Fair way to split expenses?

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Doom&Gloom
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Re: Fair way to split expenses?

Post by Doom&Gloom » Wed Nov 15, 2017 5:50 pm

DaftInvestor wrote:
Wed Nov 15, 2017 4:53 pm
ajjulee wrote:
Wed Nov 15, 2017 4:49 pm

Anyway, hope it helps
:D Helped me tremendously! Just got off a rough conference call and needed a good laugh!
+1 Sans the conference call

delamer
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Re: Fair way to split expenses?

Post by delamer » Wed Nov 15, 2017 5:51 pm

wrongfunds wrote:
Wed Nov 15, 2017 11:43 am
Write down what you think is fair on piece of paper. Have your wife do the same. Then take a match and burn your paper. Use her paper to decide how to split the expenses. Anybody who is married over 30 years will agree with me.

Wow! Speaking as a wife, I would never expect my husband to placate me that way.

delamer
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Re: Fair way to split expenses?

Post by delamer » Wed Nov 15, 2017 5:53 pm

Spekus wrote:
Wed Nov 15, 2017 11:51 am
Common expenses is 50/50 , I think that is the only fair way if you have no kids,

usually she likes more expensive things than me but she earns less - that kinda puts limit on how much we spent, when I met her I started to spend more but it is still not much. We discuss on big expenses like rent on the flat, I put my desired price she puts hers and we meet in the middle - after a lot of arguing and some drama

Drinking out or coffee in a coffee places we have to finance by our own money, For computer I payed with my own money so did I for an iron as she does not use it. but she payed 2/3 for new wardrobe as I did not approve it but felt I should participate.

I remember we had an argument early about food she claimed I should pay a bigger part in food budget as I eat more - which is true. My argument was that she forces us to go out and thus I spent more than I desire on a thing I do not need. So we agreed to leave the split as 50/50 on these two things.



She does not know how much I earn and I think it is a good thing. But the most important thing we have similar understanding on the finance, we do not spend much money and we are against going into debt
You wife does not know your income? Do you know hers?

dbr
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Re: Fair way to split expenses?

Post by dbr » Wed Nov 15, 2017 6:02 pm

The fair way is for each person to pay his/her own expenses. In the case there is a single bill, such as mortgage and insurance on a jointly owned house or paying for a hotel room jointly occupied, the expense should be split. It might be a practical compromise that the grocery bill be split as maintaining separate shelves of food and cooking separate meals would be penny ante complicated. I would not go so far as to charge my partner for rides in my car if that were the one most often driven when traveling together. Decisions to spend money on a joint expense, such as who to hire for a new roof and how much to pay would have to be a mutual decision and the cost split.

I would argue very strongly that if the relationship wants to "split" things then how much either party earns has nothing to do with what each party should spend. If one of the partners is unemployed they had better have savings or some income stream to use to support themselves.

delamer
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Re: Fair way to split expenses?

Post by delamer » Wed Nov 15, 2017 6:11 pm

Pretzel lover wrote:
Wed Nov 15, 2017 4:00 pm
Spouse and I always just have one pot of money.

Splitting expenses? It’s all the same money. Doesn’t matter if there is a difference in what each person makes.

Many problems can occur if a couple doesn’t have the same financial priorities. This should be fully understood before getting married. That way there are no surprises.
Our viewpoint also.

The mechanics aren't as important as having common goals. A system that you both agree on will make life easier, but it won't solve your financial issues if you don't come to an agreement on priorities. Each spouse can certainly have an allowance that s/he isn't accountable for -- and those amounts don't have to be the same -- but the amount should be set together.

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Pretzel lover
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Re: Fair way to split expenses?

Post by Pretzel lover » Wed Nov 15, 2017 6:13 pm

Yep, I guess I lucked out twice on financial, as well as, marital bliss (first spouse passed away from cancer). It's always been a simple one pot strategy.

You're married so everything is shared has been the approach. Whatever works for a couple...

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dm200
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Re: Fair way to split expenses?

Post by dm200 » Wed Nov 15, 2017 6:22 pm

There are, however, some marital "situations" (known some) where one spouse is not nice and fair to the other - so the unfairly treated spouse really needs to keep secrets from the other. Often, this unfairness extends to children. I know of several such situations that happened in my extended family.

delamer
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Re: Fair way to split expenses?

Post by delamer » Wed Nov 15, 2017 6:32 pm

dm200 wrote:
Wed Nov 15, 2017 6:22 pm
There are, however, some marital "situations" (known some) where one spouse is not nice and fair to the other - so the unfairly treated spouse really needs to keep secrets from the other. Often, this unfairness extends to children. I know of several such situations that happened in my extended family.
The situations you describe prove the point that if you don't treat your spouse fairly, no system of joint, individual, or some combination of accounts is going to make up for that basic problem.

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dm200
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Re: Fair way to split expenses?

