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Combining finances with your spouse or residential partner is a difficult decision for most. However, there are rational ways you can split household expenses without differences or disagreements.

How to Share Household Expenses

Whether you are living with your partner, spouse or roommate, sharing household expenses becomes paramount at one point or the other. This is especially true for two-income households where both partners are gainfully employed.

While it is the logical thing to do, sharing household expenses can prove challenging. You’d have to reach a common ground or be on the same page for this to happen. If you and your partner can’t agree with your combined efforts, you can rely on these tips to help you out.

Decide the Household Expenses to be Shared

 First and foremost, you have to decide the household expenses that need sharing. This typically includes rent, utilities, groceries and pet care. You and your partner must come together to determine these factors. Sit and discuss what needs to be covered and what is negligible.

 Identify the core parts of the household that warrant a split budget and work out the figures relative to your income. And don’t forget to include emergency expenses to tackle unforeseen circumstances. Set aside a substantial sum for emergencies.

Set a Contribution Percentage

Once you’ve worked out the expenses to be shared, the next thing is to set a contribution percentage for each person. There are several methods you can adopt to accomplish this:

  1. Equal Splitting

Splitting the bills equally is a common approach undertaken by couples and residential partners. With this method, all parties involved submit the same amount to the household budget. However, this approach only works optimally when you and your partner are earning the same or similar income. Otherwise, you will run into trust and accountability issues.

  1. Income-based Splitting

Dividing household expenses based on income suffice for households where partners earn different incomes. Here, the bills are divided proportionally to conform to each person’s income margin. The person earning higher will take on the bulk of the bills while the one with lower income will tackle expenses they can afford. The approach is considerate, practical, fair and effective. It can also be adjusted once the income dynamics change. On the downside, partners may find it difficult to agree on a fair percentage.

  1. Expense Splitting Based on Individual Usage

 You can also share household expenses based on individual needs and usage. For instance, if you use the internet but your spouse doesn’t, you will be responsible for internet bills. Or if your roommate needs a home service pet sitter for their pet (which has nothing to do with you), they will bear the financial burden. This is another easy way to divide expenses as it ensures fairness. You can also integrate this approach when sharing bills based on income or equally.

  1. Combined Approaches

You can incorporate all the above-mentioned methods to reach a common ground with your partner. You can share expenses in a 50-50 ratio where each person pays for their individual expenses. And if you are splitting based on income, all parties should pay for their individual usage rather than assign the expense to the person with the highest income.

 For instance, if your partner earns more money than you do but you use a house service hairdresser (and they don’t ), you shouldn’t expect them to foot the bill. Rather, you have to work out a reasonable percentage that is tailored to your income and personal usage.

  1. Use a Separate Checking Account

It is wise to use a separate checking account dedicated to household expenses. The account should bear your signatures and set a date for deposits to cover monthly household expenses. However, you are at liberty to decide the time frame for deposits — it doesn’t have to be monthly.

 A dedicated account makes tracking and accountability easier. You will know who paid for what and when. Your finances won’t get mixed up as well and you wouldn’t have to drain your credit card or dip into your savings to cover the shared bills.

  1. Separate Individual Expenses from Household Bills

When discussing shared expenses with your partner, you should distinguish personal needs from household specifics. Each person should pay for their car, car insurance, medical bills, clothes, haircuts and other personal care items. Groceries, rent and shared utilities such as electricity and water bills belong to shared expenses.

Also, hired services dedicated to the care of the home such as home service housekeepers fall under shared expenses. As earlier mentioned, a set emergency fund for household use is imperative. If you buy takeout meals to eat alone or with your friends, you should foot the bill from your account. You can only take from the shared expenses account if you and your partner partake in the meal.

  1. Be open about your Income

Money is at the heart of shared household expenses. Hence, you can’t reach a conclusive decision if you withhold your financial information. Don’t be forced to compromise when it is not beneficial to your finances. Do not lie to cheat your partner.

And don’t take on more than you can chew. You and your partner should be honest and transparent. It is okay if you can’t reach a decisive agreement — sharing doesn’t work for everyone. So if you give it a try and it doesn’t work, stick to what works for you both.

In a Nutshell

There are several approaches to sharing household expenses but each has its pros and cons. Hence, it is imperative to stick to an agreeable method that works for all parties involved and the household. You should also note that effective communication and organisation are the key determinants of a healthy sharing relationship. So whatever approach you choose, have open and honest discussions to avoid disputes, misunderstandings and unfair percentages. Share for the good of the house and its inhabitants!

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