A Complete Guide to Splitting Expenses as a Married Couple

Oct 5, 2022 | Arizona Prenuptial Agreements, Finances, Prenuptial Agreements, Protecting Assets, Protecting Assets

You did it! You are now married, and two people’s finances are about to become one…well, at least more “one” than before. Light Bill? Shared. Grocery Budget? Shared. Rent or Mortgage? Thank Goodness…Shared!

You and your partner may have just decided to start splitting all your household expenses, this may not be as sexy as your wedding day kiss or your honeymoon; but trust us, this is just as important! It is common for couples to fight and have struggles about money so knowing how to split expenses can save you both some serious drama and hiccups along the way.

One key system to spitting expenses in marriage is that you both must have a raw and honest conversation about money. Money shouldn’t be a taboo subject. Share your thoughts about money openly and honestly from the start. Have a complete download on your money situation well before you start to split your expenses.

There are things you both need to know and discuss; for instance, how much money you both make, is there any money saved or invested, or is there any extra income earned by either you or your spouse. Have a real-life-conversation. These “conversations” aren’t about judging or evaluating the other in anyway. They are about understanding where you both stand financially and how you both can grow together as partners.

In this article, we will share with you our complete guide to splitting expenses as a married couple. Studies show that splitting expenses strengthens the relationship and establishes equality, as you’re not just leaving one party to pay for everything. Well, ultimately it will all come down to how you and your spouse view your relationship and we strongly encourage communication.

Everything in life requires balance. Here are a few ideas on how you and your partner can split your expenses

  • Split everything right down the middle

Whatever works for your marriage, may not necessarily work for another couple. In this situation, where every expense is split equally; that is, 50/50. You might choose to split each expense as it comes in or keep the receipts and pay your spouse at the end of each month whatever is “owed.”  You could also take turns in paying for dinner, this also qualifies as splitting costs evenly.

  • Split expenses based on percentage of your income. Be fair!

Splitting your expenses 50/50 may be considered as fair, but what if one person has a much higher income than the other?  Try this tactic; split your expenses based on a certain percentage of your income. For instance, let’s say you both agree towards contributing 35% each of your monthly income. You could either contribute that percentage monthly into a joint expense account or one person can be responsible to collect the money and pay for the bills. In this scenario, the higher earning partner will contribute more dollars in raw-money, while the lower-earning partner contributes less; but you and your partner will be paying the same percentage.  This is a fair way of splitting expenses, and most couples choose this way.

  • Have a joint “Expenses Account”

With a shared expense account, you both contribute a set percentage and pay all bills from one account. It can work, just know that having a shared expense account means a lot of back-and-forth communication. There needs to be always enough money in this account to cover your monthly bills, and you must trust that your spouse doesn’t take from this account unnecessarily, which can result in insufficient funds and overdraft fees.  This joint savings account is only specifically for your monthly expenses.

  • Each person pays what they can afford

This is another strategy you and your spouse can agree on. In this case, you clarify all your expenses and decide which set of bills each one should be responsible for by assigning what one can afford. Each person maintains his or her own separate account paying bills they are responsible for whilst maintaining maximum financial independence. Itis important to say that you must always keep each other accountable to your agreed upon plan so no bill is left unpaid or falls behind.

  • What’s Mine, What’s Yours is all “Ours”

In this “mine, yours is all ours” strategy, you both agree on having a combined account (no separate accounts) and you both will spend money from that joint account. Both paychecks will be directly deposited in your combined account and all expenses will be taken from that. Also, you both can agree to receive an allowance for personal expenses or carry credit cards.  This option may create more trust in your marriage as there will be no secrets with money.

Money issues may arise from time to time in marriages when money is not openly discussed from the get-go.

Listed below are some issues that you may need to discuss with your spouse prior to splitting your expenses.

1) Income Inequality

Income inequality can cause stress and tension in a relationship if couples do not discuss their finances clearly from the start. For example, if your partner earns $200,000 a year, and you only make $40,000, it might be very unfair to split all your expenses (including your mortgage) straight down the middle. Splitting your expenses based on a “percentage of income” may make the most sense for your marriage.

2) An unexpected expense

Have a back-up plan! Look ahead and create a game plan for the unexpected expenses that life has a tendency to throw your way. It is wise to have a savings account for the “unexpected expense.”  You both need to agree that this money is special and should be used when an emergency arises. A luxury 5-day trip to Dubai is not considered as an unexpected expense. It is an emergency when one of your cars breaks down, your dog gets sick, or either you or your partner are suddenly laid off from employment. The purpose of this savings account would be for emergencies ONLY!

3) Who pays for the tab?

Who pays for what? The first problem is obviously who will pay for what. Ideally, this is a topic that you want to discuss prior to your marriage. It must be clear what you need to expect with each other, you may decide to take turns or maybe the one who earns most pays for dinner. Best to clear this out beforehand!

4) What if one partner can’t pay up or mismanages his/her money?

There are two types of people in this world: the spender and the saver. Everyone has their own set of money values, behaviors and traits which begun in childhood and continues all throughout adulthood. One key rule in marriage, especially when it comes to money is having open communication. You both must be realistic and set rules. Recognize and accept the differences. Although you don’t have to support bad financial conduct, such as keeping money hidden, or mismanaging money, you must acknowledge that you and your partner are two different people with two different perspectives on money.

If anything, dividing the household costs should be clear and you must make a commitment to always be honest when it comes to credit. Keep in touch consistently.

5) Who makes the financial decision?

Okay, so there’s no financial rule book (or none that we’ve come across yet,) that states that the partner who earns the most income should spearhead the financial decisions. It should always be between the two of you. Who do you think is better at managing your money between the two of you?  Assign one partner regardless of how much he/she makes to be the Head of Finance in your home.  This person will most likely be the one who is good with numbers.

6) What if one partner does not bring in any income?

If you or your partner is a stay-at-home dad or mom or maybe in between jobs and do not contribute financially. You and your partner can both agree that the one who does not bring in anything, financially could take on of the household chores. This way you may avoid any guilt or resentment in your relationship ~ do whatever it takes to make your marriage a success!

In summary, splitting expenses as a married couple is an important aspect of having a stable relationship, especially when you’re living together. However, sharing bills with your spouse may not be your jam, and it’s okay!  You and your partner will need to come into an agreement (before marriage) and discuss about finances, expenses, debt and how money will be handled in your relationship. In a study, divorced couples mentioned that the number one conflict that drove their marriages apart involved their finances. Avoid conflict and any money issues with your spouse and have an honest and open conversation. Prepare, plan, budget and seek professional help, if needed.

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