Splitting Expenses - What's your strategy?

Tuesday, January 22, 2013

First of all, can I just say that I wrote this entire post & then blogger deleted it!? Thanks blogger! NOT! #bloggerproblems

Grrrr... Anyways...

I thought we would talk about something that has been on my mind a lot lately. That something is splitting expenses within the household.

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Working in real estate, I get to help people with one of the biggest financial decisions of their life, buying a home. Not just a home, but their home. When working with buyers in the home buying process, not only do we break down what the home costs & what the monthly mortgage payment will be, but we also break down how these added monthly expenses will fit within the overall household budget.

I work with a lot of buyers. Husbands & wives. Newly engaged couples. Single people. Boyfriends that bring their girlfriends along. Girlfriends that bring their boyfriends along. Girlfriends that bring their girlfriends along. Sometimes people even bring their dogs along for the process. Heck, we don't discriminate.

Working with this diverse group of buyers often has me wondering how couples split their household expenses.

I mean, lesbereal. In todays day & age, not all couples that live together are married. Or engaged. Or anything. Nothing wrong with that, heck I'm one of them! But not being married often means seperate finances, so this can present a sticky situation when talk turns to splitting the household bills.

Jason & I have lived together for 4+ years, so we have had plenty of experience with splitting household expenses. We've definitely found what works for us. That's why we look oh so happy, right?!

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Just look at those smiles! I look way happier than Jason, ha! ;)
 

There are many ways to go about splitting household expenses, but as with any relationship or co-living situation, communication is key! Be sure to discuss splitting expenses upfront, so everyone can have realistic expectations & be on the same page from the get go!

Here are some possible tactics for splitting household expenses:

Split down the middle.

Likely the most straightforward approach to splitting expenses, you could just split them right down the middle. 50/50. Each person pays their half. Something important to consider here is which bills are included in the 50/50 split? All expenses including personal expenses such as car, insurance, etc.? Or just household expenses such as mortgage, rent, utilities, etc.?

Split based on income.

What if one person makes double what the other person makes. Should they pay double the amount [or 2/3's] towards the household bills? Maybe, but this could potentially cause resentment if not discussed and agreed upon by both parties. Once again, communication is key, people!

Split the bills up.

Another way to approach splitting up household expenses is to do just that, split the bills up. For example, one person will pay bills 1,2,3 and the other person will pay bills 3,4,5. This can also work very well as long as everyone's expectations are layed out upfront.

Creating a written household budget showing all shared expenses can help keep track of everything. I also keep a written personal budget each month keeping track of all expenses.

Like I mentioned above, Jason & I have lived together for 4+ years. When we decided to move in together, I moved into his existing home. We are not married or engaged, and we keep our finances seperate. We will not combine finances until when & if we get married.
We decided to go the route of splitting the bills up.

Each month, Jason pays the mortgage, and annually he pays the property taxes & home insurance. [Just as he did before I moved in] He also pays all of his personal expenses such as car, insurance, business expenses, etc.

Each month, I pay the gas & electric bill [more than you think!], the water bill, and all grocery expenses. I also pay all of my personal expenses such as car, insurance, business expenses, etc.

Splitting the bills up works great for us, because our incomes vary. [Jason makes wayyy more than homegirl here. For now anway ;)] This is a good way for us both to contribute to the household expenses.

However, I can see how another way would work for other people. Remember, it's all about what's right for your relationship & your living situation :)

How do you split household expenses?
Would you combine your finances with someone if you were not married?

xo
Sam

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This entry was posted on Tuesday, January 22, 2013. You can follow any responses to this entry through the RSS 2.0. You can leave a response.

4 Responses to “Splitting Expenses - What's your strategy?”

claire said...

Oh this is a good one! My boyfriend and I still disagree sometimes on what's fair as far a splitting expenses goes. We split the bills and rent 50/50, but groceries and household stuff is a grey area-I try not to be nit-picky about it, but because I run so many of our errands, I end up footing the bill a lot of the time! All of those sponges and lightbulbs add up to what could have been a pair of shoes!

Ashlee :) said...

My (now) fiance and I have had a joint checking account for two years now. It has made it a lot easier for bill paying - for us anyways - because we both put our money in and I make sure every bill gets paid. Yep, I'm anal about bill paying lol! Somebody's got to be :)

Janna Renee said...

We actually don't split the finances. All of our money goes in the same account. I subtract ALL of the bills from our income, subtract our retirement, subtract savings, and then what's left is spending and fun money. To us, it doesn't matter who makes more or where the bills are paid from. We just get it done!

M. at Making Sense of Cents said...

All of our money is put together. We've been doing this for years now and it has worked for us. Makes it a lot easier!