way we could save into investment accounts an equal percentage of our money. (We are both big savers vs spenders) So I proposed that I should pay 1/3 of the rent, but split food and etc equally. He really wanted to split everything straight down the middle, but eventually came around when it was a dealbreaker for me and I told him I'd rather live separately if we were going to split everything 50/50. Because of our income disparity, if I moved in with him and split things 50/50, I'd only save $100 a month off of current expenses by living together, while he would be saving ~$500 and I said it wasn't fair that he would be saving so much more than me. He said it was fair, because 50/50 is the same, thus fair.
Ultimately, he got a BIG raise at work, and decided instead he wanted to put that raise toward a mortgage.
So now he's buying a house, all with his own money (I will not on the mortgage).
He wants me to move into his future house, and I would love to. But we can't agree on what rent I should pay.
He's looking at a mortgage that might be around $3000/mo, but expects with tax breaks that the mortgage might end up being effectively $2400.
Originally, after our disagreement on apartment rent, he told me that he loved me and wanted me to move in, regardless of what I could pay. He said he'd be happy with whatever I contributed. Eventually, I proposed to pay him $600 in rent/mo. He was immediately unhappy with this amount.
My argument was thus:
* I can't control that he wants to buy a house right now, versus rent. I'm not making the money to support the expenses of an entire house.
* My commute, in the area he can afford, will be 30% longer. If I stayed in my current apartment, the commute will be less expensive.
* He makes literally double what I make, and we should base our contributions on percentage of income.
* My medical costs will increase because I'm allergic to his cat.
* He would be buying the house regardless of our relationship status, so any money I contribute is going to his savings.
So I decided on the $600 because that's what I would pay if we were still renting and I could have more of a decision on where we lived and what the rent would be.
Despite him saying that he would welcome whatever contribution I could make, he was immediately disappointed and said it wasn't enough. I reminded him of what he had said, in addition to my reasons on how I came to that amount (ie I wasn't trying to lowball him for the sake of it) but he said he has changed his mind and would resent me if I only contributed that much.
We went back and forth a lot and finally agreed on $900 and that would include utilities.
But honestly, I'm not saving that much money off my current expenses, and I was really hoping that moving in together would allow me to really increase my savings rate. I guess he thinks the same thing though, but I really don't think I should be paying close to half his mortgage when he makes so much more money than me, and when he would be buying this house regardless of whether I live with him or not.
The whole debate has actually really soured my attitude toward him, as I feel like he's only looking out for his best interest and not for mine at all. But maybe he thinks the same thing about me.
So who's more right here? Am I being unreasonable wanting to pay only $600?
-
When I moved in with my fiance, we combined finances (we were essentially a married couple; we just hadn't gotten around to the actual wedding yet because we wanted a nice ceremony/reception/honeymoon but had other fiscal priorities, like buying a house). When I was unemployed she paid for pretty much everything, and vice-versa. Stuff gets paid out of whichever person's account happens to be most convenient. It's worked out just fine so far.
From my perspective, your relationship isn't strong enough to cohabit. But then again, my perspective might be old-fashioned (even though I'm 31).
-
My first thought: Run far away.
Ok, maybe that is unfair. But you shouldn't be paying more than you would be spending on housing anyway. How much are utilities? 300 for utilities (900-600) seems like A LOT. Maybe things are that much more expensive in LA, and that is coloring my view.
I guess ultimately, unless you are thrilled to move in together for the 900, I wouldn't. If you have any reservations, now is the time to listen to them. The extra commute alone is probably worth at least a hundred or so bucks a month.
-
First of all, I would be skeptical about the strength of your relationship if you two can't agree on something pretty standard and have to seek advice from an Internet forum.
Secondly, I think $900 is pretty fair. It's half the lower amount of the original apartment cost, he's paying utilities, plus you'll live in a house instead of an apartment. Good luck finding a decent 1 bedroom in LA with all utilities paid. My friend in LA has a tiny little apartment with no AC and pays $1100 plus utilities.
I could go on, but like I said, the problem isn't of what is fair, it's of your relationship. In my opinion, truly happy couples aren't "keeping tabs" or even really care who pays what, they just look at the big picture and the long term.
-
I wouldn't do it. Too far from work and his expectations are out of whack.
Sent from my iPad using Tapatalk
-
I could go on, but like I said, the problem isn't of what is fair, it's of your relationship. In my opinion, truly happy couples aren't "keeping tabs" or even really care who pays what, they just look at the big picture and the long term.
Yeah that's kinda what I figured -- it's not an objectively unfair rent for Los Angeles, but I don't want to be his roommate, I want to be his life partner, and with someone who isn't trying to get close-to-fair market rent out of me.
-
Your boyfriend is a schmuck. And you should be happy that you found it early enough.
-
Your boyfriend is a schmuck. And you should be happy that you found it early enough.
Pretty much sums it up.
My first thoughts are, if HE decided to buy a house then HE should definitely be paying for the bulk of expenses. Even though it doesn't really matter, you haven't said what he suggested as "fair" and sounds like he's been making you throw out the first offer, then pouting when it isn't what he expected. A house is a big decision and really should be decided together if both of you are planning on being life partners. I mean really, what if he buys a house (he gets to choose since he's buying it) and then you get married and finally reveal that you hate the house he chose?
-
I could go on, but like I said, the problem isn't of what is fair, it's of your relationship. In my opinion, truly happy couples aren't "keeping tabs" or even really care who pays what, they just look at the big picture and the long term.
Yeah that's kinda what I figured -- it's not an objectively unfair rent for Los Angeles, but I don't want to be his roommate, I want to be his life partner, and with someone who isn't trying to get close-to-fair market rent out of me.
What debt do you have? What debt does he have?
Also, he now pays double what you are, and now your money is going to your mortgage principal instead of an apartment. I think you're overreacting. You're saying it all "shouldn't matter," and then you're really making it matter.
-
I would not do it. He should want to help you. He is the only one gaining anything.
-
I would not do it. He should want to help you. He is the only one gaining anything.
If his mortgage and utilities are 3000, and she's paying 900, how is he the only one gaining anything?
-
What debt do you have? What debt does he have?
Also, he now pays double what you are, and now your money is going to your mortgage principal instead of an apartment. I think you're overreacting. You're saying it all "shouldn't matter," and then you're really making it matter.
Neither of us has any debt. My money is not going to a mortgage principal. My name isn't going to be on the house.
My thought is that we should have equal opportunity to save percentages of money and I can't figure out if what he will be able to invest is going to be equal percentage to what I could invest, if I pay $900.
But ultimately you guys are right, having to think about it this hard means that we are probably not compatible, finances wise.
-
I'm in a really similar situation in that my boyfriend and I live together in a house that he owns. He makes about 3x as much as I do (I make 40k, he makes 120k).
On the money topic: I don't pay rent, instead we split up expenses and are each responsible for certain bills. It works out to each of us paying for amounts that are roughly proportional to our incomes. So he pays the mortgage and taxes, and I pay utilities, groceries, and a few other things like gym memberships. It works out because neither of us were interested in keeping a tally and splitting things up or transferring money to each other each month.
On the relationship side of things: I'm hearing a lot of unilateral decisions being made. He decided he wanted to buy a house. He decided what neighborhood to live in. I wouldn't be happy with that. When my boyfriend and I decided to move in together we talked about neighborhoods we wanted to live in, what kind of a house we wanted, etc. and then looked from there. We ended up with a house that is very much a compromise between our two ideals (and located in between our two jobs). Even though the mortgage is his, the house is definitely "ours" from an emotional standpoint.
I'm not trying to hold up our relationship as perfect by any means, and we still have work to do in deciding how to manage our finances - how much to combine or leave separate, how that would or wouldn't change with marriage, etc. It's a weird stage to be in. It can also be uncomfortable being the one who makes so much less.
One thing that we did before moving in together was write up an agreement about major financial points. I'm sure it's not legally binding, but it was a good exercise to force us to sit down and talk about expectations. (If my cat needed surgery, would I expect him to contribute? What if he wanted to buy a new car? If we broke up, how long would I have to move out? Who would pay for home repairs/renovations?)
-
Head for the hills. This is about more than money, and he sounds like a jerk.
-
I would not do it. He should want to help you. He is the only one gaining anything.
If his mortgage and utilities are 3000, and she's paying 900, how is he the only one gaining anything?
Because her commute is increasing and maybe only saving $100 off her current expenses. While he gets a house and someone else helping to pay his mortgage down?
I agree with the others - I think your boyfriend is being unreasonable and controlling. I think the original amount of $600 (plus utilities?) was fair given your circumstances.
-
This has "no way" written all over it. This whole thing is benefiting him more than you and from what you wrote, it seems to lack balance. The thing that bothers me about this, is the lack of cohesion in decision making. If you're going to go dutch on spending, then it needs to be fair, regardless of who makes more or less. He is getting hung up on the total spend amounts rather than what it is really costing each of you in terms of spending %.
I went through this myself with my SO. She made less than I did so we split the rent off of % and then split utilities and groceries 50/50. Worked out beautifully with no hurt feelings since it was fair. Had I just said 50/50 on the rent, she would have struggled and I would have had a lot more money to save/invest/etc. To do that to the person you say you love is really inherently selfish and self-serving. You probably didn't want relationship advice, but if you're asking a bunch of strangers online...
@Trix, easy, he's gaining equity on a property he owns and she has no legal right to.
-
I'm not going to predict the future of the relationship, but--at this point, it seems like the two of you are not (yet?) playing on the same team. Your boyfriend wants to buy his house, in the location he wants. And he wants you to pay more, even though it's actually a worse situation for you. He's making all these decisions to suit himself, and inviting you to move in at your own expense. Meanwhile, you have the expectation that it should actually cost you less to live with him.
There are lots of ways to manage relationships and finances. However, for it to work, the decision-making has to be shared, with the goal being the best joint outcome. That's not what's happening here. He doesn't sound like he is ready to have a life partner, frankly, at least now. Have you two discussed marriage?
-
I came in thinking "screw rent, just get married" but as I read further I thought "find a different man."
-
On the relationship side of things: I'm hearing a lot of unilateral decisions being made. He decided he wanted to buy a house. He decided what neighborhood to live in. I wouldn't be happy with that. When my boyfriend and I decided to move in together we talked about neighborhoods we wanted to live in, what kind of a house we wanted, etc. and then looked from there.
So, to be fair, he has been taking me to meetings with his broker and very much wants me to be involved in the choosing of the house. The issue is, the only area he can afford is North Hollywood, which is far from my work. We cannot compromise because I work in Mid-Wilshire area (and in my industry, all jobs are in this area!), and housing between NoHo and MidWilshire is all out of the question, from a financial standpoint, safety standpoint and sanity standpoint. So I don't ultimately begrudge the location, just wanted acknowledgement that I would be increasing my commute and for him to be understanding of that.
Had I just said 50/50 on the rent, she would have struggled and I would have had a lot more money to save/invest/etc. To do that to the person you say you love is really inherently selfish and self-serving. You probably didn't want relationship advice, but if you're asking a bunch of strangers online...
This is really what I wanted validation about, that I wasn't crazy to think that fair is actually by percentage of income. For whatever reason, he said he thought I would be taking advantage of him, especially when I asked if it would be cheaper to get on the same health plan and combine car insurances. This to me was the biggest red flag, because if paid him the difference of a joint health insurance premium, and I saved money at no cost to him, why wouldn't he want to help me do that? Right now, his union provides him free insurance, so if I paid him the cost of the co-habitation premium, he's not losing anything.
-
My bf moved with me to the LA area from Illinois last year (he was in Chicago, I was 3 hrs away); my research advisor moved universities and he was able to internally transfer in his job, which was *awesome*. We were together almost 3 years at that point, now at 4.5. Our situation was similar to yours in terms of distribution but total was like half yours.
We set out expectations as follows:
->As the lower earner I set my upper limit on rent, and we would split equally. We didn't really discuss this at length, but if he had wanted a pricier apartment, I was ready to suggest he cover the difference from half my proposed amount to the higher cost. (My limit was $1500. We ended up finding an awesome place for $1250 largely by getting lucky.)
->We would split all other normal living expenses equally (groceries/tp/cleaning, internet, electric, etc)
-> He actually proposed that he would cover the cost of buying a car, but we would split operating expenses (gas, insurance). He drove to work but was generous with making it available to me as needed (when I have doctor appt or similar mid-day, need to take something heavy/bulky to work, etc). We also worked together on picking it out (he wanted to make sure I was comfortable driving it <3)
-> We would buy our own "stuff" or any extras that the other does not agree upon (e.g. if he wanted to get cable, which he doesn't, or when he wanted to get an Amazon Echo, which he actually did) and not have more than "mild disapproval" power over each other's choices. We aren't married yet, after all.
How it actually worked out: personal items sometimes end up in a Target run and it seems stupid to check out separately. We also buy household stuff jointly (we needed a lamp, chairs, a few rugs, etc that we didn't have in IL because our roommates did).
I gave you that summary to show (a) how another couple (quite functional, I'd like to think!) handles the situation, and (b) where my biases might lie, so you could take my suggestions with a grain of salt.
I think you should figure out what your alternate housing would look like if you didn't move in with him (Shared apt with roommate, rent+utilities? Studio apt in a cheaper neighborhood? Whatever you're doing now?). Offer him that as rent in his house. I wouldn't include the costs of a longer commute in that calculation; it's hard to account for how much time and money you'd spend commuting to see him if you lived separately. If he thinks your suggestion is unreasonable, I have to agree with more4less:
Your boyfriend is a schmuck. And you should be happy that you found it early enough.
You aren't married or even engaged yet so I don't think it's right for the lower earner (i.e. you) to suggest to split expenses by income %; it would be different if he proposed it, but it may feel to him like you're trying to take advantage of his income/live off him. BUT like you said, you shouldn't be responsible for his decision to buy a house; if he wants "extras" over the standard of living YOU can afford, I think it's his responsibility to (a) do/buy these things without your participation or (b) subsidize your participation by paying anything over what you CAN afford (or are willing, or have in your budget), if he wants you to partake.
