How to Split Your Bills Fairly

How to Split Your Bills Fairly - Quicken Loans Zing Blog 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:

50/50

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.

Income-Based

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.

Usage-Based

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.

Totally Random

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?

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4 Responses to How to Split Your Bills Fairly

  1. Hope C. August 20, 2012 at 9:53 am #

    My husband and I use the “one pot” method. Both our incomes go into one pot and all the bills get paid from there. This is not the same as splitting down the middle since both incomes are combined as one. It is not a “this is mine” and “this is yours” household. We have a partnership which is not the same as being roommates and one of us getting the smaller bedroom. We each get a weekly “allowance” to use as we wish – no questions asked. For larger personal purchases we discuss it with one another. We do this not because either of us needs to ask permission but because we respect one another and believe in the partnership.

  2. Amy September 19, 2013 at 8:24 pm #

    Great article. I agree, different methods work for different situations. So far my spouse and I have done the “totally random” method since we were also were pretty much broke at the end of each month. However, he decided to go back to school after the 2008 crash, and accrued over $70,000 in student loans. Graduation has passed and so has the grace period for which he hasn’t owed banks yet. Now, we’ve come to a place where things will shift heavily in our budget and I’m not sure what to do. I almost feel that now is a time where we should start splitting bills, but the discussion is getting touchy. We make roughly the same amount, but my fear is that I get so buried under half his loans, I won’t have much personal income or can make any investments for many years. Part of me stresses as well because I do most of the household work. Maybe it’s a good idea to bring up splitting the housework more evenly to align with the debt? I would appreciate any kind of feedback and tips. Thanks so much!

  3. Shannon Martin September 20, 2013 at 2:41 pm #

    Hi, Amy. Thanks for reaching out!

    Things have changed in our household as well. We’re expecting baby number two, and a huge increase in daycare costs to go with her! We also just replaced a car, so now we have two payments. We both have seemingly insurmountable student loan debt, and right now, a sewer line that may need digging up. Wahoo!

    My husband and I had a series of talks about how to handle all these new expenses. Some of them were easier than others… We’ll each be paying for one of the kids’ daycare, we’re each taking a car payment, he takes the mortgage, and I get the rest of the household bills.

    We’re each in charge of paying our own student loans, although I can see an argument where going back to school benefits both people in the relationship (ideally, anyway, through a better paycheck – even if not right away), so it could be seen as a joint expense. My husband is actually repaying his loans now, whereas mine are currently in forbearance.

    There are many options available to people who will struggle to pay their student loans, some easier to qualify for than others. A good place to start is http://www.direct.ed.gov/postpone.html. I just spoke to someone a couple weeks ago because my forbearance for this past year had expired. The woman was extremely helpful (and friendly to boot!) and let me know of another program I qualified for that would extend my available forbearance time. For me, the goal is to get our older child out of daycare and into public school, then I’ll be able to take that tuition money and apply it to my student loans. Two more years! I can do it! Do keep in mind that interest still accrues while your loan is in forbearance, so you may want to go for a deferment if you qualify.

    In our situation, my husband does earn a higher salary than I do, and at the end of the month, I’ll be out of money, while he may have some left. He’s not stingy with it and doesn’t see it as “his” per se, but it is something I feel as the one with nothing left. But, I agreed to this arrangement because it works for us; I’d rather bring a bagged lunch to work than argue over whose money is whose. There is so much more to us and our relationship than money. And, in the end, I know if I just have to have that new pair of shoes, and my account is empty, I can smile sweetly at my husband, say please, and get shopping.

    I hope this helps. Talking about money issues is never fun, but it is absolutely necessary. You need to figure out what you’re ok with, lay out a proposed plan, and work toward that goal. Be patient, not confrontational, and choose your timing well. And remember, in any relationship, the ability to compromise (on both your parts) is key to success. Good luck!

Trackbacks/Pingbacks

  1. How to Split Expenses with a Roommate « Better Human - March 3, 2012

    [...] Splitting down the middle: This is by far the easiest way to split expenses, but as I’ve mentioned above, it’s not always the best. I wouldn’t be happy paying the same amount for a small bedroom and shared bath as someone who gets a master suite and adjoining washroom all to himself. I think the only person who would agree to that situation is the one who gets it all for a low price. It’s like the guy who orders a filet mignon when everyone else is getting appetizers, but he wants to split the bill down the middle. It just doesn’t work that way. Sorry, guy. [...]

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