Creating and sticking to a budget for yourself takes practice and commitment (though using Expenses makes it easier!). But when you start splitting bills with a spouse or a partner, there’s a whole new level of complication to the process.
It’s not surprising that, according to Money Magazine, 70% of married couples say they argue about money more often than anything else. Finances can be stressful, and the stakes are even higher when sharing expenses with someone else.
Whether you’re in a new relationship or have spent years with your one-and-only, it pays to invest in the process of building and maintaining a budget together. Here are a few ways to approach sharing expenses—and to make it feel more like holding hands than crossing swords.
Budgeting for couples: start the conversation
Every relationship goes through various stages of intimacy—and how your finances intersect will shift too. By talking about shared expenses and splitting bills early on, you can help set the stage for an open and collaborative approach to shared finances over the long haul.
Whatever stage of a relationship you’re in, here are a few things you might want to talk about:
- Just dating: Develop a shared understanding of how you want to split the bill in your relationship. Who pays for what when you go out? If you want to go to a more expensive event than usual (like a big concert or day at a theme park), how will you each save up for it? How much do you expect each other to spend on gifts?
- Moving in together: You’re going to be sharing some fundamental necessities, so get clear on what you expect from each other. What can you both truly afford for rent and utilities? How much are you comfortable spending on things like groceries and entertainment—and what will you do if your needs differ? What do each of you consider a shared expense versus a personal one?
- Making a long-term commitment: Whether you’re getting married, buying a house, or having a kid, your financial lives are going to be entwined for a long time. How much do you each expect to spend on the really big stuff? How much debt do you each have, and who is responsible for paying it off? What are your career and education plans, and how will those affect your shared finances?
- As life goes on: If you’re in a long-term relationship, your shared financial needs will evolve, as will the discussions you need to have. How much are you each saving for retirement, and when do you expect to need that money? How much of an emergency fund do you need to feel secure? What savings goals matter most to you?
Whether your relationship’s path follows a first-kiss-to-golden-anniversary trajectory or meanders through various forms of commitment, it’s inevitable that your financial lives will overlap to some degree. And in every kind of relationship—short-term or long-term, monogamous or poly, cohabitating or long-distance—everyone benefits from open and honest conversations about shared expenses. For tips on having those necessary money talks, take a look at this blog post.
How to split bills in a relationship: define your expense categories
Understanding each other’s financial needs and goals will help you get on the same page about how you’ll approach managing money as a couple. From there, you’ll want to get into the nitty gritty: exactly what expenses you’ll share.
Start by listing out all the necessities you both need. If you live together, that will include things like rent, utilities, groceries, transportation, any shared debts, expenses for pets or kids. Figure out how much you need for each expense every month.
Next, take a look at the discretionary (aka, not strictly mandatory) spending you share. This might be streaming subscriptions, dining out, date nights, going to the movies or other kinds of entertainment, gym memberships, buying books/clothes/games/whatever floats your boat. Agree on how much you’re willing to budget for these categories.
Finally, consider if there are any individual expenses that you want to share. Student loan debt, car payments, medical expenses, costs for hobbies, personal care services—there are many things that might make sense to share the cost of, depending on your situation.
Cutting the pie: how to divvy up responsibility
Once you know exactly which expenses you’ll share, you’ll want to talk about how much each person is responsible for. There are many ways to slice this; what matters is that you both agree on something that feels fair. A few possible approaches:
- The 50/50 split: Each person contributes half the cost of every shared expense—a simple and straightforward option. This works well if your incomes are similar and if you’re able to have a regular budgeting session to work out what you owe.
- The income-based percentage: Each person pays for a percent of expenses based on their comparative income. For instance, if you make 20% more than your partner, you cover 20% more of your shared expenses than they do. This can be a helpful approach if one person makes a lot more than the other (for instance, if one of you is a student).
- The category split: Each person is responsible for certain specific expenses (e.g., you pay the water bill and gym memberships, while your partner covers the car payment and Netflix). In this approach, the ease of dividing the chore of paying bills outweighs the concern about splitting things evenly to the penny.
Keep in mind that however you split the bills now, your approach will likely change over time. The twists and turns of life—having a kid, going back to school, starting a business, experiencing a long illness, caring for an aging relative—mean you’ll want to revisit what approach to sharing expenses works for you.
Budgeting for yours, mine, and ours
Now it’s time to get hands-on and build a shared budget. All those steps above might seem like a lot of work, but they lay the groundwork for successfully setting up a budget that you can stick to as a couple—and avoid big blow-outs when things don’t go as planned.
If you’re not quite ready to open a joint checking account, you can set up a spreadsheet or use an online budgeting app to create a budget for the two of you, then manually transfer money between your individual accounts to pay bills as needed.
For a lot of couples, though, opening a Shared Account makes sense: it makes pooling money and paying for your shared expenses easy. With a Simple Shared Account, you each have your own individual account (to keep “your money” and “my money” separate), plus a joint account for “our money”—where you can create a shared budget right in your Simple app.
Once you and your partner open a Shared Account, just use Expenses to plan for every item you’ve agreed to share the cost of. This guide walks you through the process step-by-step; once you set up your budget, funding and spending from your Expenses happens automatically.
One thing you’ll want to consider is how to put funds into your Shared Account. You have a few options:
- Set up Direct Deposit. You can either have your paycheck deposited directly into your Shared Account, or you can ask your employer to divide your paycheck between your individual and Shared Accounts. (Here are instructions for setting up Direct Deposit.)
- Manually transfer money. You can instantly transfer funds from your individual account to your Shared Account (here’s how). You’ll both want to create an automated reminder to transfer funds each month!
- Deposit paper checks. You can use Photo Check Deposit to submit checks directly into your Shared Account through your Simple app (or you can deposit them by mail).
- Move money from your other bank accounts. Once you link an external account with your individual Simple Account, you can transfer in money from that account—then move it into your Shared Account. (Your partner won’t be able to see your linked account or make transfers).
Budget for life—together
When you take a positive and proactive approach to managing money together, you can turn splitting bills from fraught to fun, at whatever stage you are in your relationship (and instead of arguing about money, you can argue about something more entertaining, like whether Die Hard is a Christmas movie).
Of course, you don’t have to be in a romantic relationship to get smart about how you handle shared expenses. Roomates, co-parents, and relatives—anyone whose financial lives have a lot of overlap—benefit from these same kinds of money conversations and collaborative approach to managing finances.
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