How to split expenses with your partner

Planning on getting hitched or moving in with your partner? Once a couple starts planning to live under one roof the topic of how to split expenses needs to be discussed. There is no ‘one way’ or a ‘correct way’ to share expenses, every couple has difference circumstances, so you need to select a method that works for you.

When kicking off the discussion about moving in together, be sure to consider where you will be living, each persons take home pay, the lifestyle that you are looking to live, savings plan, retirement, etc. All these items will play a factor in how much each person can contribute to the expenses.

What is most important is that you have the talk about money and how you will split expenses BEFORE moving in together, and certainly BEFORE getting married.

Here are the top 3 ways couples can share expense money with your significant other:

1-      Splitting expenses 50%/ 50%

Splitting everything down the middle is the most common way for a lot of couples to share the household expenses ie: house (mortgage/rent), utilities (gas, electricity, cable), car, (gas/maintenance), groceries. In this scenario, it does not matter what the salary is of each person, every expense is split equally. This is the most common way couples split expenses. To easily manage this method, consider having a joint bank account that you both contribute to on a monthly basis

2-      Splitting expenses based on income

Since each partner earns a different salary you can consider contributing a percentage of your income, per month, to a joint account. The percentage can vary depending on the amount of the expenses and the amount of income that each partner is bringing home.

As an example: if one partner earns $45,000 and the other earns $90,000 and the monthly household expenses are $4,000, The partner with the lower income could cover 40% of the expenses and the remaining 60% can be covered by the partner with the higher income. The couple will need to decide on the percentage split and will need to consider all expenses, ie: investing, savings, retirement accounts, etc.

3-      Split different expenses

If you and your partner are not interested in having a joint account you can opt to split the actual expenses. Just like the splitting up of household chores (laundry, cutting the grass, cooking, cleaning, etc.) one partner will handle the remortgage/rent, and the other will cover utilities, cable, retirement funds, etc. A fair arrangement doesn’t necessarily need to divide all expenses perfectly, simply divide expenses accordingly to the couple’s situation.

Have a budget date night with your significant other

Living with someone is a big step and with this step comes new financial responsibilities. Holding a budget meeting, or as I like to call it, “budget date night’ monthly or bi-weekly ensures that everyone is up to speed and comfortable with the overall household expenses, the split of the expenses and this gives you both a chance to reconnect over a meal (and a coupe glasses of wine!). During the discussion ,take the opportunity to also discuss: your savings plans, your spending plan (aka Budget) , and if you have enough saved in your emergency fund .

As mentioned there is no ‘correct way’ to split expenses in a couple you just need create an approach that works for you.

So how do you split expenses with your significant other? Share you comments below!