How Do You Share Expenses?

Questions on how we spend our money and our time - consumer goods and services, home and vehicle, leisure and recreational activities
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dumbbunny
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How Do You Share Expenses?

Post by dumbbunny » Thu Mar 09, 2017 6:34 pm

Wife and I have always keep our money matter separate.
Long story short version:
1990 - I bought house with mortgage
1992 - Married. She paid 20% piti for 20% ownership
2011 - Separated and sold house. She got 20% of proceeds.
2013 - Reconciled. Moved back in to the house she bought. Paid $500/month rent (no ownership), $35 internet, and most of the food. She paid other utilities.
2016 - I bought beach house (all cash) and moved out. She stayed to take care of her mother
Present - Wife is selling house and moving to the beach.

She wants to know what I am going to charge and for what.
When I moved in with her she didn't require rent but I wanted to pay her something so I started with $500.
I have no idea where to start figuring out the answer.
I was thinking of just charging her for half of the property tax and half of the utilities.
BTW - the house would be going to her at my time of death but that is all.
How do you split expenses if you are in the same predicament?
Thanks
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vitaflo
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Re: How Do You Share Expenses?

Post by vitaflo » Thu Mar 09, 2017 6:42 pm

Be prepared for a lot of "put all your finances together or it's not a real marriage" type posts. They always tend to happen when these types of threads come up.

My wife and I tried to manage the shared expenses thing for a long while, we like separate finances. Eventually it became difficult and led to a lot of tit-for-tat discussions, which it sounds like you're seeing now.

What we decided on was a slight compromise. We figured out what our monthly expenses were and a budget around them. Then we created a joint account where we put the same amount of money into every month. All shared expenses then came from that account. Since you're putting the same amounts in, and the account is only for shared expenses, you are always splitting those expenses 50/50.

That made things a *lot* easier. Of course, non-shared expenses we just pay for individually like we always had been. I would recommend an approach like this because it just makes it easier. You don't need to think about it as much.

newbie_Mo
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Re: How Do You Share Expenses?

Post by newbie_Mo » Thu Mar 09, 2017 7:17 pm

If half of the utilities cost and property tax is what you want then tell her.

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Re: How Do You Share Expenses?

Post by corysold » Thu Mar 09, 2017 7:48 pm

newbie_Mo wrote:If half of the utilities cost and property tax is what you want then tell her.
That would seem to make sense.

"I was thinking of charging you half the taxes and utilities. That is about $XXX/mo. What were you thinking is a fair amount?" and go from there.

dbr
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Re: How Do You Share Expenses?

Post by dbr » Thu Mar 09, 2017 10:10 pm

vitaflo wrote:Be prepared for a lot of "put all your finances together or it's not a real marriage" type posts. They always tend to happen when these types of threads come up.
Yeah, I get it, but 38 years of exactly that has surely been a low energy, low stress, pretty nice way to get along with someone else.

PS I don't equate or not equate this with whatever "real" marriage is, but when it works, it works really well.

To be on topic, the question was how I (we) share expenses, and that is it. Sorry not to be more helpful.

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Re: How Do You Share Expenses?

Post by VictoriaF » Thu Mar 09, 2017 10:21 pm

dumbbunny wrote:I was thinking of just charging her for half of the property tax and half of the utilities.
You can also charge your wife a half of income you would have received if the sum you paid for the house were invested. For example, if you paid for the house $300,000 one alternative would have been to put these money into a 3% CD at the Andrews Federal Credit Union. $300,000 x 3% = $9,000/year income that you forego by tying up your cash.

Note that I specifically refer to a safe guaranteed investment in a Federally insured CD. I do not recommend using any historical or hypothetical market returns as a basis for your foregone income.

Victoria
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Saving$
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Re: How Do You Share Expenses?

Post by Saving$ » Thu Mar 09, 2017 10:27 pm

vitaflo wrote:...Then we created a joint account where we put the same amount of money into every month. All shared expenses then came from that account. Since you're putting the same amounts in, and the account is only for shared expenses, you are always splitting those expenses 50/50.

That made things a *lot* easier. Of course, non-shared expenses we just pay for individually like we always had been. I would recommend an approach like this because it just makes it easier. You don't need to think about it as much.
This. For all the reasons Vitaflo noted.

I would add if you can both afford it, put add more than just the expenses to the joint account every month. Then you can use the joint account money to replace the roof, refrigerator or whatever needs fixing around the house you are equally using. It is also a good idea to get a credit card that you use only for joint expenses - groceries, eating out together, travel, a new tv, etc. and pay that credit card out of the joint account. Either one credit card account that will issue you both a card on the same account, or each of you just get your own extra credit card that you only use for joint expenses and pay off every month out of the joint account funds.

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Doom&Gloom
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Re: How Do You Share Expenses?

Post by Doom&Gloom » Thu Mar 09, 2017 10:33 pm

DW and I maintain separate accounts and share all expenses, but we have never been down the bumpy road you describe.

I really wouldn't know where to begin to start with your situation--but if I were forced to, I would:

have laid out a mutually agreed upon arrangement at the moment of the latest reconciliation. From your OP that seems to have been 2013, no? That would have been the time to agree how expenses were to be shared from that moment forward. All arrangements, payments, transactions, etc prior to that date should have had no bearing on the current agreement.

Honestly, this sounds like a business partnership more than anything else. Perhaps you really should listen to the "everything in one pot" people. It might actually have some unanticipated benefits for the two of you.

Good luck. I would hate to have to tackle this.

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tdhg566
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Re: How Do You Share Expenses?

Post by tdhg566 » Thu Mar 09, 2017 10:58 pm

Doom&Gloom wrote:...Honestly, this sounds like a business partnership more than anything else. Perhaps you really should listen to the "everything in one pot" people. It might actually have some unanticipated benefits for the two of you.

