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Early Retirement Extreme Forums » Friends & Family Questions

1. 

   hickchick
   

   Journeyman
   Joined: Jul '10
   Posts: 142

   My husband and I do not split our bills in half. Since there is a significant income disparity, we pay them as a percentage based on income. I feel like it helps keep things fair.

   Of course, this only applies to joint expenditures. He's on his own with the car. ;)

   If I was making a lot less than my SO while paying the same nominal amount for bills I'd be pretty upset if he decided to start saving for ERE for himself and left me to fend for myself.

   So, do you split your bills in half? Do you think that's fair? More importantly, does your SO?

   Posted 1 year ago #
2. 

   Suzanne
   

   Novice
   Joined: Jul '11
   Posts: 27

   Me and my boyfriend have lived together for 2 years now. He has a job while I am still in college, so we have decided to start splitting the bills from now on. We both think this is fair: he was feeling uncomfortable in the old setup (50-50 splitting of costs) and frankly, so was I! We pay a percentage that is needed to cover shared expenses (food, rent, insurance) and the rest is for each to keep and spend as we want. The car is his to pay (and to decide on), but I pay half the gas for the miles he makes 'for me'(going to family together, getting heavier groceries we both use).
   I think this is fair because:
   - We found a middle ground on housing: I cannot go get a cheap single room appartment in a shared complex and he cannot get a two bedroom one since I would not be able to afford that now. Because of the splitting we can get the compromise: one bedroom cheap apartment. Without either of us feeling ripped off.
   - He gets to buy 'luxurious' things if he wants that (from the money that isn't needed for shared costs). He still gets to keep a larger percentage of income than I: that seems fair since he is the one working full time now. But I can easily pay the bills we have and control how much I spend on myself.

   We live in the Netherlands and it is fairly common here to do it this way. My parent do another version of this: each deposit his or hers total income into a joined account and they 'give eachother spending money': a fixed amount to pay hobbies, clothes etc. etc. Me and my boyfriend chose not to do it this way, because I do not have need for the same amount for clothes and hobbies as he (thinks he) does.

   Posted 1 year ago #
3. 

   KisKis
   

   Novice
   Joined: Mar '11
   Posts: 13

   This is purely my judgmental opinion, since my husband and I do not split bills at all, but I don't understand the splitting based on percentage of income. That seems like punishment for the person who makes more, unless the other spouse took a lower paying job for other reasons (does more chores, time spent with kids, etc.). If anything, splitting based on percentage of use would make more sense. DH and I have very similar incomes and very similar financial philosophies, so luckily, we have never had any issues with completely joining finances. Basically, he comes home from work, hands me his paycheck and thinks nothing else of it.

   Posted 1 year ago #
4. 

   Mr. Overlord
   

   Apprentice
   Joined: Sep '10
   Posts: 48

   I agree with KisKis that if two people are married and they're both ERE minded, there's no need to worry about how to split the bills because they're also sharing income. Also, even if I made more money than my spouse and was able to save more quickly than her, I would not enjoy going ERE alone and letting her continue to work until she gets there (assuming of course that she wanted to be ERE too). For us it doesn't matter who pays the bills because we're both pooling our savings to reach a combined amount that will allow both of us to be ERE.

   If my spouse weren't interested in ERE and I made a lot more than her, I'd use the percentage based approach rather than splitting equally because I wouldn't want to see her struggle to pay the bills.

   Posted 1 year ago #
5. 

   S
   

   Journeyman
   Joined: Jul '10
   Posts: 288

   I work fulltime and my husband does not. We joke that he's my "Executive Assistant". The only bill I require him to pay on his own is his child support which he covers with seasonal work. He contributes by keeping our expenses low, doing chores, planning social stuff, etc. It irritates me when people imply I'm "being taken advantage of", however they wouldn't bat an eye if I was a housewife making the same kind of contributions he makes. The plan is for me to eventually ERE and him to continue doing the part-time/seasonal thing. It's hard to tell if his not working is hurting or helping us save money faster. On the one hand I pay for his food and healthcare, but he's responsible for finding us free/cheap housing which is probably worth more in the end.

   Posted 1 year ago #
6. 

   akratic
   

   Master
   Joined: Jul '10
   Posts: 480

   Here's how I do it with my girlfriend:

   I wanted to split a 1BR that was $825/mo

   She wanted to split a studio that was $650/mo

   I got my way with the 1BR, but she got to lock-in the studio rate. So for rent she pays $325/mo and I pay $500/mo

   We split the utilities 50/50.

