Should you split expenses 50/50 even if your partner makes more?

Managing finances individually can be difficult, let alone in a partnership. The cost of living continues to rise across the country leaving many people in tight situations – making ‘this or that’ decisions. When we throw in savings goals, overall financial awareness, and debt payoff on top of the normal demands of adulthood; we’re left with finding a middle ground for what best works for the both of you. Let’s dive in.

Evaluate overall expenses

This may seem rudimentary, but it’s important to list every single expense and any outstanding debt. In this way, you and your partner can distinguish the collective number of things you’re responsible for financially. Be as specific as possible; this will be a crucial part of this exercise. In our heads, it seems that rent, utilities, car payment and other expenses may not be much but when you take the time to list everything one-by-one, it truly gives a bird’s eye view perspective. Don’t forget to include monthly subscriptions such as the gym, streaming services, or recurring application expenses. Reviewing your monthly bank statement can also serve as a guide to ensure nothing is omitted. Once that’s completed let’s move on to the next step in this process.

Explore all options before making a final decision

Every couple is different, so there’s not a one size fits all approach. Here are a few suggestions for you to consider.

50/50 split: if you both have similar incomes, this option is optimal. This can mean splitting every bill down the middle (which is honestly more tedious), or each person is responsible for a certain amount of bills that total up approximately the same amount. This relieves any emotional strain of one person feeling like they’re spending more than the other.

Highest earner pays: If you or your partner make substantially more than the other this is an option to explore. This mainly works for extenuating circumstances. For example, if someone is a teacher and the other is an executive, the income difference is very clear. This doesn’t mean the teacher shouldn’t contribute at all, but their contributions would be offered in other ways. It could be purchasing groceries or doing some of the tasks around the house. It’s most important to have fluid communication with this method as you want to ensure there are no feelings of guilt (from the partner that earns less) or feelings of inferiority (for the high earner). Relationships are partnerships so both parties need to be fully present and willing to communicate for a healthy outcome.

Income percentages: For couples that desire to live well beneath their means, this is a great method to explore, and tweak based on financial goals. Let’s say a couple would like to spend 30% of their income a piece and contribute that amount to household expenses. In this way, neither individual is overextending themselves past their comfort level. Hitting savings goals, paying off consumer debt or simply just avoiding lifestyle creep as incomes increase are all reasons to give this one a try. 

Separate expenses and responsibilities: No split is perfect, but assigning expenses based on income can lessen the load on both of you. The higher income earner can pay the rent or mortgage, while the other person can take groceries and the utilities. Don’t forget the main objective here: you all are a team. You’re trying to determine how to help one another, and you are investing in each other’s future.

Collectively, you can decide to use one method or a mixture of them all depending on your current financial season. Don’t be afraid to test one method and adjust. Personalize it and set up a system that guarantees financial success.

Determine how bills will be paid

No matter what method(s) that are chosen, it may be best to open a joint bank account. The both of you will have visibility to everything and no one will be left in the dark. You all can opt to set up automatic drafts for a percentage of your income to be routed into the shared bank account. This skips the step of transferring on your own, reducing the risk for any error. Let’s admit it – we have lives and things slip our minds. Automatic bill pay can also be used just to guarantee all bills are paid timely.

As an alternative, each person can pay the bills they’ve agreed to out of their personal accounts. Be sure to have a spreadsheet or any type of tracking system to keep up with due dates, amounts and confirmations at least monthly. Every month be sure to recount things that went well and things that didn’t fare out great. Use the previous month’s wins to propel you forward and the missteps are fuel to get it right in the future.

Assess your progress as time goes on and make adjustments

Once a week, the two of you should be touching base regarding your finances. I know what you’re thinking, “Once a week?” For example, you can discuss what bills have been paid, how has your money been used and/or simply discussing any upcoming expenses or purchases. This may seem overbearing but creating a level of transparency regarding finances is crucial. The number one reason many partnerships fail is due to finances. Whether it’s overspending or not being fully honest, you want to avoid any traps that can create strife between the two of you. It may be uneasy in the beginning, but the more comfortable you are early on – the easier it will be in your relationship moving forward.

Disagreements are natural in any relationships, so don’t be alarmed if there are any when finances are being discussed. We all have very different relationships with money, various money habits and varying levels of discipline. The idea is for the both of you to identify your weak points, have your partner fill in those gaps and you do the same for them. Teamwork, consistency, and patience will create a strong foundation that will contribute to your partnership – and that’s far beyond finances.