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when sharing finances, do you split equally?

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My sister was visiting me last week, and naturally (!) the conversation turned to personal finance. A few months ago, she moved into a very nice little flat with her boyfriend - they’ve been together for several years now.

As it happens, he earns slightly more than her, probably in the region of £200 per month in take home pay, but they split the rent and the bills equally. Since she’s not blessed/cursed with the fear of debt, she’s currently paying off her credit card debt, and can’t devote additional money to investing although they are both saving to visit New York in the next few months. She is not a debt-free Dave Ramsey devotee (she’s never heard of him) nor does she have an interest in personal finance.

I thought that it would be fairer if they (my sister and her boyfriend) split the bills according to percentage of income. That way they would have more similar amounts of disposable income, and my sister would have more cash available. Since I’m not the sort to interfere (well, not very much anyway) I only mentioned it in passing. But, what do you think?

Based on your feedback I’m…

…not going to say anything, as it’s not my place. But in case I’m ever in the same situation, I’d certainly give some weight to any good arguments you can put forward.

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26 comments for “when sharing finances, do you split equally?”

  1. i was once in a similar situation… my now ex-girlfriend and i also split everything in half… the rent, the bills, and the groceries. even though i was earning more… we never really thoroughly discussed about how the expenses should be split, but it was just kind of an unwritten rule… but none of us were having money troubles… what you suggested about splitting the bills according to your incomes percentage is a good idea (just never occurred to me at the time)… in their case though, i think that it should really help your sister a lot if they shared the bills that way… and i also hope that her boyfriend would be sensitive enough to offer it.

    Posted by James | June 25, 2008, 9:04 pm
  2. We’ve always just taken care of different bills in rough proportion to our incomes and in the areas our interests lie - so currently I pay the mortgage, he pays the cellphones, I pay the gas bill, he pays for his car expenses, and so on. He doesn’t like talking to banks, I don’t know anything about cars, etc. All good. We don’t have the time or the patience for the 50-50 or exactly proportional split; I always think you could end up arguing over who bought the cornflakes last month and down that way lies madness.

    Someone will come on here now pontificating about separate accounts leading to divorce, but I firmly believe that all adults should control and budget their own cash - I’ve never come across a couple where one partner wasn’t vastly more interested in the finances than the other, and with joint accounts completely takes it over.

    Posted by guinness416 | June 25, 2008, 9:29 pm
  3. @James:
    I don’t think that her boyfriend is insensitive, or that it’s an issue for them. I think that it has never occurred to them, much as it never occurred to you I guess. Neither my sister nor her boyfriend have any interest in personal finance, and they’re not spreadsheet geeks like me either.

    What I like about your system is that it’s so normal and un-geeky. You’re right that someone always says that separate accounts leads to divorce, I think it would be fascinating to see if there’s actually any evidence to back it up. I always thought that divorce was essentially down to more fundamental things than who’s name is on which account - but what do I know, I’m single :) .

    Posted by plonkee | June 25, 2008, 9:41 pm
  4. My partner earns about 30% more than I do, maybe a little more. We split the rent equally, he pays the electricity and internet bills. He also has a car and pays everything for it.
    I only give gas money for road trips, we split holidays 50:50, because I want to go more than he does!
    For groceries and home items he usually pays a little over half, but we don’t get our calculators out over anything!
    He does mention occasionally that he’d like to pay more as he thinks it would be more balanced, but he has more student loans than I do, and I’d be paying more if I was single so I try to contribute as close to half as possible.
    Like Guinness I hate the “seperate accounts lead to relationship doom” theorists.

    Posted by Looby | June 25, 2008, 10:07 pm
  5. I think they should stick with what feels equatable. If that’s percentages, good. If it’s 50/50, good. I can see both sides, but I expect that the person with the higher salary might feel bitter at times…because they had to get that job, etc.

    I think in married or long-term couples who don’t combine finances, the percentage makes the most sense. But in the I-don’t-know-if-this-is-long-term place, it’s best not to leave room for bitterness.

    Posted by Mrs. Micah | June 25, 2008, 10:19 pm
  6. I wouldn’t personally live with someone who I wasn’t married to, but I think an equal split is fair enough. After all, it’s not the guy’s fault she doesn’t earn as much as he does. ;) Now, if they were married, it’s a whole ‘nother game.

    Posted by Maria - Frugal Homesteading | June 25, 2008, 10:32 pm
  7. I don’t think the difference is so much that it really matters. I’m curious to know if he maybe tends to pay more for things when they go out? (such as dinners, etc).

    My boyfriend and I make vastly different amounts of money (ie, he’s bringing in 4-5x as much as I am, and I don’t really make pennies). He is currently in a different state, and our last conversation about money consisted of my saying I wouldn’t spend more than X dollars on a flight… and him saying he’d pay the difference.

    If we were ever to live together, I’d say we’d split things up to the point where I was ok with that expense. So if he wanted to live in a penthouse, he’d have to cover the extra. :)

    And I don’t think mixing finances is the end-all, be-all either!

