Finances, Expenses, & Payments
Managing multi-party finances is difficult without a plan. Co-owners can get ahead of the challenges by understanding the types of cash outflows to expect and deciding how to handle expenses.
Types of Expenses
Expenses fall into two categories:
1. Recurring expenses:
Mortgage, insurance, private mortgage insurance, property taxes, HOA/condo fees, bills, home warranties, home services, etc. Recurring expenses come due at different times and are subject to unique pricing models (= complicated).
2. Non-recurring expenses:
Upgrades, repairs, maintenance, incidentals, emergencies, etc.
Expense Handling
It's important to discuss and agree on:
➡️ How you'll split expenses
➡️ How you'll pay expenses
Splitting expenses can be based on ownership percentages, divided equally, or otherwise shared. What's important is to align expectations up front and get things in writing.
💡 Pro Tips
Most payments, like monthly mortgage payments, must come from a single account.
Many co-owners choose to open a joint checking account to handle recurring expenses. Some co-owners also decide to open a joint checking or savings account as a reserve fund to cover non-recurring payments.
Course Authors
Matt Holmes (LinkedIn) is co-founder and CEO of CoBuy, formed in 2016 to unlock homeownership for everyone. Before hopping a flight to Seattle to start CoBuy with his mother, Matt worked in investment banking and financial markets in London for a decade. He holds degrees from University College London (BSc Economics) and ESCP Business School (Masters, London & Turin).
Pam Hughes (LinkedIn) is Co-founder and COO at CoBuy. She has over 40 years of experience across finance, real estate, insurance, and construction. Pam has committed to personal empowerment through financial education for decades, which inspired her to start CoBuy with her son in 2016. She's best friends with a small dog known as Francis.
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