Good luck. I would hate to have to tackle this.
Can't agree more, but OP has been in this relationship for 25 years so it probably won't change. I know I couldn't have done this for even 25 months.
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Alto Astral
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Re: How Do You Share Expenses?

Post by Alto Astral » Thu Mar 09, 2017 11:38 pm

I like the story like this:
dumbbunny wrote:Wife and I have always keep our money matter separate.
...
2016 - I bought beach house (all cash) and moved out. She stayed to take care of her mother
Present - Wife is selling house and moving to the beach.
...
BTW - the house would be going to her at my time of death but that is all.
Sounds like you two are independent but like being together. She was generous to accept only $500. You are generous to ask only 1/2 (tax + utils). Make it a flat dollar amount and skip the monthly divvy.

randomguy
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Re: How Do You Share Expenses?

Post by randomguy » Thu Mar 09, 2017 11:52 pm

tdhg566 wrote:
Doom&Gloom wrote:...Honestly, this sounds like a business partnership more than anything else. Perhaps you really should listen to the "everything in one pot" people. It might actually have some unanticipated benefits for the two of you.

Good luck. I would hate to have to tackle this.
Can't agree more, but OP has been in this relationship for 25 years so it probably won't change. I know I couldn't have done this for even 25 months.

There a zillion schemes couples use to deal with money. Trying to impose one couples on another is just a bad idea.

In this case the question is sort of what both of you want. If you don't charge her enough, she feels like a freeloader. Charge too much and you feel exploitive. Figure out that number and then you can use any sort of logic (half of taxes, pays insurance, utilities,...) to justify it. To some extent it all comes down to how anal both of you are about being in debt to one another.

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dumbbunny
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Re: How Do You Share Expenses?

Post by dumbbunny » Fri Mar 10, 2017 12:55 am

randomguy wrote:
tdhg566 wrote:
Doom&Gloom wrote:...Honestly, this sounds like a business partnership more than anything else. Perhaps you really should listen to the "everything in one pot" people. It might actually have some unanticipated benefits for the two of you.

Good luck. I would hate to have to tackle this.
Can't agree more, but OP has been in this relationship for 25 years so it probably won't change. I know I couldn't have done this for even 25 months.

There a zillion schemes couples use to deal with money. Trying to impose one couples on another is just a bad idea.

In this case the question is sort of what both of you want. If you don't charge her enough, she feels like a freeloader. Charge too much and you feel exploitive. Figure out that number and then you can use any sort of logic (half of taxes, pays insurance, utilities,...) to justify it. To some extent it all comes down to how anal both of you are about being in debt to one another.
OP here. Yes, it may sound like a business partnership but it isn't. Keeping our finance separate was my wife's idea because her first husband mismanaged their finances and she wanted more control over her hard-earned money.
“It’s the curse of old men to realize that in the end we control nothing." "Homeland" episode, "Gerontion"

denovo
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Re: How Do You Share Expenses?

Post by denovo » Fri Mar 10, 2017 3:34 am

Are there kids involved? Either in common or with other spouses?
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Pajamas
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Re: How Do You Share Expenses?

Post by Pajamas » Fri Mar 10, 2017 3:46 am

Why not just charge her what she charged you 3-4 years ago? If you want to bump it up a little more for inflation, you might.

That might be fair even if the house you bought cost significantly more than the house she bought, because she didn't get to pick it out and she's moving in because you are there, not because of the house.

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yatesd
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Re: How Do You Share Expenses?

Post by yatesd » Fri Mar 10, 2017 7:05 am

I would just put all the money in one pot or use this opportunity as a chance to bail.

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Re: How Do You Share Expenses?

Post by AlohaJoe » Fri Mar 10, 2017 7:18 am

Almost any price up to the market price could be fair or unfair depending on the discussions you have.

What you propose seems fine to me. I'd clarify up front how future increases do or don't work.

And as expected, most of the replies are worthless on a topic like this, unfortunately. "Everyone should be like me, because my way (which is really my parent's way that I unthinking adopted) worked for me, so it is the only way."

dsmil
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Re: How Do You Share Expenses?

Post by dsmil » Fri Mar 10, 2017 9:10 am

We've always shared accounts and written down all of our spending. This was easy because we moved in together after college and didn't really have any money. I like that we've always been very open about money because it lets us focus on hitting goals together.

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Re: How Do You Share Expenses?

Post by Sandtrap » Fri Mar 10, 2017 9:18 am

Actionable considerations:
Seperate accounts. Expenses and monthly stipends quantified and mutually agreed upon.
Spreadsheet if needed. Printed out so it is tangible. Copy to each.
Similar to an IPS statement that is agreed on. Only things that are quantifiable are valid.
Minimize conflict. Everyone on the same page.
Very solid legal lines and boundaries. Ownership. Title. Expenses. Income.
(Like Sheldon Cooper's, "Roomate Agreement", every couple is different) :D
However, be sure to save enough emergency money in your own account that is very very safe for a rainy rainy day.
Last edited by Sandtrap on Fri Mar 10, 2017 9:22 am, edited 3 times in total.

Tal-
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Re: How Do You Share Expenses?

Post by Tal- » Fri Mar 10, 2017 9:20 am

Tough situation. I have thoughts, but zero experience in arrangements like this...

1: Don't give her an ownership stake. I'm not sure if this is on the table, but it shouldn't' be.
2: You can't do 20% of PITI or more, as you've done that in the past, and that was associated with ownership. Any arrangement that you set up based on PITI should probably be lower than 20%. This is probably unfair to you, but is also the precedent that you set up.
3: Assume this to be a long-term arrangement, so find a way to let the amount charged vary year-to-year. For this reason, I would lean towards a PITI arrangement rather than a dollar value arrangement.

