I live with my partner, and with the countless other scary (and ultimately rewarding) adult things I had to face before shacking up, we had to figure out a way to deal with shared expenses and money.
There are many different theories around sharing expenses.
- Splitting everything completely 50-50 for all shared costs such as housing, food, utilities, any shared cars, pets, etc
- Splitting everything in proportion to your salary (regardless of gender). Gail Vaz Oxlade gives a great example.
- Splitting responsibility for different bills. For example, you only pay rent, while your partner only pays for food, utilities, etc.
Naturally, there are also may hybrid solutions as well.
In my 10 month cohabitation experience, I would advise people to start talking about money honestly, fairly, early and regularly.
Yes, people have a lot of gender norms, ego and expectations wrapped up in money. These may be obvious or very subtle.
Money is not everything, but if you want to live and love your partner for more than a month, just get the money talk out in the open, and make a point of revisiting on a regular basis- every month when the rent is due, or every two weeks when you get paid, etc.
The solution that works for my partner and me is a combination of the above:
- We split most shared expenses; food, utilities, eating out, drinks, entertainment
- I take a slightly larger piece of the rent, and am willing to go even higher, since I work full time
- We do not have a joint account
- We each pay for our own things, debt, and savings, at the pace we want.
With an old school twist:
We write everything down in a notebook.
In this example, groceries were $30 and internet was $40.
We write all of our shared costs in our book and divide it by two, with the positive number for the person who paid for the item and the negative amount for the person who ‘owes’ that amount. There is a description to see where our money went and how much money we spent on food, utilities, entertainment, etc. It was his really clever idea and we have been using it with no issues since December 2012.
At the end of the month we go through it to see if anyone is owed money, and to check on where our money went. It’s very effective to see our monthly expenses as a snapshot. We can explain anomalies due to emergencies or unexpected situations and also plan for next month. You can also flip the pages back in time to see how much was spent in the past.
It is simple, effective, low cost, no tech, and we do a great job of reminding each other to ‘put it in the book’ every time we buy something. So far we haven’t had to have a conversation about spending too much money on things that were not agreed upon, but I can see that being an issue for some folks.
I would strongly recommend the notebook method!
Even if you live with roommates the same principles can be applied. Possibly with less heart drawings in the margins.
If you live with a partner or roommates how do you manage to split expenses?