Post by dm200 » Wed Nov 15, 2017 6:34 pm

delamer wrote:
Wed Nov 15, 2017 6:32 pm
dm200 wrote:
Wed Nov 15, 2017 6:22 pm
There are, however, some marital "situations" (known some) where one spouse is not nice and fair to the other - so the unfairly treated spouse really needs to keep secrets from the other. Often, this unfairness extends to children. I know of several such situations that happened in my extended family.
The situations you describe prove the point that if you don't treat your spouse fairly, no system of joint, individual, or some combination of accounts is going to make up for that basic problem.
I think there were some "mental health issues" involved in those family situations of certain relatives.

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DanMahowny
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Re: Fair way to split expenses?

Post by DanMahowny » Wed Nov 15, 2017 7:20 pm

trustquestioner wrote:
Wed Nov 15, 2017 3:59 pm
All our income flows into a joint checking account for bill pay, etc. Anything large is discussed; all taxable investment accounts are also joint (funded from checking). No issues.
This describes our situation as well.

23+ years of marriage. No arguments about money. Ever.

We are a team. It's OUR money.
Funding secured

pennywise
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Re: Fair way to split expenses?

Post by pennywise » Wed Nov 15, 2017 9:06 pm

bloom2708 wrote:
Wed Nov 15, 2017 11:37 am
Use the ratio of your take home pay. If you do not make the same, 50-50 doesn't work.

You make $5,000 per month, she make $6,000 per month (take home pay). You pay 45%, she pays 55%.

Assuming you are both contributing the same percentage to 401k plans and things like that.

As you have pointed out, there are a lot of "gotchas" with any plan. Roth contributions, HSA, college savings, car funds, vacations.

What do you do with bonuses? Same ratio? Maybe you each keep an amount and the balance is deposited in the joint account for bills.

Trial and error. Do whatever works. Adjust. Communicate. Audit.
+1 on both financial arrangements and the very wise final advice. We've long done the proportional deposit to a joint account and remainder to our personal accounts and it's worked out fine. Admittedly this started because of a major schism in our attitudes about spending; my husband has a very, very difficult time spending money (seriously, even his mother often said he was way too skinflint for anyone to live with!) so this was a way he could feel secure about 'his' money, and I always managed the joint account so I felt secure that we had resources to spend--it was on me if we didn't! After 30+ years we have now come full circle in that our take home pay is all going into the joint account and that's what feels right for our life now.


I think in our case because our priorities aligned on the biggest expenses it worked out ok but it's really most important to communicate and work as a team.

pennywise
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Re: Fair way to split expenses?

Post by pennywise » Wed Nov 15, 2017 9:20 pm

DaftInvestor wrote:
Wed Nov 15, 2017 4:44 pm
In our case (as I stated above) one of us eventually dropped down to $0 income (wanted to raise our own kids)
FYI, stating that an individual who quits paid work is doing so to 'raise our own kids' is insulting to the many people who do not quit work and who also manage, mostly quite successfully in fact, to also raise their own kids.

Not sure why this canard that one must be unemployed (but yoked financially to a working partner-get those lazy welfare moms on the job!) to be a good parent is still floating around, but newsflash: you can indeed have a job and still raise your own kids.

sailaway
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Re: Fair way to split expenses?

Post by sailaway » Wed Nov 15, 2017 9:29 pm

Please take special note of how most long term arrangements end up evolving.

For splitting, what makes most sense to me is for the majority to go into the joint account, with equal amounts set aside for each individual.

For those who make a 50/50 split, are the chores also split 50/50? If so, by what measure?

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DaftInvestor
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Re: Fair way to split expenses?

Post by DaftInvestor » Wed Nov 15, 2017 9:35 pm

pennywise wrote:
Wed Nov 15, 2017 9:20 pm
DaftInvestor wrote:
Wed Nov 15, 2017 4:44 pm
In our case (as I stated above) one of us eventually dropped down to $0 income (wanted to raise our own kids)
FYI, stating that an individual who quits paid work is doing so to 'raise our own kids' is insulting to the many people who do not quit work and who also manage, mostly quite successfully in fact, to also raise their own kids.

Not sure why this canard that one must be unemployed (but yoked financially to a working partner-get those lazy welfare moms on the job!) to be a good parent is still floating around, but newsflash: you can indeed have a job and still raise your own kids.
I didn't mean to strike a nerve. Would it have been more appropriate to say "didn't want children to spend a majority of their weekdays with a nanny or day care provider whose values they may pick up rather than ours"?
Call the statement canard if you like - you can have your religious and belief system while I can have mine.

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yatesd
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Re: Fair way to split expenses?

Post by yatesd » Wed Nov 15, 2017 10:11 pm

pennywise wrote:
Wed Nov 15, 2017 9:20 pm
DaftInvestor wrote:
Wed Nov 15, 2017 4:44 pm
In our case (as I stated above) one of us eventually dropped down to $0 income (wanted to raise our own kids)
FYI, stating that an individual who quits paid work is doing so to 'raise our own kids' is insulting to the many people who do not quit work and who also manage, mostly quite successfully in fact, to also raise their own kids.