I do think things change when you get married, as you become one legal entity and have invested in each other by entering that contract and thus some form of pooling finances makes sense (whether that's actual 100% joint pool, perhaps less "fun money" or similar, or responsibility for different bills/expenses, or percentage-based splits). But as bf/gf you're independent entities even if you household together, and it's responsible to treat your finances as such.
-
What debt do you have? What debt does he have?
Also, he now pays double what you are, and now your money is going to your mortgage principal instead of an apartment. I think you're overreacting. You're saying it all "shouldn't matter," and then you're really making it matter.
Neither of us has any debt. My money is not going to a mortgage principal. My name isn't going to be on the house.
My thought is that we should have equal opportunity to save percentages of money and I can't figure out if what he will be able to invest is going to be equal percentage to what I could invest, if I pay $900.
But ultimately you guys are right, having to think about it this hard means that we are probably not compatible, finances wise.
So let me get this straight:
You don't look at the mortgage as "your" mortgage, even though you "plan on spending your life together"
But... He should give you a "special" deal, so you can save more for your "own" retirement? Not "the two of yours" retirements?
My fiancé of 3.5 yrs (who I'm legally marrying tomorrow) and I have been in a very similar situation. When she was working I made 4x what she did, yet she put a much higher percentage towards "our"'expenses.
She didn't care nor whine. She knew that everything together $ was OUR plan. Vice versa, too. She knew I wasn't going to do shit without her and if she couldn't afford it, I paid. I brought her on tons of vacations where she didn't spend a dollar because I knew she couldn't afford it. She isn't working now since she's traveling with me so I'm giving her $5500 to max out her Roth IRA. Well, "our" Roth.
In terms of being "fair" he's being totally fair. The problem is I don't think either of you should make such a huge issue and argue about it. That's the problem, and it's both of you.
-
When I moved in with my fiance, we combined finances (we were essentially a married couple; we just hadn't gotten around to the actual wedding yet because we wanted a nice ceremony/reception/honeymoon but had other fiscal priorities, like buying a house). When I was unemployed she paid for pretty much everything, and vice-versa. Stuff gets paid out of whichever person's account happens to be most convenient. It's worked out just fine so far.
From my perspective, your relationship isn't strong enough to cohabit. But then again, my perspective might be old-fashioned (even though I'm 31).
This guy has it figured out.
You seem like you want this, yet you're really doing way too much to keep tabs.
-
He said he thought I would be taking advantage of him, especially when I asked if it would be cheaper to get on the same health plan and combine car insurances. This to me was the biggest red flag, because if paid him the difference of a joint health insurance premium, and I saved money at no cost to him, why wouldn't he want to help me do that? Right now, his union provides him free insurance, so if I paid him the cost of the co-habitation premium, he's not losing anything.
Technically speaking, economically speaking, you would be taking advantage of him.
You are accruing a benefit (paying less for your health insurance), and "selfishly" not sharing that benefit with him. Even though he's the reason that the benefit is available to you.
The "fair" thing to do would be to split the benefit. I.e. suppose you had been paying $150 for insurance, and the co-habitation premium was cheaper at $100, then the net benefit would be $50. You could each benefit by $25, if you paid him $125 to join his insurance.
But that's purely a technical/economic argument. As if you were strangers.
When looking at it through the lens of a relationship, things are much grayer.
I don't think any specific division of costs is either good or bad. Many couples have many different ways of doing accounting and sharing, and the only really important thing is to find something that feels good to everyone involved. That could be anywhere from 50/50 to 100/0. There are lots of compounding factors like relative-salaries, costs, dependents, habits, personalities, etc.
But it should be a pretty strong signal that you two are not approaching the problem from similar perspectives.
I think you should talk to him about his perspective, and share yours, rather than talking about a specific division or dollar amount.
Maybe he thinks of money differently than you (and others on the forum) from his upbringing.
Or maybe he'd be willing to go 100/0, since you're in a relationship, but 75/25 would feel weird to him since it's somewhere between relationship and market-rate.
I wouldn't sour on him based on the number, without understanding his perspective.
(Though maybe you will, once you hear his perspective.) ;^)
-
Been there, done that. PAY HALF. That way everything will be even. Get a receipt or writing on anything that means anything to you. It can end, and they will take the stuff that messes with your head. In the end money doesn't matter, you can end up with a 20$ car that you both paid for, but a heirloom was lost, get my drift?
-
My fiancé of 3.5 yrs (who I'm legally marrying tomorrow) and I have been in a very similar situation. When she was working I made 4x what she did, yet she put a much higher percentage towards "our"'expenses.
You had *made a promise* to each other to get married. Though perhaps not legally binding, it was binding between the two of you by tradition and culture. You can't necessarily read the same thing into a relationship, even if it's 4 years old...
Pre-emptive congratulations on marrying your fiancée! :)
-
This may stray a little into relationship advice, but I do want some Mustachian opinions on money matters.
I've been with my boyfriend for 4 years. We were discussing moving into a 2 bedroom apartment. In our area of Los Angeles, we were looking at a place with a rent of 1800-2000/mo, which for LA is quite inexpensive. We had a disagreement on how we should split the rent. He makes literally twice the amount that I do (I make 60k, he makes 130k). I said that we should pay according to percentage of income, because that way we could save into investment accounts an equal percentage of our money. (We are both big savers vs spenders) So I proposed that I should pay 1/3 of the rent, but split food and etc equally. He really wanted to split everything straight down the middle, but eventually came around when it was a dealbreaker for me and I told him I'd rather live separately if we were going to split everything 50/50. Because of our income disparity, if I moved in with him and split things 50/50, I'd only save $100 a month off of current expenses by living together, while he would be saving ~$500 and I said it wasn't fair that he would be saving so much more than me. He said it was fair, because 50/50 is the same, thus fair.
Ultimately, he got a BIG raise at work, and decided instead he wanted to put that raise toward a mortgage.
So now he's buying a house, all with his own money (I will not on the mortgage).
He wants me to move into his future house, and I would love to. But we can't agree on what rent I should pay.
He's looking at a mortgage that might be around $3000/mo, but expects with tax breaks that the mortgage might end up being effectively $2400.
Originally, after our disagreement on apartment rent, he told me that he loved me and wanted me to move in, regardless of what I could pay. He said he'd be happy with whatever I contributed. Eventually, I proposed to pay him $600 in rent/mo. He was immediately unhappy with this amount.
My argument was thus:
* I can't control that he wants to buy a house right now, versus rent. I'm not making the money to support the expenses of an entire house.
* My commute, in the area he can afford, will be 30% longer. If I stayed in my current apartment, the commute will be less expensive.
* He makes literally double what I make, and we should base our contributions on percentage of income.
* My medical costs will increase because I'm allergic to his cat.
* He would be buying the house regardless of our relationship status, so any money I contribute is going to his savings.
So I decided on the $600 because that's what I would pay if we were still renting and I could have more of a decision on where we lived and what the rent would be.
Despite him saying that he would welcome whatever contribution I could make, he was immediately disappointed and said it wasn't enough. I reminded him of what he had said, in addition to my reasons on how I came to that amount (ie I wasn't trying to lowball him for the sake of it) but he said he has changed his mind and would resent me if I only contributed that much.
We went back and forth a lot and finally agreed on $900 and that would include utilities.
But honestly, I'm not saving that much money off my current expenses, and I was really hoping that moving in together would allow me to really increase my savings rate. I guess he thinks the same thing though, but I really don't think I should be paying close to half his mortgage when he makes so much more money than me, and when he would be buying this house regardless of whether I live with him or not.
The whole debate has actually really soured my attitude toward him, as I feel like he's only looking out for his best interest and not for mine at all. But maybe he thinks the same thing about me.
So who's more right here? Am I being unreasonable wanting to pay only $600?
lol, your BF is right, you are wrong. Your lower income doesn't entitle you to paying less. It's not fair to him that because of YOUR lower income he has to pay more so you can save more. It's your own doing, not his, so you asking him to pay more is unfair.
-
This may stray a little into relationship advice, but I do want some Mustachian opinions on money matters.
I've been with my boyfriend for 4 years. We were discussing moving into a 2 bedroom apartment. In our area of Los Angeles, we were looking at a place with a rent of 1800-2000/mo, which for LA is quite inexpensive. We had a disagreement on how we should split the rent. He makes literally twice the amount that I do (I make 60k, he makes 130k). I said that we should pay according to percentage of income, because that way we could save into investment accounts an equal percentage of our money. (We are both big savers vs spenders) So I proposed that I should pay 1/3 of the rent, but split food and etc equally. He really wanted to split everything straight down the middle, but eventually came around when it was a dealbreaker for me and I told him I'd rather live separately if we were going to split everything 50/50. Because of our income disparity, if I moved in with him and split things 50/50, I'd only save $100 a month off of current expenses by living together, while he would be saving ~$500 and I said it wasn't fair that he would be saving so much more than me. He said it was fair, because 50/50 is the same, thus fair.
Ultimately, he got a BIG raise at work, and decided instead he wanted to put that raise toward a mortgage.
So now he's buying a house, all with his own money (I will not on the mortgage).
He wants me to move into his future house, and I would love to. But we can't agree on what rent I should pay.
He's looking at a mortgage that might be around $3000/mo, but expects with tax breaks that the mortgage might end up being effectively $2400.
Originally, after our disagreement on apartment rent, he told me that he loved me and wanted me to move in, regardless of what I could pay. He said he'd be happy with whatever I contributed. Eventually, I proposed to pay him $600 in rent/mo. He was immediately unhappy with this amount.
My argument was thus:
* I can't control that he wants to buy a house right now, versus rent. I'm not making the money to support the expenses of an entire house.
* My commute, in the area he can afford, will be 30% longer. If I stayed in my current apartment, the commute will be less expensive.
* He makes literally double what I make, and we should base our contributions on percentage of income.
* My medical costs will increase because I'm allergic to his cat.
* He would be buying the house regardless of our relationship status, so any money I contribute is going to his savings.
So I decided on the $600 because that's what I would pay if we were still renting and I could have more of a decision on where we lived and what the rent would be.
Despite him saying that he would welcome whatever contribution I could make, he was immediately disappointed and said it wasn't enough. I reminded him of what he had said, in addition to my reasons on how I came to that amount (ie I wasn't trying to lowball him for the sake of it) but he said he has changed his mind and would resent me if I only contributed that much.
We went back and forth a lot and finally agreed on $900 and that would include utilities.
But honestly, I'm not saving that much money off my current expenses, and I was really hoping that moving in together would allow me to really increase my savings rate. I guess he thinks the same thing though, but I really don't think I should be paying close to half his mortgage when he makes so much more money than me, and when he would be buying this house regardless of whether I live with him or not.
The whole debate has actually really soured my attitude toward him, as I feel like he's only looking out for his best interest and not for mine at all. But maybe he thinks the same thing about me.
So who's more right here? Am I being unreasonable wanting to pay only $600?
I'm gonna address the part about the apartment only, because I haven't thought of how to deal with the house yet:
I'm going to disagree with the commentators here; you are being very unreasonable. You should ABSOLUTELY split things down the middle; otherwise, you are leaching off of him. Not only will feel indebted to him, it will create issues. I wouldn't agree to him pay most of the rent until you are serious enough that you are thinking about marriage (or something of similar seriousness). At that point you would be sharing finances. And that is the major point; not splitting rent equally means you are sharing finances, except you aren't serious enough to fully share them. What you might consider is, tell your boyfriend "I can afford this much rent a month, let's find an apartment for double that much so we can split it evenly".
You aren't poor, you make a very respectable $60k a year. Fork it up until you've had enough time to know where the relationships is going; or find some more affordable for you. I might feel differently if you had a low income level, but 60k is enough to take care of yourself.
-
Tell him you want to find a place where you can both share expenses and then go out and find an apartment for $1,200 since you only want to pay $600 in rent. Show him the place and if he refuses to move in with you, well you have your answer.
-
No comment on what's fair - I think there are good points on both sides of this - but I can say that I shared an apartment with my best friend shortly after we graduated college. We moved into an apartment that he picked based on his budget. Even though he paid slightly more than I did, it was still out of my range. It was in a HCOL area and I basically made enough to cover my living expenses and that was it. (Realistically if I had understood more about budgeting and MMM principles I would have been in a much better situation even living there, but I didn't so it was painful.) It was a constant source of fear and stress for me; I resented him and he felt guilty. It had a very negative impact on our relationship.
Obviously the particulars of your situation are different but I think moving into a situation which will affect your ability to meet your financial goals and not add sufficiently to the joy in your life might ultimately destroy your feelings for him and your relationship.
-
Likely the riskiest thing you will ever do in your life is stand up on an altar with someone and say "I do." Or even if you don't intended to get legally married, then making that same commitment to another person qualifies.
But IMO--and I believe this very strongly--if you are going in, you gotta go all in. Combining your lives, hopes, dreams, children, in-laws, and golden years, means combining your finances too. I realize, of course, lots of people have successfully separated the two. But it will be harder to have "our lives" if you don't have "our finances." Simple statement of fact. And compared to all the other things you will be combining, finances are kind of trivial, really.
Since you are still at boyfriend/girlfriend stage, you probably aren't all in yet and that's fine, probably smart actually. One step at a time. But you should be moving in that direction. I really think he should be accommodating of your financial situation, and adjust the rent based on what you two can do together, instead of straight 50/50. Because that will be a metaphor for the rest of your life.
-
A marriage is a full combining of assets and debts. Short of that expenses should be paid 50/50.
-
On the apartment, I think he was right, he shouldn't have to subsidize your living.
The house is a different story, since it sounds like you had no say in moving into a more expensive living situation. Question: If you get a 40% raise, would you willingly chip in a proportional increase in rent?
-
I think if you want to live together now, you should look at apartments you can afford 50% of. And talk about when to buy property together.
In the house situation, I think you'd want some kind of shared finances, and I don't think you're ready.
Another perspective on the mortgage, is that if you cohabiting with the boyfriend for a year, you might own half the house (depending on local laws).