If pressed for a number, I would day 15% of PITI, with that amount (but not percent) changing whenever your PITI changes. You retain 100% ownership and decision making authority.

*shrugs*
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Re: How Do You Share Expenses?

Post by dbr » Fri Mar 10, 2017 9:32 am

So people are down on the "share everything" useless comments.

The other answer is do anything the two of you are mutually agreeable to. For starters you could charge nothing for living in the house, no share of mortgage payments, taxes, utilities, phone, cable, insurance, assessments, etc. Why bother? It is your house and she has no ownership interest. Leave it that way. A thought is that if you charge rent, she becomes a tenant. Do you want that?

What other expenses are there? If one or the other of you brings furniture, decorations, appliances, etc., to the house those belong to whoever owns them. If you want to get picky you can tally and split the food bill or you can just contribute food pot luck and ignore who pays for what.

Does that work?

So the real question is what is the predicament given that there are any number of answers all of which are completely possible?

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Re: How Do You Share Expenses?

Post by dumbbunny » Fri Mar 10, 2017 11:45 am

denovo wrote:Are there kids involved? Either in common or with other spouses?
We had no kids together but she has two from former marriage. They will receive her estate when she passes.
“It’s the curse of old men to realize that in the end we control nothing." "Homeland" episode, "Gerontion"

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Re: How Do You Share Expenses?

Post by Midpack » Fri Mar 10, 2017 11:54 am

We don't keep expenses separate, it's worked well for 37 years so far. As long as you're financially compatible, I'm not sure why it's necessary - my SO and I are both frugal. As a courtesy, we tell each other before any big expense (say anything over a couple hundred $) - she has never once told me 'no,' and I've never told her 'no.' I'm making no judgement on marriage, finances is just one aspect.
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dumbbunny
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Re: How Do You Share Expenses?

Post by dumbbunny » Fri Mar 10, 2017 11:56 am

OP here, again. I have 3-4 months to come up with a proposal and will consider some of these creative suggestions. Thanks to all for taking the time.
“It’s the curse of old men to realize that in the end we control nothing." "Homeland" episode, "Gerontion"

researcher
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Re: How Do You Share Expenses?

Post by researcher » Fri Mar 10, 2017 12:13 pm

dumbbunny wrote: I bought beach house (all cash) and moved out.She stayed to take care of her mother.

She wants to know what I am going to charge and for what.
I have no idea where to start figuring out the answer.
BTW - the house would be going to her at my time of death but that is all.
I understand her wanting to keep money/accounts separate, but it appears you both make important life decisions separately, instead of together as a unified married couple.

You've been married to each other for 25 YEARS, yet she needs to know "what I am going to charge and for what." That sounds more like a roommate situation than a marriage. Why not just discuss this with your wife, instead of playing the part of a landlord and dictating rental terms?

Curious why didn't you just buy the beach house together and split all costs 50/50?

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Doom&Gloom
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Re: How Do You Share Expenses?

Post by Doom&Gloom » Fri Mar 10, 2017 1:21 pm

dbr wrote:So people are down on the "share everything" useless comments.

The other answer is do anything the two of you are mutually agreeable to. For starters you could charge nothing for living in the house, no share of mortgage payments, taxes, utilities, phone, cable, insurance, assessments, etc. Why bother? It is your house and she has no ownership interest. Leave it that way. A thought is that if you charge rent, she becomes a tenant. Do you want that?

What other expenses are there? If one or the other of you brings furniture, decorations, appliances, etc., to the house those belong to whoever owns them. If you want to get picky you can tally and split the food bill or you can just contribute food pot luck and ignore who pays for what.

Does that work?

So the real question is what is the predicament given that there are any number of answers all of which are completely possible?
I don't think "people are down on the 'share everything' useless comments."

The other answer is do anything the two of you are mutually agreeable to.

Exactly! But according to OP this couple has a history of sharing expenses dating back to 1990. They are not a newly-engaged couple trying to figure things out. Yet here he is asking what to do. Given their history, I doubt anyone here could even take a stab as to how they should proceed other than to tell them to sit down together, figure out what they are both satisfied with, and go from there.

Bacchus01
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Re: How Do You Share Expenses?

Post by Bacchus01 » Fri Mar 10, 2017 1:47 pm

She charges it.

I pay it.

Seems to work for us.

squirm
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Re: How Do You Share Expenses?

Post by squirm » Fri Mar 10, 2017 2:03 pm

Everything goes in one pot marriage here. Wouldn't have it any other way, it's not a business agreement. We leave work antics at work.

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Re: How Do You Share Expenses?

Post by N1CKV » Fri Mar 10, 2017 3:46 pm

I keep separate finances from my wife also.
In my case, she pays me roughly 1/2 of my house note as "rent". I pay regular utilities. She wanted internet and cable so she pays for that.
We have a joint credit card that we put all joint expenses on. At the end of every statement cycle I send her a "bill" for half of the credit card balance and her "rent". Very soon I hope to take the leap and just pay off my mortgage, at that time I plan to encourage her to stop paying rent and to double up her car note (roughly the same amount, she unwillingly went from a 2012 paid for car to a 2016 when her car flooded last year).

In your situation I would do one of two things:
1. Let her pay all utilities/phone/cable/internet, etc. You should pay your property taxes.
2. Charge her a flat rate every month, make it cheap but enough to be symbolic, like $300-400. If you feel bad about that and don't really need it then just stick it in a savings account and use it to fund vacations or new furniture, maybe a remodel - something you will both enjoy.
I have met a lot of people that claim to love money, but they also seem to be the same people that are in the biggest hurry to get rid of it.

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Re: How Do You Share Expenses?