    Posted by deepali | June 25, 2008, 11:07 pm
  8. We weren’t asked to pass judgement on the lifestyle, Maria. I don’t think it makes a difference whether a couple is married or not, the principles of finance and fairness should prevail.

    My bf and I have about the same difference in salary as Plonkee’s sister and bf. It has never bothered me, and we split pretty much everything down the middle. Whether or not you are earning the same amount, you are both sharing living space and costs. I have found that you feel better about your living situation when you are jointly responsible for the upkeep and will feel you have more authority to change things if need be. If I was paying less for things because of my income, I think that would have the effect of making me feel inferior to my bf, and not encourage me to look for a higher paying job.

    I agree with guinness416 and deepali, firstly that people should be responsible for their own cash and personal investments etc but also that if one partner has vastly more expensive tastes to other, that they should pay the difference to what the other can afford. Ultimately it comes down to compromise.

    Posted by Kerstin Doe | June 26, 2008, 11:40 am
  9. Hi. I’m a new reader to your blog. I like it!

    My fiance makes more money than I do. We split the rent equally. I pay the electric bill, and he pays the rest of the bills (gas, phone, cable, water, etc.) We share expenses for groceries and other things, but we don’t really divide the cost. Whoever is going to the store and/or has a little more money in their checking than the other pays for it.

    Once we’re married (5 weeks to go!), we are going to pool all of our money into one account, so it won’t be my money and your money anymore. It will just be “our” money.

    Posted by Kristen | June 26, 2008, 3:51 pm
  10. Regarding the “seperate accounts lead to relationship doom” theory: separate accounts probably saved my marriage!

    I am the financial planner in our household and for almost 15 years we kept most everything in one account. (We never worried about who paid how much, it was all just “our money”.) This led to many, many issues with her spending more than I had left in the account after paying bills. More importantly, though, it left her feeling like she had to come to me to ask permission to spend any money at all for fear of the former.

    In just the past year, I finally convinced her that we needed separate accounts - it was actually her that had insisted that we should be able make this work without going through “all that hassle”. I assure you, there is MUCH less hassle now!!

    We set up His, Hers, and Ours accounts. We each contribute 85% of our net take home to the Ours account to pay bills, buy groceries and gas, take date nights, etc. The other 15% we each keep in our own accounts to spend however we see fit, no questions asked.

    Though we do budget date nights from the joint account, we will still treat one another to extras on occasion - which is actually great fun! I earn more, so I pay a greater portion of the bills, but I also get more in my personal account - but we are both happy to be contributing equal percentages to the family budget. Things have been SOOO much smoother for us financially since we did this, and now she can’t quit talking about how we should have done this sooner!! (And we haven’t bounced a check in almost 12 months!!)


    Posted by Braunn | June 26, 2008, 5:40 pm
  11. We combine finances. What’s mine is his and what’s his is mine. Obviously we discuss our financial decisions. We both have spending money.

    If you choose to have separated finances, I think that you’re right that percentage of income is more fair. If it’s 50/50 it can really hit the lower-income partner hard. I still remember how in the Joy Luck Club one of the daughters is married to a man who insists they split everything 50/50 even though he earns far more than she does — she does not seem happy. I also knew a couple who would not just divide the groceries 50/50 but figure out which item belonged to which person and how many buns each one would likely eat; also, the higher earning partner would take expensive vacations alone because the spouse could not afford it! How petty.

    Posted by Canadian | June 26, 2008, 6:24 pm
  12. I agree with Kerstin Doe, in general. I don’t see why a boyfriend and girlfriend should split costs according to income. Nobody would expect roommates to do this, would they? The one exception is if the poorer partner is living in nicer digs than they would otherwise choose, in which case the wealthier partner should probably offer to kick in more. However, that should have been negotiated before the couple agreed to live together.

    I don’t think joint/separate accounts matters very much to the success of a relationship or marriage. If joint accounts work for bookkeeping reasons or whatever, like with Braunn, then great. However, I do believe that people who want separate accounts so they can buy whatever they want without consulting with their partner do have very large issues which have a high probability of leading to divorce down the road. Radical individualism is a real problem in a marriage and an insistence on separate accounts can be symptomatic of that. It’s not that there’s anything wrong with separate accounts; the problem is selfishness and separate accounts can be a symptom of that, though obviously not necessarily.

    We have joint accounts and neither my wife nor I spend anything without the other’s approval. Neither of us feels oppressed or put-upon because we’re a team and not competing with each other.

    Posted by Andrew Stevens | June 26, 2008, 8:13 pm
  13. I swear I have the best readers.

    I’ve never really contemplated actually moving in with someone (and I’m happily single now), so you really are all putting forward great points that I hadn’t really thought about.

    Thanks guys.

    Posted by plonkee | June 26, 2008, 8:28 pm
  14. I like the idea of percentages. I also like the idea of working out in advance what the lesser-income person can afford, and what the higher-income person is willing to put in over that.