Does he know why you want to work in percentages? Do you know if he sees his retirement savings as joint savings? Is he planning to get married, or is the house your wedding/commitment?
-
I'd LOVE to hear the boyfriend's side of this.
My first thought, too, was "run." But that thought was directed at the boyfriend and not the OP.
If you truly loved this person, none of this nickel and dime shit would matter at all. That you're posting this on a forum full of strangers says quite a bit about the nature of this relationship.
-
I only read like the first 10 comments and I disagree with almost all of them as well as OP. I think if there is any question about who pays what, you should just split everything 50/50, the only exception to this would be if you had to relocate and leave your job or something. However since he is getting a mortgage, I think you should pay what it would cost to rent a room of the house.
-
Posts like this end up becoming an unsolicited referendum on the relationship. It's not just about the money, it's what each parties' actions and thoughts about money say about their attitude toward the relationship (and each other).
When my DH and I were dating and discussing getting an apartment together (about 6-9 months after we met) he also offered to support me, financially, so I could go back to school and retrain for a new career. The hope was that this would improve my professional prospects and I would be happier in my new job.
I was shocked and refused. But it certainly wasn't lost on me that 1) he was generous towards me, 2) he was thinking about my well-being, and 3) that seemed like the kind of offer you'd make to a someone you were seriously viewing as a potential life-partner.
When we moved in together, we picked an apartment that saved us both money (compared to our solo rents) and split rent 50/50. New location that didn't worsen either person's commute. Everything else we kind of just took turns paying for stuff (so trying for 50/50, but not really keeping track.) He made 20-50% more than me (I had variable income, he got a new job and raises) but we were living a lifestyle that cost me less than when I lived alone. I thought it was, overall, a fair arrangement (and financially benefitted us both.)
I recount all that because there are a few things going on here. On the surface are the details of cohabitation. Can you agree on a cohabitation situation that benefits you both fairly equally, advances both your goals fairly equally (you: saving, him: house), and requires any sacrifices to be fairly equally borne?
Go deeper and there are the relationship issues. That you feel the need to wave your hands and say, "wait, what about how this is beneficial to me?" strongly suggests problems. The way you describe your BF he sounds selfish, and if you hope to be part of a strong, happy marriage (or similarly serious partnership), selfish does not fly.
-
My spouse and I have always split our expenses by what we earn (we have my money, your money and our money), it works incredibly well for us. Others can do as they please.
I disagree that the only way to fairly split costs is 50/50. There is more to fair than 50/50, would anyone say we should split all our food 50/50 because that would be fair - dispite the fact that SO loves bananas and I hate them, or that SO is a foot taller than me and needs to eat more. Where does it end? Do I need to split feed him half my birth control pills 50/50 with him too?
If you can't find an amount of rent that feels good for both of you, then moving in probably isn't the right thing to do.
I'm concerned that he said that he'd be happy with whatever you decide to contribute and then changed his mind, and more concerned that he is okay with you being ill due to moving in with his cat.
Edited for clarity
-
I would like to give OP a slightly different take on the issue. The only situation where this money splitting is going to matter is if you and bf split up. If you stay together then eventually your money will be joint (in practice, even if you never think of it that way).
So, maybe it's better to think about various set ups and how that would make you feel after a potential break up. Would you rather live separately and save less, or live together and save more (even if he benefits more than you)? Maybe run some numbers on what splitting the mortgage would mean.
In the end, I'm not sure whether being so blasé about how to split the money is a good idea (even though it's what I've done in my life). It feels good when you're doing it, but can lead to regrets if you split up and you've been too generous.
I would advise to explore the seriousness and future of the relationship and make sure that both you and bf are going to be able to find a common ground if/when the relationship gets more serious. You don't want to commit years and years to a relationship if your values are never going to mesh.
-
It's good that the both of you are having this kind of conversation now instead of down the road, when you're a married, with a house and kids. Everyone has different values, which are reflected on how you view spending money. I personally split my rent with my wife, then gf, when we first moved in. We chose the place together and made sure to talk about the details with an open mind. We disagreed on a few things but we always had the understanding of helping each other out. For me even if I made less than her I would still pay for half of the rent because that's just what I think is fair.
I would take a step back and start at the beginning. Why does each one of you want to move together in the first place? If it's just for economic reasons then, fair is 50/50 and pay for what you use. If it's because you want to be together more and build on your relationship then getting what you think is fair economically should naturally become secondary.
Maybe talk about the long-term and it might help put things into perspective for both of you. If he is already thinking marriage then ask him why he thinks it is important that you pay your fair share if whatever you have will end up his anyway?
-
I am not old fashioned (at all), but I don't think you should move in with him at this time. There are just too many red flags here.
-
If you're not ready to completely combine your finances, you're not ready to live together. No 60/40, no 50/50, just 100 - everything is 100% "ours", not "yours" and "mine". I know that there are people that have successful relationships and keep separate finances, but it's rare.
-
I disagree that the only way to fairly split costs is 50/50. There is more to fair than 50/50, would anyone say we should split all our food 50/50 because that would be fair - dispite the fact that SO loves bananas and I hate them, or that SO is a foot taller than me and needs to eat more. Where does it end? Do I need to split my birth control pills 50/50 with him too?
I agree with you that there are other fair ways than 50/50 (and depending on the situation, they might be more fair). But birth control pills seem to be a weird example. Unless you were taking them without his knowledge, yes, he should be paying 50%. He is getting exactly the same use out of them as you: Not having a child at an inopportune time.
-
Expenses should be paid proportionally by income. Qualititative costs (longer expense, allergy) should be considered as well - perhaps non-financially. He should ditch the cat and stop being a cheap <person>
-
I think you're right and he's wrong. Given all of the considerations you listed, I think $600-900 in rent from you is fair.
When I moved in with my boyfriend (now husband of almost 10 years), I had 10K in student debt and he just bought his first condo. This was a condo that he could afford on his own and would have bought regardless of me/our relationship. He had a good job after graduation and no debt. He invited me to live with him rent-free while I found a job and paid off my debt. When I found a job a month later, I started paying for our groceries, but no more than that (until my debt was paid off). Once the debt was gone (around 9 months later), I paid the mortgage and other expenses as a proportion of my income vs his (I think it was around 40%).
I'm not saying this is what you should expect/what is normal/my boyfriend is better than yours, but we were 21 years old at the time, and I am still touched by his generosity and faith in me and in our relationship. He wanted to start a life with me, and this was the way we went about it. No regrets.
-
Call me old fashioned, but as a proud male, I've always felt like I ought to be able to keep a roof over my girls head without having to get into her income.
He's not going to be much of a provider at this rate.
-
What would you pay for rent + utils if you lived on your own close to work? If you would pay $X for rent + utils and still live close to work then I think you should pay less than $X, whatever $X is. Reasons - you have higher commuting costs and higher medical costs.
I'm not old fashioned but my gf doesn't pay me rent or utils in my house. I recognized some important things beforehand - I make a lot more than her, she took on a big 32 mile commute, and still has to worry about her mortgage when her place doesn't rent out.
Does he realize you have increased costs i.e. commute and medical?
Now do understand he takes on some risk by having you move in with him. What if you accidentally damage his home?
-
I see two relationship dealbreakers in this situation.
1) Your insistence that rent distribution must be proportional to income is IMHO unreasonable and if he was posting here I'd probably advise him to run the other direction. If it was his idea as the higher earner that would be considered a noble and generous offer, but coming from the other direction it's a self-serving demand. I don't blame him for being upset if he feels like he's being taken advantage of.
2) His desire to buy a house you cannot afford when splitting 50/50 is similarly unreasonable and I don't blame you for hesitating. If you truly want to live together, you should be focusing on finding a place you can both afford. If you can afford $900 a month, then go back to the original idea of finding an $1800/month apartment and you'll be fine. But if a nicer place is more important than an equitable relationship, then your relationship is already on really shaky ground.
Money disagreements are a red flag and a major source of divorce. Don't sign up for something that you both aren't ready for. Why not simply keep your current living situation?
-
Those who think you should pay less are wrong.
You should pay rent based on what fair rent is for your location. Your income is irrelevant. No one gets cheaper rent on an apartment if they tell the landlord their income is too low.
That's what pulling your weight and contributing a fair share is all about.
-
Neither of us has any debt. My money is not going to a mortgage principal. My name isn't going to be on the house.
My thought is that we should have equal opportunity to save percentages of money and I can't figure out if what he will be able to invest is going to be equal percentage to what I could invest, if I pay $900.
But ultimately you guys are right, having to think about it this hard means that we are probably not compatible, finances wise.
You may not be compatible, but it's partly your fault for expecting him to subsidize your savings or your investments.
-
Those who think you should pay less are wrong.
You should pay rent based on what fair rent is for your location. Your income is irrelevant. No one gets cheaper rent on an apartment if they tell the landlord their income is too low.
That's what pulling your weight and contributing a fair share is all about.
This. If he offers to do it, great, but for you to expect it is pretty presumptuous.
It works both ways, he doesn't want to subsidize your life because if you break up he's lost some $. You don't want to subsidize his life because if you break up you've lost some $. Both of you seem to be worried about that outcome.
-
I don't think you current setup is fair; in my opinion, you should:
1.) Split costs 50/50 (this is if you are planning on becoming married and will eventually own the home)
2.) Pay what you would be paying to rent a place by yourself to him as rent
3.) Rent your own place until you are married
How your post reads to me is that you are looking for a home together and that of the home costs (mortgage and utilities,) you wish to pay $600 out of an actual cost of >$3k/month. I'm going to guess he could probably rent a spare room for more than that. I have been in a similar situation twice, once as the home owner and now as the renter; as the owner I charged going rate for a room in our area and when we broke up, there weren't any hard feelings about equity or ownership. Now as the renter, I pay 50% of the costs, even though I'm not currently getting the financial benefits of the mortgage. Our incomes are very close to equal and the mortgage is not a burden to either of us- with your income disparity, I think an average of options 1 and 2 would be pretty fair.
I think you've probably gotten enough unasked for relationship advice, but I will mention I'm hoping to marry the lady in the second scenario.
-
From what I've read from different posts, there are MANY ways to handle finances and moving in together that work for couples. The biggest thing is that you both feel it is fair.
Perhaps put together a bunch of different scenarios and then discuss together the pros and cons of each? Sounds like both of you are coming at this from completely different angles and viewpoints (He wants 50-50 and you want % of income) and you need to find a scenario that feels right to the both of you.
I've never been in your situation and am very traditional when it comes to marriage and finances. And to be honest, the % of income thing has always sounded weird to me. If you're keeping separate finances, then why aren't you approaching the living situation as if he was a roommate? I like what someone else suggested - this is how much you want to afford for rent. If bf want a nicer place (like a house), bf needs to make up the difference. Otherwise, you can stay in your current living situation or you can search for a place you can both afford. It does seem unfair that you would have to pay more than you want because your bf wants a nicer place.
All that said - I agree that it is rather presumptuous to "expect" your bf to subsidize your living. If he offers/wants to - great. But it shouldn't be expected. When I dated my husband, I moved into a rental house he owned. He went to a lot of effort to redo the space so that I could afford to pay him a fair market rent. (he had to add an extra bedroom so I could get more roommates and split the rent 3 ways. I think the poor guy ended up spending more than he would have if he had just subsidized my rent - especially considering we got married a year later LOL!)
-
Keep your apartment, and let him buy his house. This way, he pays all his own expenses, and you pay yours. No matter who is right, your relationship is not ready for cohabitation.
Tell him you're not going to move in with him, and wish him sincere good luck on finding a house he loves. Do not guilt him, and if he tries to convince or guilt you, tell him politely but firmly that you are not comfortable with where the conversation has led the two of you, and that at this time you feel it's better for him to move forward with his plans and you will cheer him on from the sidelines.
Perhaps this process will help shift things one way or another in the relationship. Either you both will move toward a space of thinking in terms of "our" money, "our" future, and "our" decisions -- or you won't. But moving in together like this is a bad idea.
-
I see two relationship dealbreakers in this situation.
1) Your insistence that rent distribution must be proportional to income is IMHO unreasonable and if he was posting here I'd probably advise him to run the other direction. If it was his idea as the higher earner that would be considered a noble offer, but in your situation it's a self-serving demand. I don't blame him for being upset if he feels like he's being taken advantage of.
2) His desire to buy a house you cannot afford when splitting 50/50 is similarly unreasonable and I don't blame you for hesitating. If you truly want to live together, you should be focusing on finding a place you can both afford. If you can afford $900 a month, then go back to the original idea of finding an $1800/month apartment and you'll be fine. But if a nicer place is more important than an equitable relationship, then your relationship is already on really shaky ground.
Money disagreements are a red flag and a major source of divorce. Don't sign up for something that you both aren't ready for. Why not simply keep your current living situation?
+1!!
I don't think you current setup is fair; in my opinion, you should:
1.) Split costs 50/50 (this is if you are planning on becoming married and will eventually own the home)
2.) Pay what you would be paying to rent a place by yourself to him as rent
3.) Rent your own place until you are married
How your post reads to me is that you are looking for a home together and that of the home costs (mortgage and utilities,) you wish to pay $600 out of an actual cost of >$3k/month. I'm going to guess he could probably rent a spare room for more than that. I have been in a similar situation twice, once as the home owner and now as the renter; as the owner I charged going rate for a room in our area and when we broke up, there weren't any hard feelings about equity or ownership. Now as the renter, I pay 50% of the costs, even though I'm not currently getting the financial benefits of the mortgage. Our incomes are very close to equal and the mortgage is not a burden to either of us- with your income disparity, I think an average of options 1 and 2 would be pretty fair.
I think you've probably gotten enough unasked for relationship advice, but I will mention I'm hoping to marry the lady in the second scenario.
+1
But honestly, I'm not saving that much money off my current expenses, and I was really hoping that moving in together would allow me to really increase my savings rate. I guess he thinks the same thing though, but I really don't think I should be paying close to half his mortgage when he makes so much more money than me, and when he would be buying this house regardless of whether I live with him or not.