Not sure why this canard that one must be unemployed (but yoked financially to a working partner-get those lazy welfare moms on the job!) to be a good parent is still floating around, but newsflash: you can indeed have a job and still raise your own kids.
Recommend therapy...we all have the same 24 hours, everything in life involves compromises. It is important to choose your own priorities.

Placing all the money in one pot and paying the bills is most efficient for us. Having one spouse stay at home and be more accessible for family needs has also been a priority even though it entails financial compromises.

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bottlecap
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Re: Fair way to split expenses?

Post by bottlecap » Wed Nov 15, 2017 10:27 pm

I can't imagine that there is any other way to do it than 50/50.

You can have separate accounts, but in the end, isn't that (50/50) what marriage is supposed to be?

JT

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bottlecap
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Re: Fair way to split expenses?

Post by bottlecap » Wed Nov 15, 2017 10:30 pm

sailaway wrote:
Wed Nov 15, 2017 9:29 pm
For those who make a 50/50 split, are the chores also split 50/50? If so, by what measure?
And this is a great example of why it can only be 50/50. When you start keeping score and deciding who deserves more because of their various monetary and non-monetary contributions, all you will wind up with is resentment.

JT

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ClevrChico
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Re: Fair way to split expenses?

Post by ClevrChico » Wed Nov 15, 2017 10:43 pm

I recommend a free app called SplitWise, which is designed to track this effortlessly. There's no need for a joint account, as you can periodically settle the balance, and record it in the app. Keep it simple.

https://www.splitwise.com/

2m2037
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Re: Fair way to split expenses?

Post by 2m2037 » Wed Nov 15, 2017 10:58 pm

ClevrChico wrote:
Wed Nov 15, 2017 10:43 pm
I recommend a free app called SplitWise, which is designed to track this effortlessly. There's no need for a joint account, as you can periodically settle the balance, and record it in the app. Keep it simple.

https://www.splitwise.com/
We've used this on road trips with friends, but to use this every single day in a lifetime of marriage sounds... I don't know. Really?? To each (couple) their own I guess. I'd rather spend each 10 seconds making an entry on a cuddle and a kiss. :happy

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ClevrChico
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Re: Fair way to split expenses?

Post by ClevrChico » Wed Nov 15, 2017 11:11 pm

imperio wrote:
Wed Nov 15, 2017 10:58 pm
ClevrChico wrote:
Wed Nov 15, 2017 10:43 pm
I recommend a free app called SplitWise, which is designed to track this effortlessly. There's no need for a joint account, as you can periodically settle the balance, and record it in the app. Keep it simple.

https://www.splitwise.com/
We've used this on road trips with friends, but to use this every single day in a lifetime of marriage sounds... I don't know. Really?? To each (couple) their own I guess. I'd rather spend each 10 seconds making an entry on a cuddle and a kiss. :happy
Different life experiences for different folks. :-) To stay on topic, I think SplitWise would help OP.

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Watty
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Re: Fair way to split expenses?

Post by Watty » Wed Nov 15, 2017 11:26 pm

You should probably have a lawyer formalize whatever you decide on since if you divorce what the courts think is fair might be much different that what you think is fair.

randomguy
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Re: Fair way to split expenses?

Post by randomguy » Wed Nov 15, 2017 11:32 pm

bottlecap wrote:
Wed Nov 15, 2017 10:27 pm
I can't imagine that there is any other way to do it than 50/50.

You can have separate accounts, but in the end, isn't that (50/50) what marriage is supposed to be?

JT
You lack imagination.:) There are tons of people that are more comfortable with some split. It might seem crazy to you. And it sure does to me when I hear about couples who have been married 30 years splitting bills but it works for them. The OP has stated that the current scheme isn't working for them. Trying something else is a reasonable thing to try.

People have pointed out that there can be some legal issues about how separate (think divorce and lawsuits) the money really is. That can be in issue if that is a concern. If it is more she just wants you to stop whining that she spends 50 bucks on a hair cut, you might not need to be formal. If you are worried that when you get divorced she is getting half your 401(k) and checking account, you need a post nup.

TheNightsToCome
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Re: Fair way to split expenses?

Post by TheNightsToCome » Thu Nov 16, 2017 12:07 am

Zach82 wrote:
Wed Nov 15, 2017 11:22 am
All,

In order to prevent future fights and difficulties with money, my wife and I have decided to have separate bank accounts and funnel money to a joint account that auto pays our bills. I would like to ask advice from those who have done anything remotely similar as to the best way to determine how much each spouse contributes? How do we handle family vacations etc? I do not need advice or opinions if this is a good idea or not in a marriage. This IS what we will do...just would like anyone with experience or knowledge how to make this fair and workable.

Thanks,
Zach
I earn the money and my wife pays the bills from the joint checking account where my paychecks are deposited. We never fight about money. My wife loves that I provide her with a life of leisure, and I love being able to provide that for her.

truenorth418
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Re: Fair way to split expenses?

Post by truenorth418 » Thu Nov 16, 2017 12:16 am

50/50. Marriage is an equal partnership.

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celia
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Re: Fair way to split expenses?