Post by dumbbunny » Sat Mar 11, 2017 4:27 pm

researcher wrote:
dumbbunny wrote: I bought beach house (all cash) and moved out.She stayed to take care of her mother.

She wants to know what I am going to charge and for what.
I have no idea where to start figuring out the answer.
BTW - the house would be going to her at my time of death but that is all.
I understand her wanting to keep money/accounts separate, but it appears you both make important life decisions separately, instead of together as a unified married couple.

You've been married to each other for 25 YEARS, yet she needs to know "what I am going to charge and for what." That sounds more like a roommate situation than a marriage. Why not just discuss this with your wife, instead of playing the part of a landlord and dictating rental terms?

Curious why didn't you just buy the beach house together and split all costs 50/50?
OP here. To clarify I "moved out" because we had been looking for coast property and finally a house became available. Wife felt obligated to stay in town to help take care of her 100 year old mother. Because the real estate market is so hot in Portland metro, wife decided to sell her house and commute once a week from the coast to help her mother. We talk through our life decisions.

Wife doesn't want the worries of maintaining a house anymore after owning her own for nine years so she doesn't want to buy half of the house. I'm okay with that.
“It’s the curse of old men to realize that in the end we control nothing." "Homeland" episode, "Gerontion"

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dumbbunny
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Re: How Do You Share Expenses?

Post by dumbbunny » Sat Mar 11, 2017 4:28 pm

Bacchus01 wrote:She charges it.

I pay it.

Seems to work for us.
I won't suggest this to her. :happy
“It’s the curse of old men to realize that in the end we control nothing." "Homeland" episode, "Gerontion"

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celia
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Re: How Do You Share Expenses?

Post by celia » Sat Mar 11, 2017 4:59 pm

dumbbunny wrote:
denovo wrote:Are there kids involved? Either in common or with other spouses?
We had no kids together but she has two from former marriage. They will receive her estate when she passes.
I would look at it from an estate/distribution perspective since you each apparently want to leave your estates to different heirs. That's fine and in your circumstances it is best to keep your finances separate, except for your joint expenses, for which you should use a separate (new) account.

Basically, this is what we now do, although 90% of our assets are held jointly. Starting about 10 years ago we each inherited something from each side of our family and want to keep it separate to go back to that side of the family. My dad did this too after our mom died and he married again. When his second wife died, her kids were surprised to get their inheritance on the day of the funeral, since all her assets remained liquid. He has since re-married and it is still the same situation, with his kids not receiving anything until HE dies.

Something to think about...

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TinkerPDX
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Re: How Do You Share Expenses?

Post by TinkerPDX » Sat Mar 11, 2017 5:19 pm

We're now a one-income family, so not much splitting. But even before that, most of our accounts were shared. We actually bought our first home in her name only before we were married because of credit issues. We don't budget much, other than making sure we're saving on target, and discussing major purchases. The credit card we actually use is shared.

We do have an interim cost-sharing situation while we share a house with DMIL and DFIL, while they build their granny-flat in the back yard. We track all grocery and utility expenses in a spreadsheet, and each month when we pay them rent, we adjust it to reconcile sharing of the household expenses.

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celia
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Re: How Do You Share Expenses?

Post by celia » Sat Mar 11, 2017 6:01 pm

TinkerPDX wrote:We're now a one-income family, so not much splitting. But even before that, most of our accounts were shared. We actually bought our first home in her name only before we were married because of credit issues. We don't budget much, other than making sure we're saving on target, and discussing major purchases. The credit card we actually use is shared.

We do have an interim cost-sharing situation while we share a house with DMIL and DFIL, while they build their granny-flat in the back yard. We track all grocery and utility expenses in a spreadsheet, and each month when we pay them rent, we adjust it to reconcile sharing of the household expenses.
If your wife owns the house you live in, why are you paying your in-laws rent? Shouldn't they be paying you/your wife?

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Re: How Do You Share Expenses?

Post by michaeljc70 » Sat Mar 11, 2017 7:25 pm

Having been in a similar situation before, there is no simple solution. You can get into all kinds of questions like would the other person have bought a similar place ("well, I would never have spent this much"), what is their income (obviously cannot pay what they don't have), etc. I've heard it argued "I am paying rent while you are getting all the capital gains" (most likely not much in 2009). I think you just have to come up with a number you both think is fair based on all the factors. Ultimately if you want to live together sacrifices have to be made and you just need to agree on something that is reasonable and you can both live with.

One way you can look at it is if she was not there, your housing expenses would pretty much remain the same so anything you get is gravy. I mean, yes you use some more water and electricity, but that is minimal. On the other hand, you can look at it as she is getting a place to live and if she has the means shouldn't be a freeloader.

Leemiller
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Re: How Do You Share Expenses?

Post by Leemiller » Sun Mar 12, 2017 12:33 am

My husband and I keep some separate accounts and pay for different things regularly. For irregular items we take turns. It works for us. Perhaps having her pay for certain bills, like electric or cable, would be my suggestion. That way she can take over certain expenses and you won't have to do a monthly accounting.

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Re: How Do You Share Expenses?

Post by ruralavalon » Sun Mar 12, 2017 11:43 am

dumbbunny wrote:Wife and I have always keep our money matter separate.
Long story short version:
1990 - I bought house with mortgage
1992 - Married. She paid 20% piti for 20% ownership
2011 - Separated and sold house. She got 20% of proceeds.
2013 - Reconciled. Moved back in to the house she bought. Paid $500/month rent (no ownership), $35 internet, and most of the food. She paid other utilities.
2016 - I bought beach house (all cash) and moved out. She stayed to take care of her mother
Present - Wife is selling house and moving to the beach.