[snip]
The whole debate has actually really soured my attitude toward him, as I feel like he's only looking out for his best interest and not for mine at all. But maybe he thinks the same thing about me.
Seems like you are both thinking of yourselves first rather than each other or your shared future, which is why I think you shouldn't move in. You both want the other to want to do more for you, and that doesn't seem to be happening.
My thought is that we should have equal opportunity to save percentages of money and I can't figure out if what he will be able to invest is going to be equal percentage to what I could invest, if I pay $900.
Why? I mean this as a genuine question. Why do you feel that you are entitled to equal opportunities to save the same percentage of money? You're not married (or thinking of it from what I can tell). You're also not earning the same amount - you choose a lower earning career, or you work fewer hours/not as hard, or you've been working shorter, etc. There could be many reasons why he's paid more. Why does being in a relationship entitle you to save equal percentages of money? To me, as Tyler wrote, it's generous for the wealthier partner to offer to pay the percentages, but it's unreasonable for you to expect or demand this. You only have the "right" (I use this term loosely):
1) to choose to live together or apart and
2) to live in a place you can afford.
How this might work out is you agree you want to live together but that you only want to spend $X on a place. If he wants a place that is $X+Y, he either can live separately or he can subsidize - but that's his choice.
btw, you do know he'll have a lot more expenses beyond the mortgage that will be all his, right? He'll have house insurance, repairs/upkeep, and utilities to pay. (He may also choose to buy furniture or do upgrades, which would benefit you.) He won't be saving as much as you think.
I'd slam him more for going back on his "anything you pay is great" but frankly, to me it seems like he expected you'd offer about what you'd pay in renting costs and was unpleasantly surprised to discover you wanted to pay quite a bit less than that. I'd be unhappy too with your offer because it's pretty unreasonable to me. It just seems like you pulled out a number out of a hat to get $600 based on what you wanted save, not what you'd pay elsewhere if you rented OR what renting the house with him might be valued at, either of which might be a fair and reasonable approaches. (And even with a longer commute, imho, $600 - in LA - is pretty low to offer to pay for rent.)
If I were you and you still wanted to move in despite all of this advise not to because your relationship is not ready for it and it sounds like one or both of you will resent the other, I might start out by saying:
1) I've been thinking a lot about our house conversations, and I think I've not quite considered your perspective. I've been working on that, and I hope you'll also consider mine.
2) I think my allergies will get worse living with your pets. I'll have to deal with the symptoms myself, but can we agree to split these costs if I move in?
3) If I were to rent elsewhere, I'd pay $900.
4) I think that the value of renting half your home is X ($1500?), however, it's not what I would choose to do absent you buying it, so I think rent elsewhere is a better estimate.
5) I expect that my commuting costs will increase by Y ($100?).
6) What do you think about if I pay $900-(Y/2), and split utilities?
-
Tell him you want to find a place where you can both share expenses and then go out and find an apartment for $1,200 since you only want to pay $600 in rent. Show him the place and if he refuses to move in with you, well you have your answer.
I agree with this. I think 50/50 is fair. But ONLY if you have a say in the place. That isn't happening.
-
I find splitting finances in a very structured/rigid way to be a bit strange for couples who are in long term relationships. To me, a partner who makes that much money should be genuinely okay shouldering the burden of most of the living costs if he or she plans on having their partner in their life for a long time. Similarly, the partner with the less lucrative field would also not be so squeamish about having a lower personal savings rate because they view the income as a joint venture. Whenever people get really freaked out about supporting their partner financially, I have to question the long-term prospects of the relationship. The only reason to be so adamant about “my money/their money” is because you are actively protecting your assets against a breakup or something going wrong. To me, this type of argument indicates a serious lack of trust/faith in eachother and the relationship. Then again, I'm more old school and view living with someone as the step before marriage, where alot of people nowadays often live with multiple romantic partners throughout their lifetimes with no intention of getting married or staying with that person forever.
-
Completely honest here. He sounds like a dick. Keep separate residences for now, or at least have a back-up plan for when things go south. Whatever you do, do not agree to pay 1/2 of his mortgage. When my wife and I agreed to move in together, we had the opposite argument. She wanted to look at super-cheap apartments because she was making 1/2 what I was. I thought they all sucked and wanted to pay a higher percentage so we could live somewhere "decent".
Things worked out just fine in the end, and I eventually relented and we split everything 50/50, even though this meant she had to work extra hours.
-
Sorry, but I have to agree with the later posters who think you're being unreasonable. I don't think your guy is being a jerk at all. You're both doing the same thing -- watching out for number one, and there's nothing wrong with that. But you can't call him a jerk without calling yourself one too.
Regarding the apt: I would do 50/50. Shouldn't matter who earns more -- each gets the same benefit to the the apartment.
The house is slightly more complicated, but I would find what fair rent in that area would be, and pay that. $600 isn't going to get you anything but a shared room in some of the LA neighborhoods I'm aware of (granted, they're on the West side and tend to be expensive, but I can't image North Hollywood is that much cheaper). I can understand your bf feeling like you're taking advantage of him when you lowball him like that.
DH and I moved in together before marrying. There was no question -- both of us just assumed we'd pay 50/50, and we did. Even now we have mostly separate finances. I send him money for mortgage, pays some types of expenses. He pays other expenses. We never count to make sure we're even, but every now and then check that neither is spending way over the other. BUT, we don't really care that much as we both know it's all OUR money. We both often joke "It's all my money anyway" and realize how lucky we are that we can do that (some people are way too uptight about money and would get offended by such a comment).
Given these disagreements, have you two discussed marriage at all? If yes, I think a discussion of what each of you would expect to do with finances after marriage would be a good idea.
-
I think a big issue is that your boyfriend wants a house that is so far outside of what you were paying before and with seemingly no input from you about things like location. I bought a house and my boyfriend pays rent, but it's hardly higher than what he paid before (500 with utils ->675 with no utils). We shopped for it together, we both agreed on the house and the price range.
If you don't get to have full equal input on the house and the price range then I do think its unfair to expect you to pay anywhere near half or significantly over what you are paying now, simply because it would be such a disproportionate burden. That said, if your boyfriend can't see it that way you shouldn't be living together.
I would just tell him your budget, and if he buys a house worth way more than that, then he can pay the difference, if he picks an apartment that is way more then he can pay the difference. The important part is you should be fully willing to get a place where that amount is an equal share. This is what we did when I was looking at houses - boyfriend was willing to pay X, and which was equal to half of a reasonably priced house. Above that it was my own burden.
Also it doesn't sound very rational to me to jump to a place that is going to be that much more expensive than the apartment when it sounds like your life situations aren't all that stable.
-
Whenever people get really freaked out about supporting their partner financially, I have to question the long-term prospects of the relationship. The only reason to be so adamant about “my money/their money” is because you are actively protecting your assets against a breakup or something going wrong. To me, this type of argument indicates a serious lack of trust/faith in eachother and the relationship.
That's a bit of a false dichotomy. You can believe in the relationship (emotionally) but still know, logically/cognitively, that people do break up even after 4 years, 6 years, etc so it's smart to guard against that outcome somewhat by maintaining some separation of finances. You can believe you won't be in a car crash but still wear a seatbelt and buy insurance.
Btw, I think it's easier to split things 50/50 (or any distribution) than approximate it by alternating. We have a shared checking account that we contribute equal amounts to and use for rent, bills, and a CC of mine he is an authorized user on that we use for joint expenses. I find that alternating took at least some tracking of what was happening. Our sustem feels like a stepping stone to joint finances, while keeping each of us somewhat insulated. But I'm not bashing other choices or preferences. Just sharing. :)
-
Suze Orman says you split the bills by percentages. Each person pays the same percentage of their income towards rent, etc. This way the smaller earner is not drowning while the big earner has tons of $. I agree with Kris and would keep my own place at this time. When I met my current hubby we were both middle aged and he was living with his Mom due to an expensive divorce and job loss. I owned my condo based on what I could afford . I invited him to move in and paid for everything. 2 years later he was in a spot where he could buy the groceries, etc. As he ended up earning about double what I did he contributed more and more until he was paying more because he made so much more $. If you are generous and in a relationship because of love it doesn't matter. We ended up getting married and sharing all our $. If I had not been generous in the beginning none of this would have happened. I was more interested in him then his $.
-
What is your current living situation? What do you have and how much do you pay?
To the members saying she "shouldn't pay more than $600 if that's what she feels comfortable with." She lives in LA. You won't find a place with utilities for $600. Honestly, you probably can't even find your own place with utilities for $1000. So getting to live in a HOUSE with a yard and all that, for $900 all in, is a pretty solid deal.
-
I think it's good these issues are coming up now, before you are engaged or married. Also work out your feelings on having kids as well. I believe those are the two biggest deal breakers, relationship-wise.
Also, trust your instincts. If you have doubts about this guy think about cutting your losses now. Or at the very least, keep your own place, near your work for a while. (Plus, long commutes really suck.)
I don't like that he said, "he'd be happy with whatever I contributed" and then was not. Hmmm. That's not giving me warm fuzzies. It kind of sounds like either way one of you would be resentful of the other (if he buys the house & you move in.)
It's one thing if you are married and helping pay down the mortgage, because at that point you own half the house. CA is a community property state, so if you do get married you own half the property, although I'm not sure how prenups work in these situations, if they are valid. And if he wants a prenup regarding house ownership I'd really run at that point.
Good luck! This sounds like a stressful situation.
-
I could go on, but like I said, the problem isn't of what is fair, it's of your relationship. In my opinion, truly happy couples aren't "keeping tabs" or even really care who pays what, they just look at the big picture and the long term.
Yeah that's kinda what I figured -- it's not an objectively unfair rent for Los Angeles, but I don't want to be his roommate, I want to be his life partner, and with someone who isn't trying to get close-to-fair market rent out of me.
This is what it comes down to for me - you are in different places in how you view the relationship.
I think the people who are saying that percentage-based is always right, or 50/50 is always right, are wrong. Both are equally valid ways of splitting expenses between romantic partners. But each fundamentally reflects different views about the relationship and it's longevity.
With my husband, whom I'm committed to, finances are strictly based on what each of us can comfortably contribute. He made 100% of the money for about 5 years while I finished undergrad and went to law school. Then we both worked for a couple of years. Now he's back in school, and I'm paying 100% of the expenses [as a note, we are living long distance from each other for this year, because my job took me to LA and he needs to finish school in our hometown. That means this year my salary is paying for an apartment in LA as well as our mortgage back in Utah. This is very expensive, but not a big deal, relationship-wise]. Once he's out of school, he will move to LA and have a job, but I'll probably make about 2-3x his salary. We think of our money as one pot, and decide what we can afford based on the overall picture. Mathematically, this means that if we were thinking of our salaries as separate, we would each be paying expenses proportionally, and one of us would be subsidizing the other. There is no alternative opportunity of a random roommate who would pay market rate. We are fine (happy!) with that.
If tomorrow I was not married and instead dating somebody who I liked and was up for moving in with, but I wasn't sure it was the end-all be-all relationship (and, importantly, would also be ok living with a different roommate), then I would absolutely want to split it 50/50. I would be comparing it against the (actually possible) opportunity cost of having a roommate, and I would not be invested enough to be comfortable with subsidizing his life.
So, it sounds like you are indeed at the stage of thinking of yourselves as life partners, and he is still thinking of you as a girlfriend who could double as his roommate, at least for now. THAT, I think, is your relationship problem. Not whose math is objectively correct.
-
I would not pay anymore than what you would pay towards rent at a place you like to live.
But a few things to consider:
1) I wouldn't present the "unfairness" of him gaining payment towards his mortgage principal; because your current landlord gets that too.
2) Don't cut off your nose to spite your face: if you are going to end up spending every night at that house anyway, it probably isn't worth it to live, and pay utilities elsewhere- if you won't be living there.
I really can't help other than that. I never lived with a romantic partner before I was married; and once I was all money was "our" money, so the whole percentage vs 50/50 thing isn't something I can do. But very often fair does NOT mean equal, so I lean towards a 50/50 split when HE is picking, and owning the house, would not be the fair thing to do. 50/50 is the way I would go if you were looking for a place together, mutually agreed on it, and renting. The percentage thing doesn't usually make sense to me.
And if you do move in, make sure you insist on a lease to offer you protection for your housing if something happens. I mean, if you break up, you probably don't WANT to still live with him, but if you have a lease he can't just kick you out with no notice.
-
You said it was "his future house" you never said it was "our future house". You can plan on being his life partner but it doesn't sound like he is planning to be yours.
My other question is why is he talking about buying a house right now? He knows it will put a financial strain on you, it will make your commute longer and more expensive, so I question why now? Why not wait a year or two? Why can't you both live together in a place where the commutes won't kill you?
-
My first thought: Run far away.
Ok, maybe that is unfair. But you shouldn't be paying more than you would be spending on housing anyway. How much are utilities? 300 for utilities (900-600) seems like A LOT. Maybe things are that much more expensive in LA, and that is coloring my view.
I guess ultimately, unless you are thrilled to move in together for the 900, I wouldn't. If you have any reservations, now is the time to listen to them. The extra commute alone is probably worth at least a hundred or so bucks a month.
This is kind of my thought too.
First of all, I really wouldn't take the relationship into account right off the bat. In the apartment scenario, I think you should pay half. You aren't married. So, if you were to pay half, would you want to? When I had roommates, I had a roommate who wanted a nicer place than me. We eventually parted ways because I was able to get a place by myself for less, that was convenient to my work, not hers. No, we weren't in a relationship, but that muddies the waters.
For the house situation, look at it this way: how much is the house? How many bedrooms? And, most importantly - what is the going rate for a bedroom rental? It is common here in Santa Barbara for many young professionals to rent a 3 or 4 BR house, and the "rate" for an individual room is in the range of $1000. What is the rate in that area of LA?
So if it's a 3BR house, and the rental rate is $1000 per bedroom, then I'd say you pay $1000, but only if you are getting your own room. If the two of you are effectively sharing a bedroom, leaving the other two "open" for more renters, then I'd split it.