Post by celia » Thu Nov 16, 2017 2:03 am

We have a checking account for joint expenses and each of us gets the same dollar amount for "discretionary" expenses, that we each decide how it is to be spent. Who earned the money is irrelevant.

Then the question is what bills are paid out of each. The easy parts are joint household expenses and medical come out of joint money. Gifts for each other and solo travel/entertainment comes out of separate money. The other budget categories are linked to joint or separate based on what we mutually decide. Note that the joint account needs more money in it if more categories draw from it. The same is true if you put more spending categories under separate money.

TwstdSista
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Re: Fair way to split expenses?

Post by TwstdSista » Thu Nov 16, 2017 4:37 am

Husband and I have always lived off one paycheck and saved the other. It started that way easily since we had similar salaries when we got married (and then moved in together). Which paycheck we lived off of vs. saved has varied over the years, but it's worked for us.

We do have individual monthly "allowances" to spend on what we choose (me coffee, him hobbies) and we tend to take a "team" approach to finances. Our differences lie in where and how we want to save money, not if we want to save money, so that helps.

FWIW -- I had a kid (not his) and huge student loan debt when we got married, he had neither. But he rolled with it. Now the debt of gone, the kid is out of college and the husband works part-time. And life is good.

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TomatoTomahto
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Re: Fair way to split expenses?

Post by TomatoTomahto » Thu Nov 16, 2017 5:58 am

delamer wrote:
Wed Nov 15, 2017 5:51 pm
wrongfunds wrote:
Wed Nov 15, 2017 11:43 am
Write down what you think is fair on piece of paper. Have your wife do the same. Then take a match and burn your paper. Use her paper to decide how to split the expenses. Anybody who is married over 30 years will agree with me.
Wow! Speaking as a wife, I would never expect my husband to placate me that way.
Speaking as a husband, one of the things I never get accustomed to is the genial, but nevertheless off-putting, casual sexism on BH.

nativenewenglander
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Re: Fair way to split expenses?

Post by nativenewenglander » Thu Nov 16, 2017 6:37 am

truenorth418 wrote:
Thu Nov 16, 2017 12:16 am
50/50. Marriage is an equal partnership.
To do it any other way probably won't be a long term strategy. My wife and I have been married 19 years my wife uses whatever money she needs to pay our bills. My parents were married over 50 years and they split everything 50/50. My dad was the only breadwinner, mom was his support staff and loved the job. She kept the household going, he kept the checkbook filled.

racy
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Re: Fair way to split expenses?

Post by racy » Thu Nov 16, 2017 7:04 am

We have a joint account and separate personal accounts (both checking and investment). We agreed on how much personal money each would keep per month, the rest went into joint accounts. The Rule: have to agree on joint spending & investing, but 'no questions asked' about spending from or investing in personal. Has worked over 40 years for us.

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Re: Fair way to split expenses?

Post by goodenyou » Thu Nov 16, 2017 8:14 am

One pot of money here. Whatever works for you. I just don't understand how keeping score works. If we kept score, we would end up splitting assets and not expenses.
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benevo
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Re: Fair way to split expenses?

Post by benevo » Thu Nov 16, 2017 8:29 am

Zach82 wrote:
Wed Nov 15, 2017 11:22 am
All,

In order to prevent future fights and difficulties with money, my wife and I have decided to have separate bank accounts and funnel money to a joint account that auto pays our bills. I would like to ask advice from those who have done anything remotely similar as to the best way to determine how much each spouse contributes? How do we handle family vacations etc? I do not need advice or opinions if this is a good idea or not in a marriage. This IS what we will do...just would like anyone with experience or knowledge how to make this fair and workable.

Thanks,
Zach
We're pretty much 50/50. I make $11k more a year and am paid semimonthly vs he makes less and is paid biweekly - but, I have student loans and he doesn't, so it kinda evens out. I put in more per paycheck simply because I don't have those 2 magic 3-paycheck months, but it comes out even when calculated for the entire year.

For vacations, I took our most expensive/most unusual year (this past year, ahh) and divide by 12. That's what we save monthly for vacations/travel/etc.

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Watty
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Re: Fair way to split expenses?

Post by Watty » Thu Nov 16, 2017 8:58 am

randomguy wrote:
Wed Nov 15, 2017 11:32 pm
bottlecap wrote:
Wed Nov 15, 2017 10:27 pm
I can't imagine that there is any other way to do it than 50/50.

You can have separate accounts, but in the end, isn't that (50/50) what marriage is supposed to be?

JT
You lack imagination.:) There are tons of people that are more comfortable with some split. It might seem crazy to you.
Keeping finances separate is actually very common for people that have been through a prior divorce or get married later in life when they already have significant assets.

2Birds1Stone
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Re: Fair way to split expenses?