She wants to know what I am going to charge and for what.
When I moved in with her she didn't require rent but I wanted to pay her something so I started with $500.
I have no idea where to start figuring out the answer.
I was thinking of just charging her for half of the property tax and half of the utilities.
BTW - the house would be going to her at my time of death but that is all.
How do you split expenses if you are in the same predicament?
Thanks
dumbbunny wrote:OP here. Yes, it may sound like a business partnership but it isn't. Keeping our finance separate was my wife's idea because her first husband mismanaged their finances and she wanted more control over her hard-earned money.
dumbbunny wrote:We had no kids together but she has two from a prior marriage. They will receive her estate when she passes.
dumbbunny wrote:OP here. To clarify I "moved out" because we had been looking for coast property and finally a house became available. Wife felt obligated to stay in town to help take care of her 100 year old mother. Because the real estate market is so hot in Portland metro, wife decided to sell her house and commute once a week from the coast to help her mother. We talk through our life decisions.

Wife doesn't want the worries of maintaining a house anymore after owning her own for nine years so she doesn't want to buy half of the house. I'm okay with that.
What are your ages? What are your respective incomes?

It may be a good idea at this point to try combining some of the household finances. This doesn't need to mean combining all of your finances, or sharing all expenses. This doesn't need to be based on what expenses you shared in the past.

What would your beach house rent for on an an annual basis? Estimate an annual amount of expenses to share such as -- 1) total housing expense including "rent" plus utilities, maintenance & repairs, 2) food budget including groceries and dining out, 3) travel and vacations, and 4) anything else you both agree to share.

Contribute every month to a joint checking account enough to cover 1/12 of the estimate of the shared annual expenses. Each of you contribute in proportion to your income, or any other formula you both agree to.

Also obtain a joint credit card to be used to charge some of the joint expenses such as groceries and travel.

Pay off the joint credit card every month out of the joint checking account.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

beattherush
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Judgmental crowd here

Post by beattherush » Sun Mar 12, 2017 3:33 pm

I'm surprised at some of the responses to the OP. Not our place to judge the spousal arrangement (aside from which, he expressed a perfectly good reason for it down thread). He asked a question, we answer it.

I guess the right answer is "what would you charge a roommate?" albeit one that you may not want to extract a profit from. So in that case, what's the real cost and liability of splitting a house with someone?

I'd charge 1/2 the carrying cost, including taxes, insurance, utilities, and a reasonable mortgage payment at 30-year fixed (regardless of your actual mortgage arrangement). That's a fair estimate of the "rental market" and keeps costs balanced appropriately between you/your estate and her/her estate

Not a lot of arguments to be had there. If she truly does not want to pay that and prefers an independent arrangement, I'm sure there are rental properties in the area.

michaeljc70
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Re: Judgmental crowd here

Post by michaeljc70 » Sun Mar 12, 2017 3:40 pm

beattherush wrote:I'm surprised at some of the responses to the OP. Not our place to judge the spousal arrangement (aside from which, he expressed a perfectly good reason for it down thread). He asked a question, we answer it.

I guess the right answer is "what would you charge a roommate?" albeit one that you may not want to extract a profit from. So in that case, what's the real cost and liability of splitting a house with someone?

I'd charge 1/2 the carrying cost, including taxes, insurance, utilities, and a reasonable mortgage payment at 30-year fixed (regardless of your actual mortgage arrangement). That's a fair estimate of the "rental market" and keeps costs balanced appropriately between you/your estate and her/her estate

Not a lot of arguments to be had there. If she truly does not want to pay that and prefers an independent arrangement, I'm sure there are rental properties in the area.
I'm actually surprised at your response. Family is not the same as a "roommate". It doesn't sound like it was a 50/50 split before. She also will get none of the appreciation (at least it seems so).

I wonder how many people have spouses that cook and reimburse them for the fair market value of the meal since you are distilling it all down to business.

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dumbbunny
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Location: Oregon coast

Re: How Do You Share Expenses?

Post by dumbbunny » Sun Mar 12, 2017 5:23 pm

ruralavalon wrote:
dumbbunny wrote:Wife and I have always keep our money matter separate.
Long story short version:
1990 - I bought house with mortgage
1992 - Married. She paid 20% piti for 20% ownership
2011 - Separated and sold house. She got 20% of proceeds.
2013 - Reconciled. Moved back in to the house she bought. Paid $500/month rent (no ownership), $35 internet, and most of the food. She paid other utilities.
2016 - I bought beach house (all cash) and moved out. She stayed to take care of her mother
Present - Wife is selling house and moving to the beach.

She wants to know what I am going to charge and for what.
When I moved in with her she didn't require rent but I wanted to pay her something so I started with $500.
I have no idea where to start figuring out the answer.
I was thinking of just charging her for half of the property tax and half of the utilities.
BTW - the house would be going to her at my time of death but that is all.
How do you split expenses if you are in the same predicament?
Thanks
dumbbunny wrote:OP here. Yes, it may sound like a business partnership but it isn't. Keeping our finance separate was my wife's idea because her first husband mismanaged their finances and she wanted more control over her hard-earned money.
dumbbunny wrote:We had no kids together but she has two from a prior marriage. They will receive her estate when she passes.
dumbbunny wrote:OP here. To clarify I "moved out" because we had been looking for coast property and finally a house became available. Wife felt obligated to stay in town to help take care of her 100 year old mother. Because the real estate market is so hot in Portland metro, wife decided to sell her house and commute once a week from the coast to help her mother. We talk through our life decisions.

Wife doesn't want the worries of maintaining a house anymore after owning her own for nine years so she doesn't want to buy half of the house. I'm okay with that.
What are your ages? What are your respective incomes?

