Thanks to the amazing people at Quicken Loans, I am back to being a working girl! After just over a year off (finishing my master’s degree and caring for Baby), it feels so good to be back in the workforce, earning paychecks. Now that I have an income again, my husband and I need to sit down and figure out how we are going to split the bills. He has been a champ and skipped a few purchases to keep us all housed and fed. While part of me wants to contribute to the economy by shopping for a new wardrobe (c’mon, I need it for work!), I actually want to take on my share of the household expenses. But what’s my share?
Many people who cohabitate, be they couples or roommates, have trouble deciding the best way to split the bills. Should they be split equally? According to income? Can some portion be traded for housework? Different methods work for different situations. Here are some strategies that could work to help you split your bills fairly:
It’s as simple as it sounds. Everything is split right down the middle. In an ideal world, the people who opt for this method earn equal salaries and use an equal amount of the home’s resources, i.e. groceries, utilities, living space. Roommates often choose this option in an effort to keep things uncomplicated. You might even want to use Splitwise, which is a website (and app) designed to help roommates divide their bills.
Again, the concept is pretty simple. In most relationships, one person earns more than the other. Say person number one makes 60 percent of the total household income. Person number one then pays 60 percent of the total household bills. If you’re moving into a new home together, it might be tempting to go for a more expensive place if one person makes a much higher salary. Don’t add to the pressures that already exist when sharing a living space – get a place everyone can afford, so one person doesn’t grow resentful for “carrying” the other.
This is another popular choice for a roommate situation. Sometimes one bedroom is larger, or has an en suite bathroom or a walk-in closet. It seems fair that the person who gets to enjoy the extra amenities should pay a bit more for them. A person who wants to keep the heat cranked in the winter and the a/c in the summer definitely earns responsibility for that bill.
This is the method my husband and I have employed thus far. Whoever has the money to pay the bill at that time (usually my husband) pays it. The big bills have traditionally fallen to him (as the breadwinner) and some of the smaller ones have ended up with me. I covered some daily expenses for the baby or picked up a thing or two at the store, when I was able. It didn’t really matter to us who paid what, since at the end of the month we were both nearly penniless.
In an effort to try to make our living situation feel more even-steven, I really upped my contribution in the housework department. I pretty much took over all household chores. Perhaps negotiating a lower contribution to the money pot by doing more around the house could work in your situation, too.
Don’t forget to talk about bills accrued before you started living together, like credit cards, student loans, or even child support. Are they still the sole responsibility of the debtor, or will they go into the shared pool?
And, couples, while you’re at it, decide whether you’ll keep your own bank accounts, have a joint account, or both. Will you have a joint savings account for retirement or vacations? Different options work better for different people. Some like the freedom and privacy of having their own accounts, and some like the ability to see where all the money is going.
The important thing to remember as you decide how to handle your living expenses is that situations change. One of you may have your salary decreased or you may lose your job altogether. One of you may gain an extra bill outside the current expenses – like a sizable medical bill. Have a plan in place for how these situations will be handled if they arise.
Financial discussions are often stressful, but are always necessary. Money can really strain a relationship when someone feels taken advantage of. Make sure all your cards are on the table and be open and honest with the other person. Don’t jeopardize a relationship over a squabble about the utility bill.
How do you split your bills? Are you happy with your decision? What problems have you faced?