Essentially, you need a place to live, and he's looking out for help with mortgage But it needs to be at least somewhat "win-win". You don't want to end up paying more and commuting more. He probably wants mortgage help - but you know, he can always rent out other bedrooms. I'm assuming you are a better roommate though - so he needs to factor that in. It's not quite the same as renting out the spare bedroom to a random dude.
With random dudes, you can have a mortgage of $3k and rent out the bedrooms for more than that if it's market rent.
-
If you can't come to an agreement TOGETHER about this issue, an agreement that you both feel is completely fair, don't move in together!!! Let him buy his house, and you stay in your apartment near your work. Once you move in together, especially in a house he OWNS, there are going to be hundreds of other issues to negotiate, and if you can't even get past this one, you don't want to get into the others.
-
That's a bit of a false dichotomy. You can believe in the relationship (emotionally) but still know, logically/cognitively, that people do break up even after 4 years, 6 years, etc so it's smart to guard against that outcome somewhat by maintaining some separation of finances. You can believe you won't be in a car crash but still wear a seatbelt and buy insurance.
[/quote]
Some separation is smart. But this seems like almost complete separation, more like a roommate agreement than a couple figuring out their mutual finances together. Plenty of married couples have their own individual retirement accounts, savings, etc, but this couple seems to be particularly aggressive in safeguarding their individual assets from each other to the point where it is a major point of contention. The op doesn’t want to support him by paying more for living expenses, and he doesn’t want to support the op by covering more costs. The issue isn’t about separate financial structures, it’s more like they are playing a game of chess and looking to best the other for their individual financial gain.
-
I just wanted to add a few things:
I strongly disagree with many of the prescriptive and categorical responses you're getting (e.g. "if you aren't ready to combine finances, you shouldn't move in" or "you must pay half or it's not fair."). You and he need to work something out that feels right to each of you. That doesn't mean pleasing him at your own expense. It means thinking through what each of you really want and either arriving at a compromise or calling it off.
My partner and I split household expenses according to income and that works well for us. If you are going to split expenses, I feel that the share of the mortgage that goes to the principal (e.g. not interest, taxes, etc) should be excluded from the calculation. Your BF should pay that because it's savings for him. You should also discuss how you'll handle maintenance. In my relationship I am the house owner and I take care of all house-related expenses.
I would also strongly encourage you both to think about the legal implications of cohabitation in a house owned by one partner. In my state, the non-owner partner gains a significant legal interest in the house over the years if any sort of payment is made and especially if they do work on/around the house. We didn't appreciate this when we started out. It's not as simple as a renter/landlord relationship.
-
Essentially, you need a place to live, and he's looking out for help with mortgage But it needs to be at least somewhat "win-win". You don't want to end up paying more and commuting more. He probably wants mortgage help - but you know, he can always rent out other bedrooms. I'm assuming you are a better roommate though - so he needs to factor that in. It's not quite the same as renting out the spare bedroom to a random dude.
This. Win-Win is a must. If he's buying the house regardless, then he's winning on any amount of rent. Important that the OP get some gain here too.
When my now-wife moved in, we discussed and came up with a number that saved her quite a bit compared to the place she had been renting, and presumably would have stayed at. I was financially ahead with anything, and this figure was less than half of Mortgage + Condo fee + Utilities + Cable/Internet. Doesn't matter now - married so everything is ours anyway, but seemed fair at the time.
Also was good to be able to respond when now Mother-In-Law said "He just wants you to buy him a house." Wife could just say "saving money compared to the other place anyway".
-
I don't have an opinion on the house thing, but I think you should pay half the rent of the apartment.
-
The fact that you are fighting this much about money before you get married isn't a good sign.
Neither one of you are right or wrong. You can tell that by the many differing opinions on this forum. The only thing that matters is what you and your SO think is fair, and it appears you don't agree in that area. So throw out everyone else's opinion and determine what you are comfortable with, because it doesn't sound like you are comfortable with the terms he is offering. If I were you I would keep separate residences because if you give in and pay more than you are comfortable you WILL resent him eventually. And if you convince him to let you pay less he WILL resent you. In fact it sounds like you already resent each other and you haven't even moved in yet.
-
I had the exact same situation happen to me. He was looking for a house weather or not I was going to live with him. I made a little less than half of what he made at the time. We decided on 1/3 of the mortgage plus half of the utilities. Over time, this migrated to me paying none of the mortgage and all of the utilities, as he travels for work a lot and kept missing payments. So I set up online payments for the utilities and took over that responsibility. It works out to be about the same amount of money, but varies. I felt that this was more equitable, as I am home more often and he is gaining equity on the house. Also, I could drastically reduce the utility bills when he was out of town. All house repairs fell under his budget as well. Now that we are getting married we are working on joining our finances. Our incomes are no longer so different. We are contributing to two joint accounts right now; one high-interest checking account for the household, and one high-interest savings account for the wedding. We contribute 50/50 to the wedding account. We contribute 60/40 to the household checking account, which pays for all joint expenses down to the bar tab when we go out. When we get married, we will keep the wedding account as a travel and vacation account. We have separate personal checking, savings accounts, and credit cards. It eliminates any money fighting, as any contested item quickly becomes a "personal" expense or is not bought at all. After all, if you wouldn't pay full price for something then you don't really need it, do you?
-
The house is his house. If you break up, he keeps the house and any equity. Paying half is crazy. Of course, it could also get messy if splitsville and you claim to be common-law partners and want your half of the community property (even though you're not on the deed).
There's another problem: rent is taxable income. It has to be reported (schedule E) and part of the house depreciated. This reduces the house exclusion gain at selling. (Tip for breaking up couples: Whistleblowers get rewards.)
Interestingly, the above 2 scenarios are an either-or. Either you're married, in which case there's no "rent" but there is community property, or rent is reported because the owner is a landlord.
The safest thing, for both parties, is for the non-owner to pay for utilities (and groceries?) only.
https://www.reddit.com/r/personalfinance/comments/2lhl02/do_i_need_to_claim_my_girlfriends_portion_of_rent/
Naturally, there are millions of couples who do this and the income isn't reported.
-
There's another problem: rent is taxable income. It has to be reported (schedule E) and part of the house depreciated. This reduces the house exclusion gain at selling. (Tip for breaking up couples: Whistleblowers get rewards.)
Interestingly, the above 2 scenarios are an either-or. Either you're married, in which case there's no "rent" but there is community property, or rent is reported because the owner is a landlord.
The safest thing, for both parties, is for the non-owner to pay for utilities (and groceries?) only.
Actually not always true. Many years ago I owned a home and my boyfriend paid me what I considered rent each month. I called the IRS and asked how to report this. After a discussion, they said I could *not* consider it rent because there was not a well defined portion/room in the house that I was renting out. Since it was under $12,000/year, I decided if I was ever questioned, I would claim it was a gift, and under the reportable amount to trigger a gift tax for him.
-
As someone who just bought a house with my GF (not married or engaged yet), I was going through this thread and quoting every post I agreed with. Turns out Common Cents did it for me. Go back and read his post. It's the best post in this thread.
Aside from everything he wrote, the biggest red flag I see BY A BILLION MILES is your lack of togetherness. Your original post is about MY money and percentage of MY income and and him saying I want THIS house because I can afford it. Dating for four years, it's hard for me to imagine such individuality on such big issues that should be decided together.
When you are in a long term relationship, you and your SO are a TEAM. Everything you do should be done with a common goal in mind. Children. Religion. Finances. Everything.
My relationship isn't perfect--far from it--but my GF and I are a TEAM. I make $47,500 and my GF makes $67,500. We split everything 50/50. EVERYTHING.
When my GF and I bought furniture when I moved into her apartment, we split everything 50/50 (didn't matter if it was a dresser solely for her...it was our TEAM purchase). When we were saving for a house, each of us sent $400/month to an Ally account (even though that was a higher percentage of my income). When we purchased furniture for our new house, we split it entirely even though it was the one she picked out and loved and I was "meh" about it.
And this upcoming year, our goal is to put $30,000 in retirement accounts. Even though I make less, I am going to be contributing $20,000 and she is going to be contributing $10,000 (she is paying a big car payment and finishing off paying her student loans). But I don't look at it as me saving $20k and her saving $10k--as a team we are saving $30,000 in a single year, and I'm ecstatic about that.
So I'm not criticizing you in particular. I'm just saying that both of you need to take a step back and determine whether you want to be with each other for the long haul. Do you want to have children together? Do you want him to be the father of your children? Do you want him to be the one you lean on when you're down?
Because if the answers to those questions are yes, then stop worrying about the nickels and dimes. It will go from "I make $60k and he makes $130k" to "WE make $190k." And then you'll see that this Suzi Ormann stuff you're EXPECTING is small peanuts.
EDIT: just wanted to add that the post below sums up my entire post but in a much more concise way:
So, it sounds like you are indeed at the stage of thinking of yourselves as life partners, and he is still thinking of you as a girlfriend who could double as his roommate, at least for now. THAT, I think, is your relationship problem. Not whose math is objectively correct.
-
The house is his house. If you break up, he keeps the house and any equity. Paying half is crazy. Of course, it could also get messy if splitsville and you claim to be common-law partners and want your half of the community property (even though you're not on the deed).
There's another problem: rent is taxable income. It has to be reported (schedule E) and part of the house depreciated. This reduces the house exclusion gain at selling. (Tip for breaking up couples: Whistleblowers get rewards.)
Interestingly, the above 2 scenarios are an either-or. Either you're married, in which case there's no "rent" but there is community property, or rent is reported because the owner is a landlord.
The safest thing, for both parties, is for the non-owner to pay for utilities (and groceries?) only.
https://www.reddit.com/r/personalfinance/comments/2lhl02/do_i_need_to_claim_my_girlfriends_portion_of_rent/
Naturally, there are millions of couples who do this and the income isn't reported.
This is a really good point, and another reason to split along utilities/house lines. Even if you live in a common-law state, it's best not to do anything that could get the IRS involved. If you break up/divorce, you would have a claim against that equity. It's hard to prove, but people sue for less especially if it's a bad split. Tell him you are watching out for his legal interests.
A lot of people are arguing this as from a marriage mentality, but you aren't even engaged. You're still dating. Rushing into things is not going to make your relationship better. Trust is not something you can force. It's perfectly ok to move in with someone and not know they're the one. You're still figuring it out, and that's ok. Only fools rush in.
-
Actually not always true. Many years ago I owned a home and my boyfriend paid me what I considered rent each month. I called the IRS and asked how to report this. After a discussion, they said I could *not* consider it rent because there was not a well defined portion/room in the house that I was renting out. Since it was under $12,000/year, I decided if I was ever questioned, I would claim it was a gift, and under the reportable amount to trigger a gift tax for him.
What the IRS phone reps tell you and what the IRS court decides are two different things. Any money given to you is either income or a gift. It'd be hard to explain away a regular, monthly, gift that neatly matches 1/2 the mortgage (or whatever), especially when the gifter received services (somewhere to live).
https://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Frequently-Asked-Questions-on-Gift-Taxes#2
https://www.irs.gov/taxtopics/tc415.html
In any case, it's a moot point. The IRS doesn't have the resources to investigate owners getting rent from their partner. Personally, I'd be more worried about an angry ex claiming ownership equity through community property.
-
Putting the whole question of "How much rent is fair" aside, what I see here is two people who have been dating for four (!) years and still don't trust each other. That's what it boils down to, right? You each don't trust that the other won't take advantage of your kindness or generosity. Having these types of issues four years into the relationship is concerning, and I wouldn't consider living together until you can work that out.
-
I'd slam him more for going back on his "anything you pay is great" but frankly, to me it seems like he expected you'd offer about what you'd pay in renting costs and was unpleasantly surprised to discover you wanted to pay quite a bit less than that. I'd be unhappy too with your offer because it's pretty unreasonable to me. It just seems like you pulled out a number out of a hat to get $600 based on what you wanted save, not what you'd pay elsewhere if you rented OR what renting the house with him might be valued at, either of which might be a fair and reasonable approaches.
The conversation went verbatim like this:
"I just want you to live with me, and anything you can contribute is fine. Even if that's as little as $500."
"Ok, I'm glad to hear that, because I've been considering the numbers and I think that $600 is fair because that's what we had previously agreed I would pay if we moved into an apartment. I don't care whether we live in a house or an apartment."
So he actually brought up and even lower number than me first! Then 3 weeks later, he confessed he changed his mind about his "anything I can contribute." I appreciate that he is free to change his mind, and I told him that-- Of course I felt like he was setting me up and giving me some kind of litmus test and I failed it.
That being said, I can see and respect everyone's thoughts that it is probably too low given our relationship at this point.
In any case, it's a moot point. The IRS doesn't have the resources to investigate owners getting rent from their partner. Personally, I'd be more worried about an angry ex claiming ownership equity through community property.
I do not see a court thinking I would be entitled to any legal claim to the house, regardless of whether he pays taxes on money I give him.
The gift tax, however, is something I had not thought about, and probably a good reason to keep my contributions to under $1K/mo?
And thanks to everyone who has wrote their opinions/experiences. All of your advice is much appreciated. Given me a lot to think about.
-
Actually not always true. Many years ago I owned a home and my boyfriend paid me what I considered rent each month. I called the IRS and asked how to report this. After a discussion, they said I could *not* consider it rent because there was not a well defined portion/room in the house that I was renting out. Since it was under $12,000/year, I decided if I was ever questioned, I would claim it was a gift, and under the reportable amount to trigger a gift tax for him.
What the IRS phone reps tell you and what the IRS court decides are two different things. Any money given to you is either income or a gift. It'd be hard to explain away a regular, monthly, gift that neatly matches 1/2 the mortgage (or whatever), especially when the gifter received services (somewhere to live).
https://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Frequently-Asked-Questions-on-Gift-Taxes#2
https://www.irs.gov/taxtopics/tc415.html
In any case, it's a moot point. The IRS doesn't have the resources to investigate owners getting rent from their partner. Personally, I'd be more worried about an angry ex claiming ownership equity through community property.