Post by 2Birds1Stone » Thu Nov 16, 2017 9:06 am

DaftInvestor wrote:
Wed Nov 15, 2017 4:38 pm
2Birds1Stone wrote:
Wed Nov 15, 2017 4:29 pm
I never liked the idea of contributing as a % of our income in our situation since we don't want kids. Why would one spouse subsidize the other? would you be more or less inclined to advance your career if your spouse would just pick up the slack for your lack of wage growth?
Because you and I have very different views of what marriage is all about. Its not about one spouse "subsidizing" the other financially - its about sharing a life together - having common goals in life and working together towards those common goals. When one spouse spends money on something they enjoy - the other actually shares in the joy in that they see the enjoyment in their spouse.
Its okay if you think differently - I'm just trying to explain another viewpoint.
I really appreciate your viewpoint, and it's definitely the more popular view.

You're 100% correct in saying that our definition of marriage is quite different. I'm a libertarian atheist, who really doesn't believe in the idea of church or government dictating the rules of a personal relationship. While I always hope for "happily ever after", the reality for many people is different. Bringing significantly more assets/income to the partnership, and having very different career goals (I work a high stress, moderately high paying job), and she has chosen lower paying jobs that are not as stressful. We split our housing costs 50/50, live in a very cheap apartment so that it's no strain for her financially, and then invest/save/spend on individual expenses at our discretion from our own money.

Maybe once married my viewpoint will change, but for now I will continue contributing more toward our vacations, weekend trips, eating out, etc. and keep my assets separate.

How do BH's who are not in the "one pot" camp feel about a pre-nup protecting premarital assets, followed by combining everything after marriage (outside of IRA/401k accounts)?

My concern is the power balance issue someone posted about upthread. Though our expenses are very similar (I am very frugal despite being higher earner), I just invest move heavily into 401k/HSA/Roth/Taxable.

mortfree
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Re: Fair way to split expenses?

Post by mortfree » Thu Nov 16, 2017 9:18 am

Watty wrote:
Thu Nov 16, 2017 8:58 am
randomguy wrote:
Wed Nov 15, 2017 11:32 pm
bottlecap wrote:
Wed Nov 15, 2017 10:27 pm
I can't imagine that there is any other way to do it than 50/50.

You can have separate accounts, but in the end, isn't that (50/50) what marriage is supposed to be?

JT
You lack imagination.:) There are tons of people that are more comfortable with some split. It might seem crazy to you.
Keeping finances separate is actually very common for people that have been through a prior divorce or get married later in life when they already have significant assets.
A married couple may not make the same amount of money so 50/50 may not even be possible mathematically.

They also have to account for the saver/spender dynamic if each person falls into opposite categories.

Both of the above drove us to keep things separate - otherwise the spender would have access to the saver's money.

No right or wrong way - personal finance at its best

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dumbbunny
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Re: Fair way to split expenses?

Post by dumbbunny » Thu Nov 16, 2017 9:34 am

Watty wrote:
Thu Nov 16, 2017 8:58 am
randomguy wrote:
Wed Nov 15, 2017 11:32 pm
bottlecap wrote:
Wed Nov 15, 2017 10:27 pm
I can't imagine that there is any other way to do it than 50/50.

You can have separate accounts, but in the end, isn't that (50/50) what marriage is supposed to be?

JT
You lack imagination.:) There are tons of people that are more comfortable with some split. It might seem crazy to you.
Keeping finances separate is actually very common for people that have been through a prior divorce or get married later in life when they already have significant assets.
Agree. I had inherited some money a couple years before our marriage and bought a house. She was divorced and her ex (unwisely) handled their money. When we got married, she wanted finances to be separate. Okay by me.
“It’s the curse of old men to realize that in the end we control nothing." "Homeland" episode, "Gerontion"

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Re: Fair way to split expenses?

Post by goodenyou » Thu Nov 16, 2017 9:45 am

The response to this thread appears to be dependent on whether you are in a first or second marriage (or third and greater) and with children from previous marriages. Commingling finances can get complicated in those situations. It is probably more important to be on the same page with spending and saving than how to divvy up expenses. Savers lose respect for spenders and it's downhill from there.
"Ignorance more frequently begets confidence than does knowledge" | "The best years you have left are the ones you have right now"

davegreen10
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Re: Fair way to split expenses?

Post by davegreen10 » Thu Nov 16, 2017 9:50 am

We tried budgeting for a bout a year but it never worked well. We finally scrapped that and implemented our system. Note- I bring home 2/3 of the income.

My responsibilities-Rent, utilities, phones and service, all insurance, max fund all retirement accounts (2x401k, 2x IRA, 2xHSA) , maintain emergency fund, my car.

DW responsibilities- Her car, groceries, clothes, dining out, vacations, gifts, discretionary spending

This has worked out well for us. As DW says, she's responsible for fun now, I'm responsible for fun someday. If her account is empty we are not allowed to spend any more. We seem to spend it all while paying the cards off in full each month.

It has also helped that I have been increasing my pay each year while expenses only bump a few percent. I actually spend a little discretionary on my own so I don't tax her budget. Of course my fun things are such as secretly paying down her car loan so it will be done in two years vs. five.

My frugality is balanced by the compromise of her making sure we are not too cheap; we spend some today rather than hoarding it all for a someday that may never come.

