Couples and Money – Splitting the Bills

Alright, so now we’ve managed to turn your mass of individual accounts into joint accounts (with a few individual accounts left over, just in case). Already, things should be looking much easy to manage for the two of you.

Still, though, there’s a lot of other issues to handle. Those bills that keep coming in, for example; you need to figure out who is paying those. Depending on how you met and became a couple, you might have a new set of bills to handle, might take up one person’s living arrangements to split them, or have two households and two sets of bills to pay. How should you handle paying those bills as a couple?

Ways to Split Your Bills

There are a few different ways you can approach splitting your bills. As with most approaches to money, there are pros and cons to each; which one will work best for you and your significant other will depend on how you interact and currently are organized in your household.  Just to help you choose, I’ve given some thoughts about which types of couples would benefit most from each type of splitting, just to keep you thinking.

Option 1 – Each Person Pay Their Own Bills: This is pretty easy; you split the bills according to who owes what. I pay for my phone bill, you pay for your internet action, and most other bills are either yours or mine.

Pros: Pretty basic; you divide your bills into piles of yours and mine. Assuming your couple has no trouble deciding which bills go into which pile, there’s not too much difficulty in making the plan work.

Cons: Deciding which bills go in which pile doesn’t always come easy; assume you are living in the same house and using the same utilities, it’s hard to say that one person should pay one bill while the other should pay another one. If you try to split the bills equally, it can also prove difficult for the lower earning member of the couple.

Best For: Couples that live apart; if you have two separate living places, it’s easiest to decide who pays which bill. As you start to live together and combine your accounts, though, you’ll need to look into another arrangement, such as:

Option 2 – Pay the Bills Out of a Combined Account: Alright, so each person trying to pay their own set of bills doesn’t quite work. Maybe you should simply combine all the bills, and pay them off from a single combined account. That will save the troubles of trying to split the bills into piles and make everything work out, right?

Pros: This does simplify things; having only one account from which all of your bills are paid makes it simpler to handle the bills. Assuming you are a truly involved couple, it also makes sense to start combining your accounts anyway, and choosing one account as the designated bill account is pretty solid.

Cons: There is the issue of who contributes more to the joint account. If there is one member who puts most of their money in the joint account while another keeps their money in an individual account, it can end up being rather unfair.

Best For: When one partner earns far more than the other. If one person is bringing in a great amount, while another earns much less (or perhaps nothing, as a housewife (or househusband)), then having the higher earner provide most (or all) of the money to the joint, bill-paying account makes the most sense. A side note: making sure that the much lower earning member has at least some spending money of their own, is definitely a good move. (At least, until the lower earner creates a highly successful blog and starts bringing in a five or six figure income.)

Option 3 – Each Member of the Couple Contributes an Equal Portion to the Joint Account: Alright, so if both members of the couple contribute to the joint account, then trying to give the same amount to the account leaves the lower earner with a much lower amount left. Instead, it’s probably better to have the higher earner contribute a higher amount, even if both people are earning enough to make contributing worthwhile.  How much higher? Well, one possibility is to have each person give the same percentage (as recommended by Suze Orman); that leaves the higher earner with a higher amount of money while the lower earner has a lower amount. Another possibility is to have each member of the couple give enough to leave the same amount of personal money for each individual. Which method to choose will depend on your personal couple; the former is more likely to be acceptable to higher earners, although the latter is possibly more ‘fair’.

Pros: Well, this is probably the fairest way to make paying bills work for a couple. Either of the two methods described above should make bill paying work for a couple, while staying fair.

Cons: This one gets a bit complex, as you need to look at how much each person earns, how much the total amount of the bills are, and what portion of the total earnings will pay off the bills (hopefully, less than total amount of the earnings). Once the math is taken care of, it becomes pretty simple to figure out.

Best For: Two people earning reasonable incomes while living in the same household. For most modern couples, with two working members, this is probably the most likely method to divide things up fairly. Just make sure that whichever method of dividing up the costs works for both members, otherwise things are going to get troublesome.

A Final Note or Two

Obviously, there are plenty of variations on these methods that you could use, to say nothing of some combination of two or three of them. The most important thing to keep in mind is that you need to talk to your partner and come to some agreement on how to meet all of your bills and other expenses. As long as you talk and come to some arrangement, regardless of what that particular arrangement is, you’ll be in good shape as a couple.

Also, while we’ve been talking about bills, it’s important to consider other household expenses in the same manner.  You should make sure each member of the couple contributes to a retirement fund, for example, and adding to a ‘fun fund’, for going on vacations or other goals.  Whether you delegate the tasks to each person, take the money from a combined fund, or each contribute a proportionate amount, you should make sure to shoot for your goals as a couple.

How to you split the bills with your partner? Is there any particular method you recommend to most other couples? How much affect do you think the comparative earnings of each person should determine their contributions?

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