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Many people who cohabitate, be they roommates or in a relationship, have trouble deciding the best way to split household bills. Should bills be split equally? According to income? Can some portion be traded for housework? Different methods work for different situations and different people.

What Does It Mean to Split the Bills?

This is the big question here, and it can’t really be answered with one quick sentence. At its most basic level, splitting the bills is about dividing the joint expenses of a living situation between those who live there. This could be roommates sharing an apartment and splitting the rent and utilities, or it could be a couple splitting groceries, the mortgage and other household expenses.

What it means exactly to split your bills with the person or people you live with will be different, so here are some different strategies divided by situation that could work for you. Take a look!

Options for Roommates

How you decide to split the bills as roommates will be different than other situations. Most of the time you likely don’t have joint bank accounts and don’t own the property together. This distinction means that each of you are responsible for your own expenses, without any overlap. The method you choose to divide the bills should reflect that.

50/50

This one is as simple as it sounds. Everything is split right down the middle, or equally between the number of roommates. In an ideal world, the people who opt for this method earn generally equal salaries and use an equal amount of the home’s resources, i.e. groceries, utilities and living space.

Roommates often choose this method in an effort to keep things as uncomplicated as possible. Just make sure each of you are keeping track of what you’re paying for and when, to ensure things don’t get messy later. An online calculator or an app such as Splitwise can help you with this process.

Usage-Based

This is another popular choice for roommates. Sometimes one bedroom is larger, or has an en-suite bathroom or walk-in closet. To some, it seems fairer to have the person who gets to enjoy the extra amenities pay a bit more for them. A person who wants to keep the heat cranked up in the winter and blasts the A/C in the summer would then earn responsibility for that bill.

The important thing is to have a clear conversation about who should cover what under this method, and not to leave it till the bills are due. Each roommate may have a different view on ‘usage,’ so talking early and setting clear standards can help to avoid any clashes later on.

And Remember…

It’s important to be upfront, no matter the method you decide on. Have a sit-down with your roommate or roommates early and discuss how you all want to handle the shared bills. It’s a good idea to write up a “Roommate Agreement” that you can all look back on later to ensure that things are being handled fairly.

There is no perfect method for every situation, so just make sure that you’re all working toward an agreement that makes everyone feel equal.

After you’ve decided on a method, consider putting together a spreadsheet of shared expenses. This will make utilizing either of the two methods much easier and will also allow you to see any change in your bills over time. You may be spending a lot more money on your utilities but not realize it, since changes can happen gradually. A shared Google Sheet could help you see this as it happens.

Options for Spouses/Partners

Being partnered makes most situations a little different, and finding the right way to split the bills is no exception. The main similarity between roommates and spouses is the need for upfront communication, but sharing property and bank accounts can add another layer of complication.

Before you decide on a way to split the bills, you should settle on how you both want to organize your money. Will you keep your own personal bank accounts, move everything to joint accounts or do both?

Different options work better for different people. Some like the freedom and privacy of having their own accounts, and others like the ability to see where all the money is going.  Knowing this upfront will make choosing the right setup easier.

Totally Random

Also called the ‘grab bag method,’ this one involves a lot less structure then the other methods. Whoever has the money to pay the bill at the time, pays it. This can work best for couples who either have shared bank accounts or are at similar income level, but it’s a hard method to keep track of and can create tension later on if anyone feels like they are paying more than their share.

Income-Based

In many relationships, one person earns more than the other. Say Person A makes 60% of the total household income. Under this system, Person A will then pay 60% of the household bills.

How do you calculate the percentage of household income? Add up the incomes of both individuals and then divide the largest income by that number. For simplicity’s sake, let’s say that Person A makes $60,000 and Person B makes $40,000. Together, that adds up to $100,000. $60,000 divided by $100,000 is .60, or 60%. So, Person A makes 60% of the household income, and Person B makes 40% (100%-60%).

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 can already exist when sharing a living space – get a place that both of you can afford, so one person isn’t responsible for the majority of the bills.

And Remember…

An important factor to consider when you decide how to handle your living expenses is that situations change. One of you may have a salary decrease or lose a 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 you’ll handle these situations if they arise.

Financial discussions can be stressful, but they’re always necessary. Money can really strain a relationship, especially if someone feels they’re being taken advantage of. Make sure all your proverbial cards are on the table, and be open and honest with the other person, whether they’re your roommate or partner. Don’t jeopardize a relationship over a squabble about the utility bill.

How do you split your bills? Do you use a method that wasn’t mentioned here? Are you happy with your decision? Let us know in the comments!

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This Post Has 8 Comments

  1. I appreciate and read alot of information on the Quicken emails I receive. Thank for for so many different topics, yet all regarding smart money ideas and managing what little we all have these days! Lol

  2. Hi, I like this article. Thanks for posting.

    Do you (or anyone else reading this) know of any apps that allow expenses to be split based on income earnt?

    Basically something that will split all income equally, and then split all expenses (on things for the family, not personal expenses) equally too.

    I think lots of people would benefit from such an app.

    Thanks

  3. 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!

    1. 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!

  4. 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.

    1. This is awesome; and what my parents have done for 55 years. I sure was in for a shock when my new husband hated the idea. We’d been together for 5 years so he thought things would stay that way. I feel like his roommate. Yes I’ve told him. No, he doesn’t care. We settled on 60/40 – although 70/30 seems more fair to me based on our incomes.

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