How do you know if you should split bills 50/50 with your spouse or partner?
Managing finances in a relationship can be tricky. How can you manage your expenses so that everyone is paying their fair share?
Even better, how can you come to a peaceful agreement on who pays the rent or bills? After all, fighting about money is one of the leading causes for divorce.
Luckily for you, I’m going to show you multiple ways married couples split bills. If you have separate finances when living together, these guidelines can help you find a solution for paying bills.
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How should married couples split finances?
Ultimately, how you determine to split your finances as a couple will be up to you. There is no right or wrong way to split bills, if you both come to an agreement happily.
That being said, there are a variety of methods for splitting bills with your partner. However, before you can split expenses, you need to know the breakdown of your expenses.
You should know how much money is owed each month for rent, utilities, groceries, and other shared expenses. Write them down before you proceed (e.g. Rent – $900, Electricity $ 85, etc.).
Generally, husband’s and wife’s pay the bills using one of four different strategies when they have separate finances. These methods include splitting bills 50/50, income percentages, high earner pays, or dividing separate expenses and responsibilities.
I’ll show you each method below.
Regardless of your choice, owning a joint bank account is always a good idea for paying similar expenses. Starting a budget to manage your finances is also something you should consider.Click to Tweet! Please Share!Click To Tweet
When should you split bills 50/50 with your spouse or partner?
Splitting bills 50/50 with your spouse or partner is very common. Generally, just agreeing to split 50/50 will alleviate the headache of finding another method.
50/50 works great when both partners have similar incomes and split resources equally. Your husband might eat more food while your wife might use more water. No one cares about the difference.
You are both working as one team, very similar to families who combine finances. However, you maintain your individual finances but pool together equally to pay bills.
When should you split bills based on income percentages?
Splitting bills based on different incomes is common when one partner earns more than the other. Alternatively, you can split bills based on income when one person is considered low-income.
For example, maybe your rent, utilities, and other shared expenses total $1,500. One partner earns $3,000 per month while the other only earns $1,000. Splitting expenses 50/50 wouldn’t work well because the low-income earner would only keep $250 per month after expenses.
In a lot of cases, the higher earner might want more liberties (more expenses) because they can afford more. Therefore, the low-income earner may live more of an extravagant lifestyle than they could afford on their own.
So how do you split bills based on income?
First, tally up all of your shared expenses and determine your total income. In our example, the total expenses between the couple was $1,500 per month while they earned $4,000.
Now, we can determine expenses as a percent of total income. This couple has an expense ratio of 37.5% [=($1,500/$4,000)*100]. Therefore, each couple should pay 37.5% of their income towards expenses.
The low-income earner would place $375 (37.5 percent of $1,000) into the couple’s joint bank account. The high-income earner would be responsible for $1,125 or 37.5 percent of $3,000.
Everyone pays the same base percentage. Both parties should be happy that it’s cheaper than living on their own and paying for the same expenses.Click to Tweet! Please Share!Click To Tweet
When should the highest earner pay for all expenses?
Very rarely should the highest earner pay for all the expenses. Unless, you have a very generous partner that doesn’t mind paying for all expenses.
You’re splitting bills in a shared house for luxuries that you’re both using. Therefore, both parties should pay something.
Generally, the highest earner might pay for all the expenses when they earn a substantial amount more than their partner. For example, someone who earns $10k per month when their spouse earns $1k.
Otherwise, one partner might temporarily pay for all the expenses if their partner lost their income. Relationships are about supporting each other, not taking advantage of a situation or income difference.
Again, having one person pay for all the expenses is uncommon, but that’s up to you to decide. Your family will need to figure out what works for you.
Separating expenses and responsibilities.
Another option is to split responsibilities for certain expenses. First, you would figure out a rough dollar amount each person should pay. Then, you would pick expenses that you’re responsible for paying.
For example, your total expenses are approximately $1,500 per month. Each partner has an income around $2,500 per month, so expenses will be split 50/50 or around that ratio.
This couple pays a monthly rent of $750, which is approximately half of all expenses. Therefore, one spouse can cover the rent, while the other spouse pays the remainder of expenses.
Everyone owns an expense(s) and is responsible, on their own, for paying it.
Couples who keep separate finances love this style of paying bills because it maintains separation. You don’t need a joint bank account if you don’t want one.Click to Tweet! Please Share!Click To Tweet
Summary: Should you split bills 50/50 with your spouse or partner?
As you can see, there are many ways can split bills with your spouse or partner when you have separate finances. Living in a shared house doesn’t have to be overly complicated!
The four main ways to pay bills in a relationship with separate finances include:
- Splitting 50/50. Perfect for couples who have similar incomes. You don’t care as much if someone uses more of one expense, like food, because you know it will balance out.
- Income percentages. Perfect for most couples who want to pay for expenses based on a percentage of their income. If your combined expenses are 30 percent of your combined income, then you each pay 30 percent.
- Highest income earner pays. Generally, this is not the recommended method for paying bills. The high income earner may choose to pay if they are feeling generous or their income substantially outweighs the other.
- Separate responsibilities and expenses. Agree on a rough split between expenses. Next, assign each person expenses that match your rough dollar amounts. Maybe one person takes the mortgage while the other person takes utilities and groceries.
Regardless, you have to make your bill splitting an agreed upon activity. You are one team trying to figure out how to help each other.
I highly recommend opening up a joint bank account for the purpose of shared expenses. You can direct deposit your portion of cash directly into your shared account. Some banks will even have automatic bill pay which can make this process painless.