It may be a good idea at this point to try combining some of the household finances. This doesn't need to mean combining all of your finances, or sharing all expenses. This doesn't need to be based on what expenses you shared in the past.

What would your beach house rent for on an an annual basis? Estimate an annual amount of expenses to share such as -- 1) total housing expense including "rent" plus utilities, maintenance & repairs, 2) food budget including groceries and dining out, 3) travel and vacations, and 4) anything else you both agree to share.

Contribute every month to a joint checking account enough to cover 1/12 of the estimate of the shared annual expenses. Each of you contribute in proportion to your income, or any other formula you both agree to.

Also obtain a joint credit card to be used to charge some of the joint expenses such as groceries and travel.

Pay off the joint credit card every month out of the joint checking account.
OP here. We are both retired. We aren't rolling in the dough by any means but we don't worry about money either. I just wanted to know how other couples who keep their expenses separate deal with housing. I bought the coast house because I wanted it and my wife likes the beach lifestyle more than city lifestyle. I feel she needs to pay for this opportunity in some way so that's why I suggested dividing up the property tax which (to me) reflects the "lifestyle" of the area. And sharing utilities is a no-brainer.
“It’s the curse of old men to realize that in the end we control nothing." "Homeland" episode, "Gerontion"

TRC
Posts: 1894
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Re: How Do You Share Expenses?

Post by TRC » Sun Mar 12, 2017 6:00 pm

dumbbunny wrote:
ruralavalon wrote:
dumbbunny wrote:Wife and I have always keep our money matter separate.
Long story short version:
1990 - I bought house with mortgage
1992 - Married. She paid 20% piti for 20% ownership
2011 - Separated and sold house. She got 20% of proceeds.
2013 - Reconciled. Moved back in to the house she bought. Paid $500/month rent (no ownership), $35 internet, and most of the food. She paid other utilities.
2016 - I bought beach house (all cash) and moved out. She stayed to take care of her mother
Present - Wife is selling house and moving to the beach.

She wants to know what I am going to charge and for what.
When I moved in with her she didn't require rent but I wanted to pay her something so I started with $500.
I have no idea where to start figuring out the answer.
I was thinking of just charging her for half of the property tax and half of the utilities.
BTW - the house would be going to her at my time of death but that is all.
How do you split expenses if you are in the same predicament?
Thanks
dumbbunny wrote:OP here. Yes, it may sound like a business partnership but it isn't. Keeping our finance separate was my wife's idea because her first husband mismanaged their finances and she wanted more control over her hard-earned money.
dumbbunny wrote:We had no kids together but she has two from a prior marriage. They will receive her estate when she passes.
dumbbunny wrote:OP here. To clarify I "moved out" because we had been looking for coast property and finally a house became available. Wife felt obligated to stay in town to help take care of her 100 year old mother. Because the real estate market is so hot in Portland metro, wife decided to sell her house and commute once a week from the coast to help her mother. We talk through our life decisions.

Wife doesn't want the worries of maintaining a house anymore after owning her own for nine years so she doesn't want to buy half of the house. I'm okay with that.
What are your ages? What are your respective incomes?

It may be a good idea at this point to try combining some of the household finances. This doesn't need to mean combining all of your finances, or sharing all expenses. This doesn't need to be based on what expenses you shared in the past.

What would your beach house rent for on an an annual basis? Estimate an annual amount of expenses to share such as -- 1) total housing expense including "rent" plus utilities, maintenance & repairs, 2) food budget including groceries and dining out, 3) travel and vacations, and 4) anything else you both agree to share.

Contribute every month to a joint checking account enough to cover 1/12 of the estimate of the shared annual expenses. Each of you contribute in proportion to your income, or any other formula you both agree to.

Also obtain a joint credit card to be used to charge some of the joint expenses such as groceries and travel.

Pay off the joint credit card every month out of the joint checking account.
OP here. We are both retired. We aren't rolling in the dough by any means but we don't worry about money either.


Why is this even an issue if this is the case? If it's an issue, pay for it yourself and call it a day. Happy wife, happy life!

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dumbbunny
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Location: Oregon coast

Re: Judgmental crowd here

Post by dumbbunny » Sun Mar 12, 2017 6:02 pm

michaeljc70 wrote:
beattherush wrote:I'm surprised at some of the responses to the OP. Not our place to judge the spousal arrangement (aside from which, he expressed a perfectly good reason for it down thread). He asked a question, we answer it.

I guess the right answer is "what would you charge a roommate?" albeit one that you may not want to extract a profit from. So in that case, what's the real cost and liability of splitting a house with someone?

I'd charge 1/2 the carrying cost, including taxes, insurance, utilities, and a reasonable mortgage payment at 30-year fixed (regardless of your actual mortgage arrangement). That's a fair estimate of the "rental market" and keeps costs balanced appropriately between you/your estate and her/her estate

Not a lot of arguments to be had there. If she truly does not want to pay that and prefers an independent arrangement, I'm sure there are rental properties in the area.
I'm actually surprised at your response. Family is not the same as a "roommate". It doesn't sound like it was a 50/50 split before. She also will get none of the appreciation (at least it seems so).

I wonder how many people have spouses that cook and reimburse them for the fair market value of the meal since you are distilling it all down to business.
OP here. Yeah, my wife is not my roommate. I've had roommates before and there is quite a difference. :happy The reason for the 80/20 split was because I inherited some money and I put 80% of it into a house "to prepare the nest" because I planned on proposing to her. She accepted my proposal and we decided to split the p.i.t.i. so she could build up some equity. Simple as that. She is okay with how our ups and downs have played out because it's still better than her first marriage.
“It’s the curse of old men to realize that in the end we control nothing." "Homeland" episode, "Gerontion"

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dumbbunny
Posts: 840
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Location: Oregon coast

Re: How Do You Share Expenses?