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bottlecap
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Re: Fair way to split expenses?

Post by bottlecap » Thu Nov 16, 2017 9:58 am

dumbbunny wrote:
Thu Nov 16, 2017 9:34 am
Watty wrote:
Thu Nov 16, 2017 8:58 am
randomguy wrote:
Wed Nov 15, 2017 11:32 pm
bottlecap wrote:
Wed Nov 15, 2017 10:27 pm
I can't imagine that there is any other way to do it than 50/50.

You can have separate accounts, but in the end, isn't that (50/50) what marriage is supposed to be?

JT
You lack imagination.:) There are tons of people that are more comfortable with some split. It might seem crazy to you.
Keeping finances separate is actually very common for people that have been through a prior divorce or get married later in life when they already have significant assets.
Agree. I had inherited some money a couple years before our marriage and bought a house. She was divorced and her ex (unwisely) handled their money. When we got married, she wanted finances to be separate. Okay by me.
I understand that people sometimes keep finances separate. The question was how to split expenses.

My suggestion was to divide income and expenses evenly.

Have your separate accounts, but in marriage, income and expenses should be split evenly, especially if the goal is to avoid strife.

There’s might be some exceptions, but the OP hasn’t indicated any that would apply.

JT

Naismith
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Re: Fair way to split expenses?

Post by Naismith » Thu Nov 16, 2017 10:09 am

A paycheck or other income is only one way of contributing to the family finances. I'm glad that my partner recognizes my other contributions.

Because of our differing jobs, I have more ability to save in tax-deferred, since I can contribute to both a 403(b) and 457. So there are times that I got less than $200 per month net, but we were able to save more for retirement.

I have chosen and been able to be employed part-time during most of our marriage, because I am an excellent household manager. So I am often the one who is there to greet a plumber or other repair person. I am very good at stripping wallpaper and painting. And I do most of the cleaning and cooking and laundry, etc. Also taking the cars in for maintenance and repairs, getting second quotes on insurance, researching investments, etc. That is even without those hectic child-rearing years of teaching kids to drive, etc.

Plus my husband earns more than he might have because of my ability and willingness to support him in his work. A major milestone in his career happened as a result of moving our family to South America for his research. I had to homeschool our high schoolers (fortunately both girls were doing Algebra II) and teach a graduate seminar on preparing scientific manuscripts in English (to pay back a local college for providing lab space and access to equipment). None of his colleague's wives were able to take off 6 months from their own careers for that kind of adventure. And he continued to travel around the world a lot during those early years of career-building. Even in the years I had no income, I was not dependent on him; we were interdependent. He could not have done that particular job and be a dad without my support.

I know women who would love to have a second child, or spend more time with the child they have, but their husband insists that they "pull their own weight," with only income-earning recognized as work. The wife may sew all the curtains in the house, save hundreds of dollars each month by couponing and scratch cooking, but in a male-normative view, that is not "work." I shudder at such notions of egalitarianism.

Even if there are no children involved, elder care is another unpaid task that may require a lot of time and should be recognized as a valid contribution.

Texanbybirth
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Re: Fair way to split expenses?

Post by Texanbybirth » Thu Nov 16, 2017 10:22 am

goodenyou wrote:
Thu Nov 16, 2017 9:45 am
The response to this thread appears to be dependent on whether you are in a first or second marriage (or third and greater) and with children from previous marriages. Commingling finances can get complicated in those situations. It is probably more important to be on the same page with spending and saving than how to divvy up expenses. Savers lose respect for spenders and it's downhill from there.
That's a great observation from this thread. And from a hockey player, of course! :beer

wrongfunds
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Re: Fair way to split expenses?

Post by wrongfunds » Thu Nov 16, 2017 10:26 am

Does she file her own taxes? If you are filing jointly and she is signing the tax returns, you both know each others salary.
The response to this thread appears to be dependent on whether you are in a first or second marriage (or third and greater) and with children from previous marriages.
It also depends upon whether the person considers their current marriage to be the last one or possibly a stepping stone to the next one. Expense splitting and asset splitting becomes crucial when you have later outlook.

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TomatoTomahto
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Re: Fair way to split expenses?

Post by TomatoTomahto » Thu Nov 16, 2017 10:27 am

Naismith wrote:
Thu Nov 16, 2017 10:09 am
A paycheck or other income is only one way of contributing to the family finances. I'm glad that my partner recognizes my other contributions.

I know women who would love to have a second child, or spend more time with the child they have, but their husband insists that they "pull their own weight," with only income-earning recognized as work. The wife may sew all the curtains in the house, save hundreds of dollars each month by couponing and scratch cooking, but in a male-normative view, that is not "work." I shudder at such notions of egalitarianism.
I was so with you, until you made the specific gender reference. I was making $2xx,xxx+ when I decided to become a SAHD (stay at home Dad). My wife appreciated the "work" I did in raising our kids (we obviously raised them together, but I was home for more hours), managing our finances, running errands and managing our home, cooking, etc., although I have to admit that I never did any couponing or curtain sewing.