    It’s funny because these things *seem* obvious, but I don’t think they actually are…

    Posted by deepali | June 26, 2008, 9:37 pm
  15. – I don’t think it makes a difference whether a couple is married or not, the principles of finance and fairness should prevail. —

    Personally, If we’re just going to date and live together for one or two years, I’d want to split costs evenly.

    Now that I’m married though the situation is different. I make a bunch more than my wife and would pay for virtually everything even if we did have separate accounts. In marriage there isn’t (or shouldn’t be) a mentality of “this is my house and that’s your car”, it’s a shared lifelong experience.

    Posted by Richard | June 26, 2008, 10:45 pm
  16. My bf and I make roughly 60/40 and we split our expenses that way. We track receipts for joint expenses in a computer program.

    Posted by Anca | June 27, 2008, 12:54 am
  17. My boyfriend and I moved in together about 10 months ago. We elected to budget according to a rough percentage system according to income (about 60/40, I am the higher earning partner). This system also allowed us to each save approximately the same amount vs what we were each paying individually when we lived alone in our own places. We opened a joint checking and joint savings account for shared expenses (rent, utilities, dining out together, groceries, and saving up for shared vacations). We each still pay our personal bills (cars, insurance, cell phones, student loans) from personal accounts and contribute a set amount weekly to the joint accounts.

    All the money that goes into the joint accounts is intended to eventually go out, long terms savings are still separate. I like doing it this way because it eliminates that awkward “whose turn is it to pay this time” when shopping at the grocery store or dining out with friends. If he wants to be the man and pay every time he can and I know that it’s already been split fairly in advance.

    Even though we aren’t married (yet) we have very much begun to build a life together and I think the percentage system helps us to do that in a more positive and healthy way. It reflects the fact that we view ourselves as partners working towards shared goals.

    However, I must admit, if I were the lesser earning partner I would probably have a hard time contributing less than 50%, I might struggle with feeling like I had less of a right to weigh in on joint decisions … :)

    Posted by Jen | June 29, 2008, 3:21 pm
  18. My cousin used to live with someone who insisted that everything be 50-50. So she had to put in 50% of the entertainment money, which he would spend on beer. She had to pay half the cost of travelling to the city (they lived in a very remote location because of his job and were 6 hours away from family and 8 hours away from the city), but she had no say in how they went — if he wanted to take his motorcycle, she was hanging on for 6 or 8 hours hoping she would not fall asleep and fall off. Needless to say, he is not in the picture anymore.

    Anyway, I’m for proportional splitting (if you are keeping track — I’m married, so it is effectively pooled resources). But if you go for 50/50, I’m with the ones who say the lower income one calls the standard, and if the higher income one wants a more expensive option, they kick in. I suspect that ends up making it more like proportional splitting anyway.

    Posted by Margaret | June 30, 2008, 5:20 am
  19. I think each person should have the same amount of personal money each month, regardless of what each person contributed. That means all money goes to one account, all bills and joint savings goals are satisfied, and the remainder is split.

    Posted by Jon | June 30, 2008, 1:37 pm
  20. I agree, a percentage is much fairer and certainly once you move in together and/or get married it shows your committment to each other!

    Posted by Frugal Trenches | June 30, 2008, 5:41 pm
  21. My boyfriend and I are going through the same thing right now. I am moving in at the end of the month and we are trying to figure out finances. I would like to split the bills and mortgage by a percentage of our separate incomes (he makes A LOT more than I do) and he feels it would be fair to split things 50/50.

    He owns this condo, so splitting 50/50 I will be contributing to his mortgage. This seems very unfair to me. If we broke up (unlikely, but still) I would have nothing to show for it.

    I loved reading everyone’s opinions, and I can’t wait to talk to my boyfriend about all of this. Thanks!

    Posted by Hills | August 1, 2008, 7:54 pm
  22. My boyfriend and I have been together for 5.5 years now. We moved in together about two years ago. However, I had bought the house, alone, a few weeks before he moved to the area, so he had no part in it. We split the mortgage 65/35, with me taking on the higher part of the house payment. The house is in my name only, so he has no ownership. Plus, I make about twice what he does. We both felt this was a fair way to go about living together. Both of us have money left over after bills and he doesn’t end up feeling like has nothing left each month. We both felt it was the best way for our situation. However, he knows that if he makes more money, his part of the house payment will increase.

    Posted by Erin | September 4, 2008, 10:19 pm
  23. really nice piece of advice in order for them to settle down any argument if they have with regarding to bills and finances.

    Posted by weight loss toronto | April 12, 2010, 2:33 am
  24. I agree it makes sense to split the bills according to income. But the problem that arises is what happens when looking at recreational spending? Should, say, a movie be split according to income percentage? Or concert tickets?

    Posted by Credit Repair | October 4, 2010, 6:45 am
  25. Great post. Thanks for the info

    Posted by air conditioning | November 19, 2010, 4:06 am

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