Post by dumbbunny » Sun Mar 12, 2017 6:11 pm

TRC wrote:
dumbbunny wrote:
ruralavalon wrote:
dumbbunny wrote:Wife and I have always keep our money matter separate.
Long story short version:
1990 - I bought house with mortgage
1992 - Married. She paid 20% piti for 20% ownership
2011 - Separated and sold house. She got 20% of proceeds.
2013 - Reconciled. Moved back in to the house she bought. Paid $500/month rent (no ownership), $35 internet, and most of the food. She paid other utilities.
2016 - I bought beach house (all cash) and moved out. She stayed to take care of her mother
Present - Wife is selling house and moving to the beach.

She wants to know what I am going to charge and for what.
When I moved in with her she didn't require rent but I wanted to pay her something so I started with $500.
I have no idea where to start figuring out the answer.
I was thinking of just charging her for half of the property tax and half of the utilities.
BTW - the house would be going to her at my time of death but that is all.
How do you split expenses if you are in the same predicament?
Thanks
dumbbunny wrote:OP here. Yes, it may sound like a business partnership but it isn't. Keeping our finance separate was my wife's idea because her first husband mismanaged their finances and she wanted more control over her hard-earned money.
dumbbunny wrote:We had no kids together but she has two from a prior marriage. They will receive her estate when she passes.
dumbbunny wrote:OP here. To clarify I "moved out" because we had been looking for coast property and finally a house became available. Wife felt obligated to stay in town to help take care of her 100 year old mother. Because the real estate market is so hot in Portland metro, wife decided to sell her house and commute once a week from the coast to help her mother. We talk through our life decisions.

Wife doesn't want the worries of maintaining a house anymore after owning her own for nine years so she doesn't want to buy half of the house. I'm okay with that.
What are your ages? What are your respective incomes?

It may be a good idea at this point to try combining some of the household finances. This doesn't need to mean combining all of your finances, or sharing all expenses. This doesn't need to be based on what expenses you shared in the past.

What would your beach house rent for on an an annual basis? Estimate an annual amount of expenses to share such as -- 1) total housing expense including "rent" plus utilities, maintenance & repairs, 2) food budget including groceries and dining out, 3) travel and vacations, and 4) anything else you both agree to share.

Contribute every month to a joint checking account enough to cover 1/12 of the estimate of the shared annual expenses. Each of you contribute in proportion to your income, or any other formula you both agree to.

Also obtain a joint credit card to be used to charge some of the joint expenses such as groceries and travel.

Pay off the joint credit card every month out of the joint checking account.
OP here. We are both retired. We aren't rolling in the dough by any means but we don't worry about money either.


Why is this even an issue if this is the case? If it's an issue, pay for it yourself and call it a day. Happy wife, happy life!


OP here. Why is this an issue? - it's because I would be spending down my tIRA and being taxed for it. Wife and I split our taxes according to income - which was quite substantial this year because of the capital gains tax I had for selling mutual funds to buy this house and will be for her when she sells her house in a few month. I am trying to delay my SS for another three years so that if I die before my wife, she would get the spousal benefit which is about $700 more per month.
Last edited by dumbbunny on Sun Mar 12, 2017 6:17 pm, edited 1 time in total.
“It’s the curse of old men to realize that in the end we control nothing." "Homeland" episode, "Gerontion"

mouses
Posts: 3822
Joined: Sat Oct 24, 2015 12:24 am

Re: How Do You Share Expenses?

Post by mouses » Sun Mar 12, 2017 6:15 pm

dumbbunny wrote:Wife and I have always keep our money matter separate.
Long story short version:
1990 - I bought house with mortgage
1992 - Married. She paid 20% piti for 20% ownership
2011 - Separated and sold house. She got 20% of proceeds.
2013 - Reconciled. Moved back in to the house she bought. Paid $500/month rent (no ownership), $35 internet, and most of the food. She paid other utilities.
2016 - I bought beach house (all cash) and moved out. She stayed to take care of her mother
Present - Wife is selling house and moving to the beach.

She wants to know what I am going to charge and for what.
When I moved in with her she didn't require rent but I wanted to pay her something so I started with $500.
I have no idea where to start figuring out the answer.
I was thinking of just charging her for half of the property tax and half of the utilities.
BTW - the house would be going to her at my time of death but that is all.
How do you split expenses if you are in the same predicament?
Thanks
I haven't had time to read all the responses.

OP, let me congratulate you and your wife on your flexibility. You two have made a complicated situation work well.

You seem to have been even up to 2013. Why not have the same arrangement now in reverse that you had when you moved into her house, $500 plus some of the expenses. Unless the property tax is enormous, as it may be with a beach house, then things would seem to be more complicated; If she pays a bundle for half that, it would seem that she should have some guarantee towards ownership or partial ownership of the house more concrete than what you may have in place currently.

(Do I get aggravated at the patronizing happy wife, happy life remarks.)

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Toons
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Re: How Do You Share Expenses?

Post by Toons » Sun Mar 12, 2017 6:23 pm

All For One
One For All Here.
We are Married.
As ONE. :happy
"One does not accumulate but eliminate. It is not daily increase but daily decrease. The height of cultivation always runs to simplicity" –Bruce Lee

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TinkerPDX
Posts: 277
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Re: How Do You Share Expenses?

Post by TinkerPDX » Mon Mar 13, 2017 3:02 pm

celia wrote:
TinkerPDX wrote:We're now a one-income family, so not much splitting. But even before that, most of our accounts were shared. We actually bought our first home in her name only before we were married because of credit issues. We don't budget much, other than making sure we're saving on target, and discussing major purchases. The credit card we actually use is shared.