Before anyone chimes in with how much my income, if earned and saved, would have compounded to, let me say that my wife's income rose quickly enough to more than make up for what we "lost" by my staying home. We didn't plan for it or expect it, and would have made the same decision if it hadn't come true, but it was surprising how high she could fly when not having to worry so much about the kids when she wasn't home.

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TomatoTomahto
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Re: Fair way to split expenses?

Post by TomatoTomahto » Thu Nov 16, 2017 10:30 am

Texanbybirth wrote:
Thu Nov 16, 2017 10:22 am
goodenyou wrote:
Thu Nov 16, 2017 9:45 am
The response to this thread appears to be dependent on whether you are in a first or second marriage (or third and greater) and with children from previous marriages. Commingling finances can get complicated in those situations. It is probably more important to be on the same page with spending and saving than how to divvy up expenses. Savers lose respect for spenders and it's downhill from there.
That's a great observation from this thread. And from a hockey player, of course! :beer
Yes! My wife and I don't really pay attention to whose account something comes out of, except that, without any insistence from her, I prefer taking whatever I spend on the children of my first marriage from my personal account.

Hockey, of course, rules!

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market timer
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Re: Fair way to split expenses?

Post by market timer » Thu Nov 16, 2017 10:36 am

DW and I have been together almost 20 years with separate finances. I prefer to be able to control how I spend my income without consulting my wife. We have very different values (I much prefer a good meal and travel, she's more into fashion). Having separate finances means we don't judge each other as much as if we were spending from the same pool of savings.

Regarding expenses, I cover the main recurring expenses--rent, food, private school tuition, childcare, vacations--and she covers ad hoc expenses for the kids--clothes, health care, toys, etc. My income is much higher and most of it goes to savings for a potential early retirement or as seed capital for a business. I like being able to decide on my own whether I continue working or start a business.

jerryk68
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Re: Fair way to split expenses?

Post by jerryk68 » Thu Nov 16, 2017 11:18 am

goodenyou wrote:
Thu Nov 16, 2017 9:45 am
The response to this thread appears to be dependent on whether you are in a first or second marriage (or third and greater) and with children from previous marriages. Commingling finances can get complicated in those situations. It is probably more important to be on the same page with spending and saving than how to divvy up expenses. Savers lose respect for spenders and it's downhill from there.
Interesting thread. I am coming from another prospective:

Both retired now second marriage (15 years so far) with us both having grown children and grandchildren. Basically funds earned prior to the marriage are separate. Pension and SS deposited into one account to live on and even save a little. She spends the most but manages the funds well. Small gifts (Christmas, birthdays, etc) to kids and grandkids are almost equal and always within a few bucks . Retirement funds earned by one or both during the marriage is owned by both. Inheritances were kept separate.

Retirement funds earned prior to the marriage is separate to spend on whatever or on whomever each wants without input from each other. That money occasionally goes mostly to the grown kids (car down payment, etc). Joint funds that we have saved together goes to whoever survives, her retirement funds earned prior to the marriage go to her kids when she dies, my retirement funds earned prior to the marriage go to my kids when I die.

I did not buy into her house when we married (couldn’t agree on price) but we pay the mortgage ($400), maintenance and improvements out of joint funds. The house goes to her kids after I die if I live longer. This is probably not legally enforceable but I’m sure it will happen if she precedes me in death. My wife promises to come back and haunt her kids if I get thrown out on my ear.

I am the stepfather but I consider myself a close step-grandfather just like she has become a very close step-grandmother. Her maintenance hair, nails , clothes, etc, significantly higher then my maintenance but that’s why they call it marriage. I really feel lucky to have found her.

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Doom&Gloom
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Re: Fair way to split expenses?

Post by Doom&Gloom » Thu Nov 16, 2017 11:24 am

davegreen10 wrote:
Thu Nov 16, 2017 9:50 am
We tried budgeting for a bout a year but it never worked well. We finally scrapped that and implemented our system. Note- I bring home 2/3 of the income.

My responsibilities-Rent, utilities, phones and service, all insurance, max fund all retirement accounts (2x401k, 2x IRA, 2xHSA) , maintain emergency fund, my car.

DW responsibilities- Her car, groceries, clothes, dining out, vacations, gifts, discretionary spending

This has worked out well for us. As DW says, she's responsible for fun now, I'm responsible for fun someday. If her account is empty we are not allowed to spend any more. We seem to spend it all while paying the cards off in full each month.

It has also helped that I have been increasing my pay each year while expenses only bump a few percent. I actually spend a little discretionary on my own so I don't tax her budget. Of course my fun things are such as secretly paying down her car loan so it will be done in two years vs. five.

