How to Handle Joint Expenses in Your Relationship

What Constitutes a Joint Expense?

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50/50

Splitting bills 50/50 is really straightforward. Add up all the joint expenses, divide by two, and voilá, you know how much you each need to contribute each month. This often becomes the default for partners because it’s the most obvious option and on the surface appears fair (if that sounds like there’s a “but…..” coming, keep reading!!! You’re right!).

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Pros: Simple, easy to figure out at first, easy to readjust as things change.

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Cons: Rarely fair assuming your incomes are different. Typically, this results in the lower-earning partner having minimal to no discretionary spending money and constantly struggling to pay their bills or even going into debt. Resentment can build if they watch their higher-earning partner go on spending sprees or being able to save far more. Conversely, if you plan expenses around what the lower-earning partner can comfortably afford, the higher-earning partner may grow resentful of having to live in a cheaper place (often smaller, fewer amenities etc.) or go on cheaper/fewer trips etc.

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Things to consider: If you aren’t married or committed long-term yet, some people think splitting 50/50 is fairer in the short-term.

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How to do it: The classic pen-and-paper or spreadsheet always works well. Write out a list of all joint expenses and how much they are. Add it up, divide it in half, and you know how much each person needs to pay. Some couples like to use apps like Splitwise or Splid to easily track joint expenses. Others end up dividing the bills relatively evenly (spoiler alert for later in the article!) and calling it even.  

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Proportional to Income

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Splitting bills proportionally can feel fairer than purely 50/50, especially if there’s a big income discrepancy. Add your incomes together (say $100k and $50k = $150k), then divide one income by the total to figure out the percentages ($100k divided by $150k = 67%). In the example, the person earning $100k would pay for 67% of the joint expenses, and the person earning $50k would contribute 33%.

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Pros: Generally fairer than splitting 50/50.

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Cons: Can be complicated to get set up, and needs to be revisited whenever income changes.

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Things to consider: Some couples look at gross income; others look at net. Think about whether you want to take pre-tax retirement contributions, health insurance costs, and/or other paycheck deductions into account when dividing things up.

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How to do it: As mentioned above, add your incomes together, then divide each income by the total to figure out your percentage. From there, you could split the bills based on the proportions determined with the math so you’re each responsible for certain bills (see the next section). The simplest way to handle this is with a joint checking account. From there, you’ve got two primary options:

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1. Deposit all paychecks into the joint account then determine how much money to leave there and how much to transfer out to individual accounts for fun money/any individual expenses.

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2. Deposit all paychecks into your individual accounts. Calculate how much you each need to contribute to the joint account, and each transfer that amount each paycheck.

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Either way, you’ll need to reevaluate the dollar amounts whenever someone’s income changes.

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Assign Specific Bills

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“You handle mortgage and utilities; I handle daycare and groceries.” This method can be a strategy to handle expenses using either the 50/50 or proportional strategies. Some people have cultural ideals around who should pay for different expenses, so this can be a way for both people to pay bills more equitably and still hold to those expectations.

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Pros: Simple—you don’t have to worry about transferring money back and forth or contributing to a joint account.

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Cons: Every time a new expense comes up or an existing expense changes cost (hello rent or property taxes!), you have to decide who takes it on. It also doesn’t contribute to a sense of being a team because finances stay very siloed. There’s very little transparency.

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Things to consider: Is this a long-term partnership? Do you want to work together towards financial goals or would you rather tackle them individually?

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How to do it: Decide how you’re going to split the bills up, then do it yourself!

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“Our Money is Our Money”

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Using this approach, everyone’s income goes into one pot that’s used to pay all expenses. It doesn’t matter who makes more or less. The money you each earn contributes to the household expenses. This tactic is often used in combination with planning for individual fun money (whether through separate spending accounts or individual categories in MyBudgetCoach!).

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Pros: Exceedingly easy. No need to divvy anything up. You also have built-in teamwork towards joint goals, and it provides more equal footing regardless of income discrepancies. In addition, you’ve got two sets of eyes keeping an eye on things to look out for any fraud.

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Cons: Can be scary for those who have experienced or witnessed financial abuse. If there are unequal levels of savings or debt going in, this can also feel unfair.

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Things to consider: As mentioned, make sure you maintain some autonomy for “fun” or “discretionary” money. Everyone should have some amount of money each month that they can spend on whatever they want without their partner asking questions or judging.

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How to do it: Open a joint account, or use an existing one! Decide whether you’ll open separate fun money accounts or use MyBudgetCoach categories for your independent money, and discuss how much feels fair for you each to get every month.

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How does Emily Do It?

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My husband and I got married right out of college (graduated in May 2012, married in August) so we didn’t have a ton of assets, and all things considered, not a huge amount of debt either (roughly $30k in student loans). Both of our parents have joint accounts, so we did what many young adults do and did what we learned. Thankfully, that’s worked out well for us! We’ve been using zero-based budgeting since 2018 and love it. We’re able to see all our expenses together (I’m definitely the primary budgeter, but my husband looks every once in a while!), and we each have our own spending money categories that we can spend or save as we want. Having everything together helps us see everything as a team.

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If we had gotten married in our later 20s or 30s or after we’d been adulting individually for a while, we may have taken a different path. I think we still would have eventually settled on joint accounts, but we might have taken some time to get there!

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A Few Extra “Money for Couples” Notes

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Pre-nups – If you aren’t married yet, consider getting a pre-nup. I know they seem unromantic and like you’re betting on your marriage failing…but think about it this way instead. Most of us agree that we should have homeowner’s or renter’s insurance…but we sure hope we never have to use it! Same thing with term life insurance—many people agree it’s a very smart idea to have it, but I don’t know anyone who’s excited about the idea of having to use it! A pre-nup is kind of like marriage insurance. It’s there to protect you both in case the worst happens. Wouldn’t you rather have divided things up when you were in love and wanted the best for each other, rather than when things have gone poorly?

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How often should we talk about money? – If you aren’t used to talking about money at all, ease into things. Try setting up a weekly money date at a time that you’re both generally in a good mood. Have snacks, have a glass of wine if that’s something you enjoy, light candles if you’re into that…make it a fun time! Start with some fun, light topics like “if you had $1 million that you have to SPEND (not save, not invest, not pay off debt), what would you buy?” or “what do you want retirement to look like?” Then start getting to the point of looking at your budget together each week, checking in on where things are at, making sure you’re both aware of where things are and what you need to adjust for the next week.

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How do I get my partner on board with MyBudgetCoach? – Not everyone has to be equally involved with MyBudgetCoach! That being said…one of the most effective ways to show your partner the value of planning is to fund something that’s important to them. Does your partner like to garden? Set aside money and buy them that cool tool that they’ve been talking about. Are they very practical? Show them how you’ve already got money set aside for new tires when you need them.  Did they recently get into Lego Botanicals? Set money aside to buy them that new set as soon as it’s released (anyone else stoked about the new Hibiscus?! It’s so pretty!!!!).