We do have an interim cost-sharing situation while we share a house with DMIL and DFIL, while they build their granny-flat in the back yard. We track all grocery and utility expenses in a spreadsheet, and each month when we pay them rent, we adjust it to reconcile sharing of the household expenses.
If your wife owns the house you live in, why are you paying your in-laws rent? Shouldn't they be paying you/your wife?
Wife owns the house we used to live in. We've moved out of that one and kept it as a rental. Now we live in a home owned by the in-laws; but once they finish their cottage/ADU, we will purchase the whole property from them and rent it to them.

Wife and I never paid rent to each other, neither when I was the tenant and she was technically a subtenant, or after we (she, technically) bought it and I was technically a tenant, because by then we were already just sharing everything. Money goes into joint checking account and out for all expenses. There was a period we were both earning, then only her (law school), now only me (she's full-time with the kid).

Lars_2013
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Re: How Do You Share Expenses?

Post by Lars_2013 » Mon Mar 13, 2017 3:22 pm

dumbbunny wrote:OP here. We are both retired. We aren't rolling in the dough by any means but we don't worry about money either. I just wanted to know how other couples who keep their expenses separate deal with housing. I bought the coast house because I wanted it and my wife likes the beach lifestyle more than city lifestyle. I feel she needs to pay for this opportunity in some way so that's why I suggested dividing up the property tax which (to me) reflects the "lifestyle" of the area. And sharing utilities is a no-brainer.
My spouse and I keep our finances separate, and he purchased our home in his name alone before we were legally married. I pay him rent plus 1/2 utilities. Rent is based on a rough estimate of the cost of being a room renter in our neighborhood (easily ascertained from craigslist), plus an extra $100/month since my stuff is more all over the house than if I were a typical room renter. That happens to equal about 1/2 the PITI on the house, but we didn't calculate it that way. When we have friend staying for an extended period of time paying rent, we slightly lower my "rent".

I've suggested that instead of calculating 1/2 utilities each month we should just set a higher fixed monthly payment, but my spouse is more comfortable doing the utilities split.

remomnyc
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Re: How Do You Share Expenses?

Post by remomnyc » Mon Mar 13, 2017 3:30 pm

Another vote for doing what worked in 2013 when she was the owner.

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dumbbunny
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Re: How Do You Share Expenses?

Post by dumbbunny » Mon Mar 13, 2017 3:48 pm

Lars_2013 wrote:
dumbbunny wrote:OP here. We are both retired. We aren't rolling in the dough by any means but we don't worry about money either. I just wanted to know how other couples who keep their expenses separate deal with housing. I bought the coast house because I wanted it and my wife likes the beach lifestyle more than city lifestyle. I feel she needs to pay for this opportunity in some way so that's why I suggested dividing up the property tax which (to me) reflects the "lifestyle" of the area. And sharing utilities is a no-brainer.
My spouse and I keep our finances separate, and he purchased our home in his name alone before we were legally married. I pay him rent plus 1/2 utilities. Rent is based on a rough estimate of the cost of being a room renter in our neighborhood (easily ascertained from craigslist), plus an extra $100/month since my stuff is more all over the house than if I were a typical room renter. That happens to equal about 1/2 the PITI on the house, but we didn't calculate it that way. When we have friend staying for an extended period of time paying rent, we slightly lower my "rent".

I've suggested that instead of calculating 1/2 utilities each month we should just set a higher fixed monthly payment, but my spouse is more comfortable doing the utilities split.
OP here. Zillow reports I could charge $1650/month. When I paid my wife rent in 2013, her house could have rented out for $1700 (and I paid her $500 - $350 under the rate for half since there are two people but I bought most of the food because I like to cook and she still worked so I would have a nice meal ready for her when she got home). Please remember the beach house is paid for - no p.i.t.i. I wouldn't feel right charging her rent but I have no problem charging her for the "privilege" of living at the coast. This "privilege" would be the property taxes. Thanks for your reply.
“It’s the curse of old men to realize that in the end we control nothing." "Homeland" episode, "Gerontion"

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dumbbunny
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Re: How Do You Share Expenses?

Post by dumbbunny » Mon Mar 13, 2017 3:57 pm

remomnyc wrote:Another vote for doing what worked in 2013 when she was the owner.
Thanks for your vote. Another reason why I insisted on paying her $500/month was because she had a mortgage and I thought I could help her out. She argued that it wasn't necessary for me to pay rent but after a while she did admit that the extra money did help. She is very frugal and has Boglehead characteristics though she can't identify with Mr. Bogle.

In my current situation, the house is paid for and there is no cash flow worries. So that is why I suggested just splitting the taxes and utilities. I have included 1% of the value of the house for maintenance in my budget and her presence isn't a factor in maintenance.
“It’s the curse of old men to realize that in the end we control nothing." "Homeland" episode, "Gerontion"

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dumbbunny
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Re: How Do You Share Expenses?

Post by dumbbunny » Mon Mar 13, 2017 4:04 pm

VictoriaF wrote:
dumbbunny wrote:I was thinking of just charging her for half of the property tax and half of the utilities.
You can also charge your wife a half of income you would have received if the sum you paid for the house were invested. For example, if you paid for the house $300,000 one alternative would have been to put these money into a 3% CD at the Andrews Federal Credit Union. $300,000 x 3% = $9,000/year income that you forego by tying up your cash.

Note that I specifically refer to a safe guaranteed investment in a Federally insured CD. I do not recommend using any historical or hypothetical market returns as a basis for your foregone income.

Victoria
I like the way you think. I never would have thought about this approach but I'm afraid if I implemented this and had to explain it to my lovely wife, I would be sleeping on the couch until my last breath... which she might expedite.
“It’s the curse of old men to realize that in the end we control nothing." "Homeland" episode, "Gerontion"

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