Yeah. I wasn't *too* worried about it, figured I had a pretty good claim that I tried my best to report as appropriate by calling and asking what to do. And a reasonable claim it was a gift towards general household expenses (food, utilities, whatever) - wasn't anywhere near half the mortgage and I certainly wasn't going to kick him out if he didn't pay. And if they still forced me to consider it rent, they would still need to answer my original question about how to report it and let me take the depreciation on the house. Moot now, it was a LONG time ago.
-
Honestly, I am in a similar situation. Although the salary difference isn't as big. I live in my BF's condo with him; how we work, is that we added up all living expenses EXCEPT mortgage principal and taxes (so mortgage interest, condo fees, heat, electricity, water, internet). We then split those pro-rata according to our salary. I drop my share into our shared bank account (he contributes nothing since he ends up covering the aforementionned fees from his accounts), and this is the money we use to pay food and shared fun. However, we have had many discussions considering the fact that after his PhD his salary will go up a lot, and mine won't, which means that our pro-rata rate of 60% to 40% technically SHOULD shift, but he doesn't feel comfortable eventually covering 70%+ of our shared expenses. I'm okay with this only because I have a substantial monetary gift coming my way in 2017 that I won't be sharing with him.
All this being said, I will judge neither you nor your boyfriend. It may come out as corny, but do what feels right. If it pisses you off every month to pay 900$, don't do it and stay put. If you would rather live with him, instead of keeping the extra 300$, then move in and move on with the topic. Money is a weird subject with couples. Most people think my BF and I have a weird arrangement too, but frankly, no one is at home with you two other than the two of you. So who cares? Protect yourself, protect whatever and whomever you love, and for the rest, f*** it.
-
I think a big issue is that your boyfriend wants a house that is so far outside of what you were paying before and with seemingly no input from you about things like location. I bought a house and my boyfriend pays rent, but it's hardly higher than what he paid before (500 with utils ->675 with no utils). We shopped for it together, we both agreed on the house and the price range.
If you don't get to have full equal input on the house and the price range then I do think its unfair to expect you to pay anywhere near half or significantly over what you are paying now, simply because it would be such a disproportionate burden. That said, if your boyfriend can't see it that way you shouldn't be living together.
I would just tell him your budget, and if he buys a house worth way more than that, then he can pay the difference, if he picks an apartment that is way more then he can pay the difference. The important part is you should be fully willing to get a place where that amount is an equal share. This is what we did when I was looking at houses - boyfriend was willing to pay X, and which was equal to half of a reasonably priced house. Above that it was my own burden.
Also it doesn't sound very rational to me to jump to a place that is going to be that much more expensive than the apartment when it sounds like your life situations aren't all that stable.
+1. This is great advice. The only reason he wants to get a house now and have a larger housing expense is because HE got a raise. He needs to consider that your budget has stayed the same.
-
It sounds like the two of you are girlfriend and boyfriend, rather than life partners (so far). Perhaps its not yet time for you to move in together.
People don't like to talk about it, but money is important in relationships. Have you ever sat down to discuss whether you should have separate finances or if he should provide some subsidy because of your income is lower? It sounds like you're accidentally having that discussion in the context of rent rather than making a conscious choice to make that decision.
You should have that discussion on purpose rather than by accident. If you can't agree and separate vs shared finances are a deal-breaker, you may need to part ways. You might also decide that you're not yet ready for shared finances, in which case it might not make sense to move in together.
-
I disagree that the only way to fairly split costs is 50/50. There is more to fair than 50/50, would anyone say we should split all our food 50/50 because that would be fair - dispite the fact that SO loves bananas and I hate them, or that SO is a foot taller than me and needs to eat more. Where does it end? Do I need to split my birth control pills 50/50 with him too?
I agree with you that there are other fair ways than 50/50 (and depending on the situation, they might be more fair). But birth control pills seem to be a weird example. Unless you were taking them without his knowledge, yes, he should be paying 50%. He is getting exactly the same use out of them as you: Not having a child at an inopportune time.
I suppose you could split the cost of birth control pills in any manner and still have it be fair -- they are FREE.
-
This. Win-Win is a must. If he's buying the house regardless, then he's winning on any amount of rent. Important that the OP get some gain here too.
When my now-wife moved in, we discussed and came up with a number that saved her quite a bit compared to the place she had been renting, and presumably would have stayed at. I was financially ahead with anything, and this figure was less than half of Mortgage + Condo fee + Utilities + Cable/Internet. Doesn't matter now - married so everything is ours anyway, but seemed fair at the time.
Also was good to be able to respond when now Mother-In-Law said "He just wants you to buy him a house." Wife could just say "saving money compared to the other place anyway".
He's not "winning" and she's not "buying him a house"....she's paying rent, which she would have to pay no matter where she lives, with or without him. If it wasn't rent, then it would be a mortgage, property taxes, insurance, and maintenance.
She could always buy a house and charge him only $600 while she covers all the other costs.
-
There's another problem: rent is taxable income. It has to be reported (schedule E) and part of the house depreciated. This reduces the house exclusion gain at selling. (Tip for breaking up couples: Whistleblowers get rewards.)
And then you should send pictures of them performing sex acts to their family and friends and post them on the Internet!!
You know... While we're on the topic of things bitter pieces of shit do after breakups.
Amazing that idea would even cross someones mind.
-
There's another problem: rent is taxable income. It has to be reported (schedule E) and part of the house depreciated. This reduces the house exclusion gain at selling. (Tip for breaking up couples: Whistleblowers get rewards.)
And then you should send pictures of them performing sex acts to their family and friends and post them on the Internet!!
You know... While we're on the topic of things bitter pieces of shit do after breakups.
Amazing that idea would even cross someones mind.
+1 :/
-
Actually not always true. Many years ago I owned a home and my boyfriend paid me what I considered rent each month. I called the IRS and asked how to report this. After a discussion, they said I could *not* consider it rent because there was not a well defined portion/room in the house that I was renting out. Since it was under $12,000/year, I decided if I was ever questioned, I would claim it was a gift, and under the reportable amount to trigger a gift tax for him.
Phone calls with the IRS are not legal authority. "[T]he authoritative sources of Federal tax law are in the statutes, regulations, and judicial decisions", not in oral statements made by IRS representatives during a phone call. Zimmerman v. Commissioner, 71 TC 367 (https://scholar.google.com/scholar_case?case=5377626060328661888), 371 (1978), aff'd without opinion 614 F 2d 1294 (2nd Cir 1979). According to regulations promulgated by the Commissioner of Internal Revenue under 5 USC § 301 (https://www.law.cornell.edu/uscode/text/5/301), "[a] taxpayer may, of course, seek oral technical assistance from [the IRS]" but "[s]uch oral advice is advisory only and the [IRS] is not bound to recognize it". 26 CFR 601.201(k)(2) (https://www.law.cornell.edu/cfr/text/26/601.201#k_2). The bottom line is that you can't rely on IRS customer service agents to do your taxes for you.
That said, and with the caveat that we do not have all the facts so I cannot and will not comment on your specific situation, it appears that the IRS agent may have managed to state an accurate proposition of law here, although you may have misunderstood the significance (or lack thereof) of that accurately stated proposition of law.
The question of whether a receipt of money represents "rent" is really a question of property law, which is governed by state law. See Burnet v. Harmel, 287 US 103 (https://scholar.google.com/scholar_case?case=14927444189984824348), 110 (1932) ("The state law creates legal interests but the federal statute determines when and how they shall be taxed."). See also two posts I wrote on December 11, 2015 (http://forum.mrmoneymustache.com/taxes/selling-lake-property-and-boat/msg899715/#msg899715) and December 17, 2015 (http://forum.mrmoneymustache.com/taxes/would-you-pay-thousands-a-year-to-be-married/msg906744/#msg906744), where I also relied on this proposition.
The rules very by state, but generally speaking (and with various exceptions), the core essence of a tenancy is that the tenant is "grant[ed] exclusive possession of designated space ..., subject to rights specifically reserved by the lessor". Am Jewish Theatre v. Roundabout Theatre Co, 203 AD2d 155 (https://scholar.google.com/scholar_case?case=12465799725736850893), 156 (NY App Div 1994) (emphasis added). An arrangement whereby a person pays money in exchange for the right to share in use and occupancy of the premises is not a tenancy, but rather a licence (and the occupant is a "licensee"). Id. The money paid is not "rent" but rather "licence fees" (*) for the licence to use the property.
However, the more salient question is: Does the fact that the money is licence fees rather than rent change whether it is included in the taxpayer's income? And the answer to that question is generally "no". Gross income is defined to include "rents" (26 USC § 61(a)(5) (https://www.law.cornell.edu/uscode/text/26/61#a_5)), but it also defined to include "all income from whatever source derived", which surely includes licence fees. Regardless of whether the money is rent or licence fees, it is still included in gross income, and it is still subject to federal income tax, unless specifically excluded from income by another provision.
As you correctly note, one such exclusion is that gross income generally does not include gifts. 26 USC § 102 (https://www.law.cornell.edu/uscode/text/26/102)(a). However, if money is a gift, it is by definition neither rent nor licence fees, because a necessary condition for a payment to be a gift within the meaning of the statute is that the payment of the alleged gift "proceeds from a detached and disinterested generosity ... out of affection, respect, admiration, charity or like impulses". Brown v. Commissioner, 47 TC 399 (https://scholar.google.com/scholar_case?case=974870150099283696), 408 (1967) (citations and internal quotation marks omitted), aff'd without opinion 398 F 2d 832 (6th Cir 1968), cert denied 393 US 1065 (1969). In other words, if the payment was either rent or licence fees, it could not have been a gift; and, by way of contrapositive, if the payment was indeed a gift, it was not necessary to analyse whether it was rent or licence fees because it could not have been either.
In conclusion, although the IRS agent probably stated an accurate proposition of law, that proposition was wholly irrelevant to the correctness of your position that the item was a gift. (Note that I express no view on whether your position is in fact correct.)
((*) An earlier version of this post used the term "royalties" (http://forum.mrmoneymustache.com/ask-a-mustachian/moving-into-boyfriend's-house-fair-rent/msg908606/#msg908606) rather than "licence fees", but after further review, I determined that "licence fees" is the predominant term in this context, so I decided to use it instead.)
-
Cathy - not going to quote that whole thing to save space, but thanks for the interesting information, never heard of that concept of royalties before. What's done is done, and I do always try to be accurate and correct on my taxes, thus the phone call to the IRS, which I'm aware (and was also aware at that time) is not legally binding to them, but without paying a bunch of money to a tax preparer, and without spending several months researching tax law, was the best option I had at the time. This was a long time ago and the "web" was not much of a thing back then.
-
There's another problem: rent is taxable income. It has to be reported (schedule E) and part of the house depreciated. This reduces the house exclusion gain at selling. (Tip for breaking up couples: Whistleblowers get rewards.)
And then you should send pictures of them performing sex acts to their family and friends and post them on the Internet!!
You know... While we're on the topic of things bitter pieces of shit do after breakups.
Amazing that idea would even cross someones mind.
I once had a tax professional tell me the top sources of tip offs for tax cheats: bitter exes and jealous neighbours. I don't think too much surprised him, anymore.
-
I don't want to rent from my life partner.
I want to be on the mortgage, so we have a joint interest in our home. If we can't afford for me to be a 50/50 partner, then the choice of a place to buy needs to change so we can. And if that's just impossible, then I wouldn't buy into it.
I wouldn't care if it's fair market value or not. From the way he's managing this disagreement, I see some huge red flags flapping....sadly, red flags that i've ignored in my life.
You may both be much happier just staying where you are and continuing to see where the relationship goes. But really it's whatever you're comfortable with.
-
I would not do it. He should want to help you. He is the only one gaining anything.
I disagree. I am sure if he advertised on craigslist $900 with all utilities paid, his phone would be ringing off the hook.
-
Cathy - not going to quote that whole thing to save space, but thanks for the interesting information, never heard of that concept of royalties before.
I should clarify that my use of the term "royalties" for payments made in exchange for a licence to use real property is not really a common use of the term. Most judicial opinions either carefully avoid using any term for this concept or they use lengthier terms like "payment for use and occupancy". The term "royalty" in its most broad sense "commonly refers to a payment made to the owner of property for permitting another to use the property", but it is rarely used when the property is real property. Sierra Club v. Commissioner, 86 F 3d 1526, 1531 (9th Cir 1996). I probably should have picked a more common term, but I make this follow-up post to clarify that you may see other terms instead.
-
I don't know if you found this, but this might be helpful as I went though the same thing with my partner I don't even expect to be "life partners" that I've been with for 1.5 years. Here's the thread. (http://forum.mrmoneymustache.com/ask-a-mustachian/would-you-move-into-an-apartment-outside-your-means-for-a-partner/)
I had a LOT of guilt about moving into a fancier apartment with him because my rent would be going up $200/month to SHARE a room instead of having a room of my own. His would be going down $500/month. He earns 3.5x what I do (and owns 2 other houses he rents). In the end, we ended up deciding on me paying $550/month and him paying $900. I felt awful guilt about it, but the way i looked at it was 1) he was going to move to this place anyway so anything I contributed would save him money 2) he initially said, and I quote "I kept trying to think of a reason why this didn't make sense, and I didn't like it at first, but then I couldn't think of a good reason why I should avoid it" 3) he agreed it would be stupid for me to pay MORE to have less space ($550 for my own bedroom in a 2-bedroom to $725 to share a 1-bedroom- in your case a longer commute) but no matter what we did he'd be saving money.
We agreed on terms regarding a breakup (he would take over the lease because the apartment alone would be 50% of my gross pay, and only 8% of his.)
So we came to a proportional compromise. If he wouldn't have done so, I wouldn't have moved in.
-
I would not do it. He should want to help you. He is the only one gaining anything.
I disagree. I am sure if he advertised on craigslist $900 with all utilities paid, his phone would be ringing off the hook.