My frugality is balanced by the compromise of her making sure we are not too cheap; we spend some today rather than hoarding it all for a someday that may never come.
I like this system. Very creative imo! I think that something similar would have worked quite well for us had we not stumbled on another plan that did.
wrongfunds wrote:
Thu Nov 16, 2017 10:26 am
Does she file her own taxes? If you are filing jointly and she is signing the tax returns, you both know each others salary.
The response to this thread appears to be dependent on whether you are in a first or second marriage (or third and greater) and with children from previous marriages.
It also depends upon whether the person considers their current marriage to be the last one or possibly a stepping stone to the next one. Expense splitting and asset splitting becomes crucial when you have later outlook.
Worst example I personally know: DW has a friend who re-married recently. The couple each have grown kids and young grandchildren, but husband and wife had very different experiences with their previous marriages. The last I heard both were still refusing to disclose their SS# to the other. I am eagerly anticipating the entertainment that next April brings! It is not at all surprising to DW or me that they are having financial difficulties.

2m2037
Posts: 203
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Re: Fair way to split expenses?

Post by 2m2037 » Thu Nov 16, 2017 11:49 am

Naismith wrote:
Thu Nov 16, 2017 10:09 am
A paycheck or other income is only one way of contributing to the family finances. I'm glad that my partner recognizes my other contributions.

Because of our differing jobs, I have more ability to save in tax-deferred, since I can contribute to both a 403(b) and 457. So there are times that I got less than $200 per month net, but we were able to save more for retirement.

I have chosen and been able to be employed part-time during most of our marriage, because I am an excellent household manager. So I am often the one who is there to greet a plumber or other repair person. I am very good at stripping wallpaper and painting. And I do most of the cleaning and cooking and laundry, etc. Also taking the cars in for maintenance and repairs, getting second quotes on insurance, researching investments, etc. That is even without those hectic child-rearing years of teaching kids to drive, etc.

Plus my husband earns more than he might have because of my ability and willingness to support him in his work. A major milestone in his career happened as a result of moving our family to South America for his research. I had to homeschool our high schoolers (fortunately both girls were doing Algebra II) and teach a graduate seminar on preparing scientific manuscripts in English (to pay back a local college for providing lab space and access to equipment). None of his colleague's wives were able to take off 6 months from their own careers for that kind of adventure. And he continued to travel around the world a lot during those early years of career-building. Even in the years I had no income, I was not dependent on him; we were interdependent. He could not have done that particular job and be a dad without my support.

I know women who would love to have a second child, or spend more time with the child they have, but their husband insists that they "pull their own weight," with only income-earning recognized as work. The wife may sew all the curtains in the house, save hundreds of dollars each month by couponing and scratch cooking, but in a male-normative view, that is not "work." I shudder at such notions of egalitarianism.

Even if there are no children involved, elder care is another unpaid task that may require a lot of time and should be recognized as a valid contribution.
I love this post. As a soon-to-be husband, I'll keep this in mind. Thank you :beer

fourkids
Posts: 132
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Re: Fair way to split expenses?

Post by fourkids » Thu Nov 16, 2017 12:18 pm

separate accounts is possible and can work, as long as you both always remember that marriage is a partnership and you don't nickel and dime each other.

My husband and I never set up a joint account. We still have our individual accounts, and roughly split up bills based on % of income earned.
I earn more, so I pay the mortgage, and he pays all the other bills. Over time as our incomes and family size have changed, we've reevaluated.
For instance, he pays for childcare, but I took on the Gas and Electric bill.
I usually pay for vacations, because I end up with more disposable income.
Honestly, I would have opened a joint account years ago, but he likes to feel like he is directly contributing to the household.
Luckily we are both moderately thrifty and don't splurge much, so we don't have fights about money often.

targ
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Re: Fair way to split expenses?

Post by targ » Thu Nov 16, 2017 12:32 pm

You have half of your pay deposited in your account, half in hers.
She has half her pay deposited in her account, half in yours.
You have a joint account that pays for all joint expenses.
At the end of the month, you each re-fund the joint account 50/50 for whatever it spent.

Doing this allows you to honor that you are a couple by sharing all income and joint expenses evenly. You will have to talk to each other about those joint purchases and act like a couple.

But at the same time, you can respect that you are individuals with differing ideas and approaches to things. What you spend from your account is your business, what she spends from hers is her business. But your joint payback has to have priority.

If one of you becomes unemployed or decides to stay at home, you still do the same thing, still have the separate and joint accounts. You both take the financial hit, but you both still work together as a couple on joint things and still can be individuals on non-joint things.
The capacity to learn is a gift; The ability to learn is a skill; The willingness to learn is a choice. | -REBEC OF GINAZ

523HRR
Posts: 111
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Re: Fair way to split expenses?

Post by 523HRR » Thu Nov 16, 2017 12:35 pm

fourkids wrote:
Thu Nov 16, 2017 12:18 pm
separate accounts is possible and can work, as long as you both always remember that marriage is a partnership and you don't nickel and dime each other.

My husband and I never set up a joint account. We still have our individual accounts, and roughly split up bills based on % of income earned.
This is pretty much what we do. We've been happily married for 21 years and have never had a joint account. I pay some bills...my wife pays other bills. We don't bother to keep score and cannot remember ever having an argument over money. We manage asset allocations for investments in the aggregate, and we each have reciprocal living trusts for estate planning.

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