Corinne and I have lived together since July and we share a majority of the bills including internet, water, gas, and car insurance. A problem a lot of couples run into when they’re trying to figure out their bills is who should pay for what?
It’s easiest to split the costs 50/50, but if each person has a different income amount this can cause some dreaded relationship tension. One person will have to pay a larger percentage of their paycheck, while the other person will then be able to pocket more cash every month.
After a little research, we realized that paying a percentage of the bills based on our income amounts worked best for our situation.
Here’s an example of the formula we use to split our bills so that no one’s feelings get hurt and every one’s paychecks are treated fairly.
Meet Ron & Alicia
For the example, we have Ron who makes $3,000 per month and Alicia who makes $2,500 per month.
Their monthly bills that they split cost $1,000.
To figure out who should pay for what, take each person’s income and divide it by the combined monthly income.
Here’s how Alicia and Ron’s percentages would look:
[Alicia's Monthly Income] / [Combined monthly income] = % of bills Alicia pays
$2,500 / $5,500 = 45%
[Ron's Monthly Income] / [Combined monthly income] = % of bills Ron pays
$3,000 / $5,500 = 55%
Now, every month Alicia will pay $450 of the bills, and Ron will pay the remaining $550.
Do What Works For You & Your Partner
This formula works well for us because we both have a similar job – English teacher – that requires a similar amount of work and hours. The difference in our paychecks doesn’t reflect any increase in workload or skill, so we both feel comfortable using the percentage formula.
On the flip side, if I was only working 5 hours a week, I would feel like I wasn’t holding my own. I’d expect Corinne to speak up about having to pay a larger percentage of the bills, while also doing a lot more work.
This formula also works well for us because we’re dating, maintain separate bank accounts, and don’t share our money. If you’re married, engaged, or extremely committed then splitting bills 50/50 may work well for your relationship.
This formula may not work for your family situation, but if you consistently find yourself frustrated at a confusing bill situation, then the percentage formula may just work for you.
Have you tried this method in your relationship? How do you and your partner handle bills?
Photo: karpov the wrecked train
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Nice thread! Yeah, I think that formula works best too, my boyfriend is a proponent for the 50/50 split though.
We haven’t moved in together yet, but currently split things roughly 50.50 right now.
.-= youngandthrifty´s last blog ..Negotiating with Rogers Wireless- Head to Head Battle! =-.
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Austin Reply:
February 26th, 2010 at 8:55 am
Interesting. Does this cause any problems or does it work for your situation? Not living together has to help this a bit, too.
Thanks for the comment!
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youngandthrifty Reply:
March 1st, 2010 at 4:19 pm
I think it works generally for our situation. I offer to split it equitably (like the formula that you use) but he likes it 50.50 for now for simplicity’s sake. We’ll see how it goes for when we move in together!
hehe I make more than him right now, so I’m not complaining. =)
.-= youngandthrifty´s last blog ..If You Had a Million Dollars… =-.
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I think you hit on the best and most fair solution. I honestly can’t think of a better way to handle an equitable split. Thanks for sharing!
.-= David @ MBA briefs´s last blog ..Do mass firings improve performance? =-.
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Your solution definitely seems the fairest. What are your thoughts when one of the people is self employed? I bring this up because of there are usually more fluctuations in income and more business expenses for that person as well.
.-= Evolution Of Wealth´s last blog ..Pricing Your Disability Insurance =-.
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Austin Reply:
March 1st, 2010 at 12:18 pm
There would be pros and cons w/ trying to do this formula with 1 self-employed member.
Perhaps, they don’t drive as often so they wouldn’t spend nearly as much on gas, but they may need to fly places for conferences. Also, the internet is probably tax deductible so that helps the couple.
The most important thing is to test it out for 2-3 months and evaluate. How do both sides feel about the % split? Do they worry about it or does it seem fair? If it needs work, adjust and re-evaluate again.
Same question to you: how do you think people who are self-employed should use this formula?
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I make more money than the wife, but we do it 50/50. I think the most important thing is to actually make a plan:
http://www.myjourneytomillions.com/articles/the-wife-and-i-finally-implement-a-plan/
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Austin Reply:
March 1st, 2010 at 12:19 pm
No one’s ever complained because there was too much preparation or communication.
I liked your map. I need to make one of those for a future post and to help keep the money organized.
Thanks, Evan.
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If you’ve managed to reach a financial consensus with your partner, my hat goes off to you. I rarely can so much as go on a date without my girlfriend giving me the evil eye. “I’ll pay half” she says when she orders that $17 steak and I eat the $3 hash browns; but “Let’s buy our own food” when her bill comes in a penny less than mine…
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Austin Reply:
March 2nd, 2010 at 1:04 pm
How long have you guys been dating? I’d bring it up if you can. It may not seem like a big deal, but it could escalate into something a lot bigger that could potentially hurt your relationship.
I’m a firm believer that a couple need to have similar money values. If my gf had credit card debt or excessively spent I don’t think we could be together.
Thanks for the comment!
.-= Austin´s last blog ..A Guide to Traveling Internationally with Credit Cards =-.
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