What he could get for it on craigslist is beside the point. Only if she was already planning to pay at least that much for housing could she be seen as trying to take advantage of the situation. He purchased the house of his own volition for an amount that he (supposedly) could afford. This wasn't a joint decision taking her budget into account. He wants her to move into his bedroom (not a craigslist room for rent) for the pleasure of her company and to subsidize his mortgage payment apparently. She gains nothing except the pain of stretching her income for a while, while risking the demise of the relationship and no where to live when that occurs.
Regardless of who is "right," this is an awful way to start a life together, if that is what you are trying to do. Get a place that you can afford and see how things go for a while.
-
I will just add one point which hasn't been explicitly mentioned:
Would some people be saying something different if the genders were reversed? There was a thread I participated in a while back which had a very similar situation except it was the woman who was making more. A lot of the advice sounded like "If he doesn't pay 50/50 dump him!" "He's a slacker/moocher!" "Don't let yourself be taken advantage of girl!" etc.
http://forum.mrmoneymustache.com/ask-a-mustachian/how-much-to-'charge'-live-in-boyfriend/
Just something to consider. Our expectations of gender roles and money can play a big part in our relationships.
So it sounds like your boyfriend is OK with you paying 900$. Clearly he isn't married to his original idea that you should pay exactly 50%. So it comes down to whether you're OK with it:
-Would you pay less if you lived by yourself? Do you pay less now?
-Is living together important enough to you to endure the longer commute?
-Are there compensating advantages to the house that you would enjoy? Having a backyard, gardening, hosting barbecues etc.?
-Is his attitude towards money a long term deal breaker for you?
Super wise, level-headed advice and questions from rweba.
-
I think it's somewhere in between, and you are both mixing personal feelings about one another with a decision to move in together.
If you were just two friends (non romantic) or strangers trying to share an apartment or house, you would split rent 50/50 in most cases. Since the house is more than you would get otherwise (your alternative is a $2,000-2,500 apartment in LA), that seems like the right proxy as what is "fair". $1,000-1,250 plus personal expenses is what you would pay for sharing an apartment with a stranger.
In the case of renting, some outside landlord owns the property and may or may not have a mortgage. If your boyfriend owns the home or if you just rented together, why does that matter? Obviously, if there are savings, you should both be able to share in some of that.
On the "low" end, you would pay proportional to income. Given he makes 2x your income, that means you would pay ~1/3 and he pays ~2/3. The best next alternative to the house would be a shared apartment somewhere, so 1/3 of $2,500, or $833 plus utilities/food/etc on the low end and up to $1,250 plus utilities/food/etc. on the upper end.
Personally, as a male, I wouldn't want to feel like someone was "living off me" if we were not engaged or seriously considering marriage. Until that happens, you basically have separate finances. What if you made 2x his salary, then would you still feel comfortable splitting expenses proportionate to income? You can get into a crazy detailed analysis about the "right" amount, but you need a few basic things solved:
1) no hard feelings from either person, because no one should feel taken-advantage of...
2) your cost should be somewhere in between proportionate by income and 50/50 for your alternative (on a $2k apartment, that's $667 - $1,000 plus shared costs or on a $2.5k apartment, that's $833 - $1,250 plus shared costs)
3) what would it cost for you to rent a bedroom in a house somewhere else? If that's much lower than #2, that's another benchmark to what's acceptable
$900 all inclusive seems very fair to me, no? It's right smack in the middle of being proportional to income and 50/50 for an apartment, and includes everything. You are saving compared to what you would pay otherwise, and he gets reasonable cost sharing, fair enough?
Edit: Just be aware that things may be different if you reverse the situation, and it's wise to put yourself in boyfriend's shoes before rushing to break up or anything. Previous post by PUGLOGIC is a solid link. Seriously consider what you would request if your incomes were reversed, and what would feel "fair" in that situation. Proportional to income makes more sense when you are engaged/married/significantly considering the next step or having shared finances.
-
I don't like this guy. You can do better.
-
I don't think he is ready to co-habitate. HE is approaching this as a financial room mate problem. You are approaching it as a BF/GF who are embarking on many years living together.
To be generous, it could just be that when he thinks about money, it is with a compartmentalized "logical brain" that does not have thoughts of your relationship anywhere near it. This is not a good sign for living together, where you need your partner to look at emotional issues alongside financial ones.
Not so generous though is that he is not ready to commit to you (yet?) and may not realize that he is keeping his options open for someone better right now.
At this time, approach it yourself as a room mate problem. Let's say he was just someone you met, who is looking for a room, and you know them through an introduction by your second cousin... would you even move for $600?
If no, don't flip your life around for someone who is not committing to you.
-
I don't like this guy. You can do better.
Perhaps he can do better. If you've already forgotten (like many people have), she is the one looking to rent for less than fair market value, not him. Who is really being taken advantage of??
-
My thoughts based on the OP:
(1) Unless you two are married or engaged, then I think the fair way to split an apartment with your boyfriend is 50/50. It is pretty selfish of you to expect him to pay more just because he has chosen a more lucrative career path. If he were to offer to pay more, then that would be very generous of him and a good sign of how he feels about your relationship. However, since he has not offered to pay more on an apartment, which I think is perfectly reasonable of him, then you need to pony up your half. If I were him, and not yet committed to marriage, then I absolutely would feel like you are trying to take advantage of me.
(2) Regarding the house, since it sounds like he is approaching it based on his budget and his preferred location, and your name will not be on the deed, this is really a purchase of his house, not yours. I'd have to say that it sounds like he's just not that into you -- he may love you and care a great deal about you, but these actions imply to me that he is not yet committed to marriage or long-term cohabitation with you. I think you should pay a price approaching fair market value of him renting a room to you. $900 including utilities sounds like a great bargain to me -- your $600 suggestion would be insulting to me if I were him. Also, I think it's dumb that you are looking at the value of his mortgage after the tax deduction -- you are really skimping on him. If you're going to take into account the tax deduction, then you better add in all his maintenance, utilities, and home improvement costs on the other side. It sounds to me like you want to get most of the benefits from his home purchase, and leave him the least of the benefits. Even $900 per month is SURELY LESS THAN 1/3 of his monthly costs for this home.
In sum, it really sounds like the two of you are in different places in how you feel about this relationship. If you can't even get a simple agreement on splitting the housing costs, how are you going to feel about dividing other living expenses, like groceries, meals out, etc? I just foresee so much resentment and arguing over money in your future if you move in together now, without resolving these issues first. And then it really sucks even more if you're already living together and then have to deal with a break-up.
-
If you'r not gaining equity in the house you should not contribute to the mortgage. Him paying 100% of the mortgage expenses and you two splitting all other non-equity building expenses (taxes, utilities etc.) 50/50 seems like a no brainer to me.
-
I'd have to say that it sounds like he's just not that into you -- he may love you and care a great deal about you, but these actions imply to me that he is not yet committed to marriage or long-term cohabitation with you
This. OP should totally go read the book.
I'm a little confused if OP wants to get married / is looking for a common law relationship with her boyfriend, but seeing that they've been together 4 years leads me to believe she does. OP, if he was "into you", you'd be married and you would be on the house title. And you'd be entitled to 50% of the house. Unless you're cool with a casual relationship, break it off and live by yourself.
-
If you'r not gaining equity in the house you should not contribute to the mortgage. Him paying 100% of the mortgage expenses and you two splitting all other non-equity building expenses (taxes, utilities etc.) 50/50 seems like a no brainer to me.
That sounds ridiculous to me. If this is a 500k house in CA, then property taxes are 5k per year, utilities are probably no more than $400 month if they are not remotely frugal, so you are saying that she should pay around $450/month, while the major housing cost, the mortgage, on a 30 year mortgage of 400k, would be what $2,000/month, and he would pay 1/2 the utilities in addition to that?
That seems very selfish of the low-earner, to feel entitled to not pay rent just because the higher earner is building equity in their residence. You need to look at how much you would save by renting somewhere alone vs cohabitation, there should be an easily identifiable spot where both come out ahead financially by the cohabitation. Of course, this is the consequence of purchasing a huge financial asset like this before you are married....and why it is generally not recommended.
-
If you'r not gaining equity in the house you should not contribute to the mortgage. Him paying 100% of the mortgage expenses and you two splitting all other non-equity building expenses (taxes, utilities etc.) 50/50 seems like a no brainer to me.
This is a GREAT idea!! The only problem is, you're forgetting INTEREST which is not part of equity.
Let's do a little rough math here.
Say for a $500,000 loan with no PMI, 30 years, and a 3.8% interest rate (guess?) his mortgage payment will be $2300. Starting out, it will be about $750/mo towards principal and $1550/mo towards interest. Those two won't even be 50/50 for almost 10 years.
Take another $500/mo for property taxes/insurance, then another $300 for all utilities/internet, etc. that puts us around his $3000/mo amount. Take out the $750/mo principal and you have $2250. So they split that, and get $1125.
By your logic, that $900 is a sweet bargain!
All joking aside, neither seem ready for marriage, and only hearing even just the OP side of the story and logic, it sounds like she is just as guilty as he is for thinking about "me me me" instead of them acting as one.
-
Interest is a mortgage related expense and should not be split. He is buying a house. They are not buying a house. She should not fund his retirement accounts and she should not pay for his house.
If he is paying for the TV he bought when she moves in, he should pay 100% of those payments (including the interest) even though they are both using it. He bought it, they didn't buy it. They can split the expenses of using it (e.g. cable) 50/50.
If he wants a roommate he can get one. I guess they are not billing each other rent for using cars or TV's, or billing for cleaning the others messes or for sexual favours, so they should not be billing for lodging. If he is not prepared to share the house with his GF then he shoudn't, and that is ok. But she is not just some tenant, so billing her is weird.
I'm not saying they can't agree for her to pay more. There is no right answer as long as both parties agree. But automatically assuming that he has some kind of right to make her participate in buildig his wealth is just... meh...
-
Interest is a mortgage related expense and should not be split. He is buying a house. They are not buying a house. She should not fund his retirement accounts and she should not pay for his house.
If he is paying for the TV he bought when she moves in, he should pay 100% of those payments (including the interest) even though they are both using it. He bought it, they didn't buy it. They can split the expenses of using it (e.g. cable) 50/50.
If he wants a roommate he can get one. I guess they are not billing each other rent for using cars or TV's, or billing for cleaning the others messes or for sexual favours, so they should not be billing for lodging. If he is not prepared to share the house with his GF then he shoudn't, and that is ok. But she is not just some tenant, so billing her is weird.
I'm not saying they can't agree for her to pay more. There is no right answer as long as both parties agree. But automatically assuming that he has some kind of right to make her participate in buildig his wealth is just... meh...
I think that if he wanted a roommate, he'd be expecting significantly more monetary contributions than it appears.
-
I don't like this guy. You can do better.
Perhaps he can do better. If you've already forgotten (like many people have), she is the one looking to rent for less than fair market value, not him. Who is really being taken advantage of??
"Better" depends on your perspective.
If by him finding someone "better" you mean, with more money, sure.
It sounds like she'd rather not increase her rent. It doesn't sound like she's pushing him to buy a house, or get a better/bigger expensive place, and have him subsidize it. I mean, he's the one pushing for the house, and she's expected to go along with the ride, and pay whatever he wants and also increase her commute?
I'm old fashioned (didn't move in with my husband until a year after we married), but if I'd decided that I could afford "X", I wouldn't pay more than "X" to live with a boyfriend.
-
+1 on Dan ariely and social norms. Sorry but what if genders reversed doesn't work for me. Genders aren't on level playing fields in dating, if a woman spends 4 years on a relationship that goes nowhere, that's a large chunk of her fertile/dating time. To put in market terms, most men will contribute more financially, so he should upgrade accordingly.
I'm female and a math/logic geek so I also had a hard time accepting it when guys wanted to pay for dates. One time, we were both grad students and not only did the guy research an interesting outing (rare!) and drive, but he then sensed my discomfort with the friends/dating line and backed way off on the ride home. (I heard later he was pretty smitten and was worried he'd overplayed). I was trying to drop my share of the food bill accidentally in his car. That's not my $20, I have no idea where that came from. Not to be rude or make it less of a date, but its the kind of reciprocity I was raised with. At the same time, he refused to let me fake drop the money, because yeah. The final result is less interesting to me than the nudges every step, that both of us are tripping over ourselves to give more. I know the alternative - staying home, hanging with other people - is less enjoyable to me and I'm happy to bring my resources to bear. Another night maybe I would have paid the tip or came up with a theater outing and cooked dinner or suggested we take public transportation because parking is ridiculous. If I had a car and he didn't, I'd drive. It's not because I'm spineless or a feminist, I've been in strict 50/50 situations and your idea/ you pay situations.
But pretty much every time a social relationship works out, I notice that we both feel like we've gotten the better end of the deal. We both feel like we should give more (but accept the others generosity). In this case, it feels like the bf should pay extra /charge nothing for op to live with him, since 1. He will probably get a cleaner house, better (cheaper) dinner, and certainly more sex that way. 2. If he wants to charge market rate, he better expect to live with a slob who has male visitors stay overnight and runs off with the juice maker when she leaves. That is, if you want a roommate off craigslist, be prepared for a roommate off Craigslist. If he wants a less serious dating relationship, he should be prepared to drive to her apartment or job, take her out for dinner/theater/movie, stay at her place or drive her back to her apartment in the morning. I assume his dating bill will drop by at least $900/ month because living together is now acceptable for dinner to be pizza and movie to be a cheap DVD and a beer to be $1 instead of $8.
-
If you'r not gaining equity in the house you should not contribute to the mortgage. Him paying 100% of the mortgage expenses and you two splitting all other non-equity building expenses (taxes, utilities etc.) 50/50 seems like a no brainer to me.
This is an absurd notion. She is gaining a place to live. That isn't free.
I would not do it. He should want to help you. He is the only one gaining anything.
I disagree. I am sure if he advertised on craigslist $900 with all utilities paid, his phone would be ringing off the hook.
