Splitting finances with your significant other can be terrifying. How do you do it?! How do you even bring it up?! Money is immediately a factor when starting a relationship whether we realize it or not. While you might not talk about the interest rate on your student loans on a first date, you might be wondering who is going to pay for the bill. Is it appropriate to assume old school traditions where the guy would always pay? Do you split 50/50? Should you have an un-sexy discussion about it?
Every relationship is different. We all have different money personalities, our incomes differ, and many other dynamics come into play. What worked for JR and me might not work for others. What’s most important is finding a common ground that works for both you and your SO.
Splitting Finances When You Just Start out Dating
If you’re old school and you believe a man should pay on the first date. Great, do that. If you are more progressive and believe things should be split 50/50. I support that too. My advice is to not go broke just to impress someone. If you’re strapped for cash, find alternative date ideas that are either free or are inexpensive.
Suggestions:
- Whoever suggests the date is the one that pays
- Alternate who pays each time you go out
- Split the bill 50/50
In our first year of dating, JR and I opted for the whoever suggests the date pays is the one who pays. I had less discretionary income to spend and couldn’t afford to go out and do things as much as I wanted. This was the most fair as far as affordability for us in the beginning. As time went on and things started to even out, we started splitting things 50/50. Specifically, dining out and entertainment.
Splitting Finances When You Decide to Live Together
This one can be tough. You’re technically sharing everything, but does that mean it should be split 50/50? Is that fair when incomes are disproportionate? Do you keep your finances separate or should you begin merging finances where appropriate?
Suggestions:
- Share expenses based on income ratio’s. If person A makes $60,000 a year and person B makes $40,000, then expenses should be split 60/40.
- Split things 50/50: maybe it makes sense for things to be split right down the middle
- If one significant other brings home the bacon, maybe the other helps contribute through household chores.
What it ultimately comes down to is finding the right balance for your own relationship. Personally, I would opt for the income ratio as a way of splitting expenses. It’s fair as far as the numbers go and no one needs compromise financial goals.
At this point in our relationship, JR and I decided to open a separate checking accounting specifically for groceries and our dog. These were the two items that we were frequently splitting the expense of and it became too complicated to pay each other back on a weekly basis. It was a good entry point for us comingling funds.
Splitting Finances When You’re Engaged
You’ve decided to fully commit to one another! Now is a great opportunity to start talking money if you haven’t already. Get naked financially. Share your credit scores, tell each other how much debt you have and the details of it (interest rate, types of debt, how you acquired the debt, etc.), express your financial goals. Have the conversation around how you want to comingle expenses when you’re married if you haven’t already.
Money is one of the biggest topics couples fight about. Air it all out now and start off on the right foot.
Suggestions:
- If you two are footing part, or all, of the bill for the wedding, now is a great time to plan out how much you need and how you’re going to save for it. Establish a joint savings account and stash money into it on a monthly, bimonthly, or biweekly basis. This will be good to have as you get cash gifts along the way (i.e. bridal showers and wedding gifts).
- Talk about your short-term and long-term financial goals on an individual level and then on a joint level. Write them down and make them happen.
Splitting Finances When You’re Married
There is no right or wrong way to split your finances when you are married. I know plenty of couples that go all in and have one big pot of “ours” and I know plenty of couples that keep things separate. You need to determine what works for you as a partnership, that won’t end up in resentment.
Suggestions:
- Combine it all. You are a household and a family, feel free to go with the everything is “ours” plan
- Combine it all, but…. Keep your own “fun” money separate. Everybody has their own money personalities, which means you’re bound to have issues with your SO on how they spend. To avoid conflict, come up with a fair amount that each person spend (or save) however they please. Spend it all, let it build up, doesn’t matter. Ultimately, that money is yours to do whatever you want with it.
- Keep it separate! Have your income go into your own checking account. Maybe you decide to have a joint checking for shared expenses that each of you contribute to however you see fit.
Determine your money personality and discuss it with your partner. Be open about the differences and how you can avoid resentment. Be open minded and communicate and you’ll be on the right path!
Carolyn Rowland is a CERTIFIED FINANCIAL PLANNER™ passionate about empowering individuals to take control of their financial landscape. “We often tend to place our own priorities on the back burner for others, resulting in sacrifices we don’t often realize we’re making.”Carolyn believes in taking a values-based approach to financial planning. “Together we’ll define what matters most to you, what you want your life to look like, and develop a plan that fits your lifestyle.”
Carolyn Rowland is in the Milwaukee WI, area.