How To Split Your Expenses As A Couple

How do you split expenses with your partner?

Living together with someone can be very exciting. And one of the ways to make sure the excitement grows into long-term happiness & contentment is to make sure the money conversations are out of the way. When you live with a roommate, how expenses are split is usually clear. But things can get fuzzy in a relationship. Here are a few ways in which you can navigate how you split your expenses.

Decide what needs to be split.

Arrive at a consensus with your partner regarding which expenses will be split in the first place. Anything that involves a shared resource can be split. What you’re essentially doing in this process is determining what’s “yours, mine and ours”. Rent, groceries, utilities (electricity & water), internet & joint EMIs are a few examples of expenses that fall under the “ours” bucket. What you want to think about is how to tackle the “yours & mine”. Will you share everything? Or will you split based on usage? Every couple has their own opinion on what works best for them. So you get to choose what works best for both of you.

Equal is not equitable.

The easiest way to approach sharing expenses would be to split them equally between yourselves. But equal is not equitable. You might be making more money than your partner and vice versa. So if there is an inequality, you must look to solve it in a way that’s mutually beneficial. The two most practical ways to split your expenses are:

1. In proportion of your income: You divide your expenses based on what you bring to the total household budget. This works for couples with a difference in income that isn’t very significant. It also works if both of you feel you need to contribute to every expense.
2. Taking on specific heads of expenses: You can each also take on a specific head of expense. One can pay rent while the other can take care of groceries. This works well for couples with significant differences in their income. It also works well for couples who have very different careers/needs. If one of you works from home while the other has a commute, for example, it makes sense for the person with the commute to take care of all expenses related to the car. Similarly, if one of you has a job that requires you to take on multiple subscriptions, then they should be the one to cover those expenses.

Don’t forget debt

Debt needs to be discussed along with expenses because it impacts your household budget. While joint debt you’ve taken together can be handled together, there needs to be a conversation about personal debt. And this can be a loan you took before you got together or a commitment specific to you (supporting your parents, for example). It is unfair to expect your partner to take on a new liability they didn’t sign up for, but if they’re willing to contribute to it after you have an honest conversation about it, that’s great. If you need to take a loan after you get together with your partner for a personal reason, don’t forget to talk with them before you do.

A note on hygiene

Joint accounts are incredibly convenient for common expenses as well as couples whose money styles involve looking together all resources. They are also great for couples wherein one partner may have irregular income schedules from freelancing. But their convenience shouldn’t make you operate only out of one account. Having separate accounts apart from your joint accounts is highly desirable. This will help in case of bank system failures and, more importantly, give you an extra layer of security in your relationship.

How do you split your expenses in your relationship? Leave a comment below & we’ll talk!