What he could get for it on craigslist is beside the point. Only if she was already planning to pay at least that much for housing could she be seen as trying to take advantage of the situation. He purchased the house of his own volition for an amount that he (supposedly) could afford. This wasn't a joint decision taking her budget into account. He wants her to move into his bedroom (not a craigslist room for rent) for the pleasure of her company and to subsidize his mortgage payment apparently. She gains nothing except the pain of stretching her income for a while, while risking the demise of the relationship and no where to live when that occurs.
Regardless of who is "right," this is an awful way to start a life together, if that is what you are trying to do. Get a place that you can afford and see how things go for a while.
So let me get this straight...you're saying:
He gets: Pleasure of her company and a subsidized mortgage payment
She gets: Nothing.
So...the pleasure of his company doesn't count? A place to live at under market rate doesn't count?
-
It's not the place she would have chosen, it's more than she wants to pay, and it's much farther from her job.
Sent from my iPad using Tapatalk
-
I would have told the boyfriend to run, not the OP. Why should he subsidize your life? It was your choice to get into the field you are in and hischoice was a higher paying job/career. In the apartment, you should have absolutely split in half, especially because even with that scenario you would be saving. Thrn when he buys the house, just offer the same as what you were paying in the apartment. You have been taking advantage of him IMO and now you are upset because he won't let you take even more advantage. If i was the BF, i would be upset that you even suggested paying based on % of income. I don't understand how people canbe so comfortable to see themselves entitled to another person's money.
-
He's looking at a mortgage that might be around $3000/mo, but expects with tax breaks that the mortgage might end up being effectively $2400.
. . .
We went back and forth a lot and finally agreed on $900 and that would include utilities.
. . .
I really don't think I should be paying close to half his mortgage when he makes so much more money than me, and when he would be buying this house regardless of whether I live with him or not.
Let's try that math again. $900 out of $3,000 is not "close to half" -- it is 30%. Even $900 out of $2,400 is not "close to half" -- it is 37.5%. And your $900 includes your utilities, whereas his $3,000 (or $2,400) does not. You want to be able to subtract his entire tax deduction from his side of the equation, but then not add in his utilities, maintenance, and other home ownership costs, which really isn't fair. Honestly, if he's agreeing on giving you a $900 bargain, then you really are paying only your proportion of the household income or a little less.
-
I disagree that the only way to fairly split costs is 50/50. There is more to fair than 50/50, would anyone say we should split all our food 50/50 because that would be fair - dispite the fact that SO loves bananas and I hate them, or that SO is a foot taller than me and needs to eat more. Where does it end? Do I need to split my birth control pills 50/50 with him too?
I agree with you that there are other fair ways than 50/50 (and depending on the situation, they might be more fair). But birth control pills seem to be a weird example. Unless you were taking them without his knowledge, yes, he should be paying 50%. He is getting exactly the same use out of them as you: Not having a child at an inopportune time.
This was an intentionally odd example - my point was should he get to eat half my pills so that we are sharing those 50/50 also, ie would anyone claim there is an unfair dstribution of pills because I take them all?
-
If you'r not gaining equity in the house you should not contribute to the mortgage. Him paying 100% of the mortgage expenses and you two splitting all other non-equity building expenses (taxes, utilities etc.) 50/50 seems like a no brainer to me.
This is an absurd notion. She is gaining a place to live. That isn't free.
I would not do it. He should want to help you. He is the only one gaining anything.
I disagree. I am sure if he advertised on craigslist $900 with all utilities paid, his phone would be ringing off the hook.
What he could get for it on craigslist is beside the point. Only if she was already planning to pay at least that much for housing could she be seen as trying to take advantage of the situation. He purchased the house of his own volition for an amount that he (supposedly) could afford. This wasn't a joint decision taking her budget into account. He wants her to move into his bedroom (not a craigslist room for rent) for the pleasure of her company and to subsidize his mortgage payment apparently. She gains nothing except the pain of stretching her income for a while, while risking the demise of the relationship and no where to live when that occurs.
Regardless of who is "right," this is an awful way to start a life together, if that is what you are trying to do. Get a place that you can afford and see how things go for a while.
So let me get this straight...you're saying:
He gets: Pleasure of her company and a subsidized mortgage payment
She gets: Nothing.
So...the pleasure of his company doesn't count? A place to live at under market rate doesn't count?
I never either of those things don't count. But they don't count in the way you seem to think they do.
He bought a house, not her. He chose the location, not her. He wants her to live there, but she can't afford the market rate for a room in the house that he bought. He is basically coercing her into paying more than she can afford to stay in a relationship and/or live with him.
-
If you'r not gaining equity in the house you should not contribute to the mortgage. Him paying 100% of the mortgage expenses and you two splitting all other non-equity building expenses (taxes, utilities etc.) 50/50 seems like a no brainer to me.
This is an absurd notion. She is gaining a place to live. That isn't free.
I would not do it. He should want to help you. He is the only one gaining anything.
I disagree. I am sure if he advertised on craigslist $900 with all utilities paid, his phone would be ringing off the hook.
What he could get for it on craigslist is beside the point. Only if she was already planning to pay at least that much for housing could she be seen as trying to take advantage of the situation. He purchased the house of his own volition for an amount that he (supposedly) could afford. This wasn't a joint decision taking her budget into account. He wants her to move into his bedroom (not a craigslist room for rent) for the pleasure of her company and to subsidize his mortgage payment apparently. She gains nothing except the pain of stretching her income for a while, while risking the demise of the relationship and no where to live when that occurs.
Regardless of who is "right," this is an awful way to start a life together, if that is what you are trying to do. Get a place that you can afford and see how things go for a while.
So let me get this straight...you're saying:
He gets: Pleasure of her company and a subsidized mortgage payment
She gets: Nothing.
So...the pleasure of his company doesn't count? A place to live at under market rate doesn't count?
I never either of those things don't count. But they don't count in the way you seem to think they do.
He bought a house, not her. He chose the location, not her. He wants her to live there, but she can't afford the market rate for a room in the house that he bought. He is basically coercing her into paying more than she can afford to stay in a relationship and/or live with him.
What she wants to spend, $600, is not market rate for anywhere in LA. She wants to pay less and have someone else subsidize her living so she can save.
-
So what if he descided to pay off the house. Should she still continue to pay the same amount as when he had a mortgage? If not, why? He still had to pay for it and she still gets a place to stay in. If yes, then why was the original amount based on something arbitrary as the mortgage payment which varies based on the length of the mortgage.
I don't think she should be paying for his stuff and the financing options he chooses should make no difference. As I said, they can agree on anything, but if your motivation is that "she has a place to stay", then the amount she pays should have 0 to do with the monthly mortgage payment.
If they buy a house together then it is of course a totally different story. He can also charge a rent, but it would feel weird to me. I could e.g. charge a friend for using my professional expertise if we would be talking about serioua hours. I would never charge my GF regardless of the hours I would have to put in.
-
Jesus all this crap about the OP needing a new BF or the BF needing a new girlfriend blah blah blah...if they've been together happily for four years then they're doing SOMETHING right, at least for now. I wouldn't write the relationship off over this.
1. When I was dating my GF I moved into her apartment which was in her name....we split all bills 50/50 even though I made about 50% more
2. We built a house together shortly thereafter and put the mortgage in both our names (a little risky since we weren't married but felt that was inevitable). By then we were making similar amounts, me maybe slightly more. We structured our finances such that we each get a roughly equal personal allowance of some set amount every month to do with what we please (now around $1500-2000/mo each). The rest goes into the joint account and is used to pay all the bills. So the person making more ends up paying more.
3. Eleven years later we are married and still use the same approach. Difference is that now wife makes a lot more than me so she ends up paying more towards the bills. Post-nuptial agreement insures that in case of divorce wife gets proportion of joint assets equal to the proportional difference of our average gross salaries over the course of our marriage.
Edit: the key difference here is that the mortgage isn't in your name. Since this is the case then I'd pay rent at market rate for what it is in the area. You live together for a while and figure out if the relationship is for real...if yes then the mortgage goes in both your names so you both have skin in the game and then pay proportionally, or work out the proportional allowance thingie like we did.
-
Here's a question to OP: have you had a "is our relationship for the long term?" conversation yet?
I mean, the biggest surprise to me is that you two have been dating for four years and both of you seem to be making decisions so independently of one another.
-
Here's a question to OP: have you had a "is our relationship for the long term?" conversation yet?
I mean, the biggest surprise to me is that you two have been dating for four years and both of you seem to be making decisions so independently of one another.
+1
-
Here's a question to OP: have you had a "is our relationship for the long term?" conversation yet?
I mean, the biggest surprise to me is that you two have been dating for four years and both of you seem to be making decisions so independently of one another.
+1
+2
-
But pretty much every time a social relationship works out, I notice that we both feel like we've gotten the better end of the deal. We both feel like we should give more (but accept the others generosity).
I really liked this point you made. I've found it quite true for myself as well. My last roommate and I at one point had a discussion where we both realized we felt bad for not doing more around the house. Then we realized we had both ended up with the chores we largely preferred and it was a good arrangement. We were never best friends but we were great roomies. After that I moved in with bf and it's definitely a different relationship, but the desire to give and to care on both sides is definitely a factor in success.
Jesus all this crap about the OP needing a new BF or the BF needing a new girlfriend blah blah blah...if they've been together happily for four years then they're doing SOMETHING right, at least for now. I wouldn't write the relationship off over this.
Agree! Though there are cases out there that people stay together due to inertia, social pressure, etc. who really shouldn't be. They should discuss the big questions head-on: where is their relationship going, how do they think they should handle money when they get there, and what that means for their financial relationship now. But jumping to "run" seems...well, like jumping the gun.
-
Both of you are equals. Both pull equal amounts of the weight; 50/50. His income is irrelevant. If you guys get married and divorced, you'll take 50% or more of the assets. 50% in, 50% out.
-
I would like to say something if I can say something hear. If you are going to move somewhere and live there, and pay for that, you better get a written agreement, so your rights are protected. What if down the road he thinks that he wants to rebuild his kitchen and therefore he would like to increase your rent. Plus, you might need a proof of paying the rent and so on and he would need to declare collecting the rent from you on tax documents. I think this is fair for both of you.
Having said that, once you have an agreement with someone, that becomes (unless we are talking about marriage) a business relationship. And I personally would NOT mix my business relationship with my personal life, landlord and boyfriend doesn't sound right to me. So in case of OP, I would stay in my own place until the things have moved to marriage and combining of assets. It seems like you are better off in your place anyway (the commute and the cat allergy).
-
I have not read all of the responses, but I would like to chime in with a story about my daughter. My daughter and her then boyfriend were going to get an apartment together. Then, without telling her, his mother got involved and they ended up buying a house together and just assumed my daughter would pay rent to live with him. I told her that why should she pay rent, (she was living at home) when she was not involved in his decision at all and could just visit him. I was really concerned because his mother was involved in his whole life. So she took my advice and they ended up breaking up which was a really good thing because she then went on to meet her now husband.
When my husband and I were dating, we both owned houses. I was not going to move in with him until I had a commitment from him that we were going to get married. Call me old-fashioned, but if he wanted to live with me, he was gonna have to take the next step.
I know things are different now (I am 62), but you have to look out for yourself in these matters and if marriage is your ultimate goal, you may not want to give up your place just yet. Marriage is different from just cohabitating. Basically if you are young and starting out, marriage is about combining all of your resources together and going forward from there.
Just my opinion for what it's worth.
Miss Prim
-
Both marriage and "sharing everything" are both social constructs to which I don't subscribe. I don't think a relationship is a healthy one unless both parties are separate entities in that both are doing their own thing but have the mutual bonding of their relationship. No, this doesn't have to materialize in a financial way, but it makes no difference if it does, in my opinion.
I don't think you have to have a written letter of commitment from him in order to consider moving in and paying your way. You'd be paying your way regardless of him, so you two can work something out. If the place is well above and beyond (in terms of quality, location) what you would have chosen to live in yourself, let him know that. I do think you should get the "girlfriend" discount since you're probably sharing a room versus having your own - but if he allows you your own room in his house then that's something you should pay market for.
Lots of people here are jumping to conclusions saying she should find someone else...for what? Take care of her for the rest of her life financially? Great advice. I'm pretty sure the OP is already on the right path of thinking and can work this out on her own since she knows more about her relationship than a few internet strangers. She already knows she should pay something - she just doesn't know exactly what. I agree that it should be below market rent in general though.
Bottom line: Paying your way is fair. $600 is fair - but you agreed to $900. Therefore, $900 is fair. Either give him an ultimatum of lowering the price, or live with it.
So I think he should charge her what he would charge any potential roommate plus an equal split of the utilities they share.
I mostly agree - except that she isn't getting to choose the location, house, etc. She also will presumably be sleeping in the same room as him (he gets something out of it). So I think there's some wiggle room. I don't think she should be living for free, but she also shouldn't be paying market rent for the reasons listed.
-
Some people are saying that you feeling uncomfortable is a sign that the relationship is a fail. It very well could be. But my experience with money before I met my boyfriend-turned- husband of five years e as different. My background and emotions around that topic really guided me towards explicit terms, discussions around every major purchase, who's share was what. And my guy let me express my fear, express my concerns, express my wants and goals. He heard me. And, 99% of the time, without an argument, we hammered an agreement out.
The more we are together (and now we're married) the more trust I feel. The more I don't sweat the small stuff. We don't have a conversation about who gets the furniture we just bought if we split up, anymore, for example.
But we still definitely split bills approximately to percentage. If one of us is unemployed short term, we cover our share out of savings. If I pay off his school loan because I have the funds, he will pay an equivalent amount to my debt as well. That's where my comfort zone is right now. To push me on it (and here I say he is perfectly happy with the arrangement. I make more than him, and pay the highest percentage) would make me feel unheard, taken advantage of.
Your emotions are your own. Finances have emotions around them, to ignore that can be silly. The only red flag to me is that it seems like you're feeling unheard. Which leads to resentment. Which will destroy your happiness with anyone. You have a right to feel what you want and only you can decide if these emotions are getting in the way of your goals. If they are, then you work on them. If they aren't, then find someone more understanding.