   My girlfriend is actually signficantly more frugal than I am on an absolute scale, she only has a lower savings rate because her skills are less monetizable and she opted to keep her soul.

   I'm not sure how things would change if we got married.

   Posted 1 year ago #
7. 

   Hoplite
   

   Master
   Joined: Dec '10
   Posts: 489

   FWIW, unless splitting up is a real possibility or there are other really good reasons why things are separate, I think that the accounting and shuffling of money from one account to another becomes a bit futile; a lot of lateral motion and no forward progress. The object should be to bring in money from the outside to the inside, and keep it inside; it really doesn't pay to lose focus on the object by over-analyzing the internal divisions.

   Posted 1 year ago #
8. 

   jacob
   

   Expert
   Joined: Jul '10
   Posts: 3,295

   We have prenuptially agreed to keep savings separate. We also agreed to split all taxable income 50/50 to make it easy to file joint for taxes without setting up some elaborate accounting scheme to figure out who's responsible for how much of the taxes given their income. We have a joint account that receives all this income. This account pays shared facilities. We compromise on what falls under this. For instance, I pay half the car even though my use of the car is <5%. DW pays half the internet even though I use 99% of it. DW pays her own cell phone. I pay for tools even though they are used to fix the house. Our RV is bigger than what I wanted and smaller than what DW wanted.

   Surplus in the joint account gets split 50/50 and goes into our respective savings accounts. This made sense at the time (or the marriage) and was done to make it easy (no hard feelings "after everything I've done for you") to split up in case we fall into the 40-50% of all couples who eventually divorce. We wanted to make it fair so that neither side would feel taken advantage off---so that's the perspective I have for the reasons for the setup.

   Now, in terms of splitting income, I'm still in the lead. Historically I've contributed more cumulatively speaking than DW has although given that I now make less than DW, this will eventually change. At this point, we may renegotiate. In particular, I would feel like I'm keeping DW back from saving due to the 50/50 split even as I already got enough money.

   I totally agree with S in that there's a gender bias. While I can pay all my expenses and almost all of DW's expenses with a SWR out of my savings, I sometimes get comments from internet clowns that "my retirement = DW working". Incidentally, these guys would have no issue if I was the one working and DW stayed at home. Gender bias at its finest. I'd dearly love for DW to become FI too (will happen in a few years) and stop working just to shut this group up.

   Posted 1 year ago #
9. 

   dragoncar
   

   Expert
   Joined: Oct '10
   Posts: 1,287

   Yes, I think it is fair to split evenly (assuming even use). As for splitting, how do you feel about this scenario:

   SO earns a lot more, so he pays 90% of expenses. Then he goes ERE. Now he earns almost nothing, and you pay 90% of the expenses.

   To me, it seems simpler to just split it -- however, I understand why people use alternative methods.

   Posted 1 year ago #
10. 

    buzz
    

    Journeyman
    Joined: Sep '10
    Posts: 115

    A little off topic, but I have never met a woman who doesn't bawk at the very mention of "prenup"

    As my SO and I get more serious and consider marriage, I want to be certain there is one in place, for the same reason as Jacob, in case we fall into the 50% who divorce.

    This isn't being untrusting, or unloyal, but try convincing a woman of that! (I have not tested the waters with my SO, that conversation is probably another year away at least, but I have surveyed female friends who are fairly intelligent)

    Posted 1 year ago #
11. 

    JohnnyH
    

    Expert
    Joined: Jul '10
    Posts: 1,363

    Paying utilities, rent, so forth never really bothered me (assuming no energy waste). Even if I was paying it all.

    Separate accounts are an absolute must, however. I will not subsidize foolish consumer spending... Which is rampant and ubiquitous with women I date. ;) I seem to be attracted to my opposite.

    Must be nice to be a frugal couple with similar goals, rather than internal tension.

    Posted 1 year ago #
12. 

    dot_com_vet
    

    Master
    Joined: Jan '11
    Posts: 376

    We split 50/50 (identical salaries) using this cloud based app:

    http://www.ioweyou.co.uk/

    Very easy to use, we no longer have to divide up bills. We usually settle up about twice/year.

    It streamlines our finances so well and makes things fair.

    Posted 1 year ago #
13. 

    Mirwen
    

    Journeyman
    Joined: Jun '11
    Posts: 169

    I have a hard time understanding how two people who are married can split expenses. Aren't you just roommates in that case? I guess if it works for you that's fine. I can't even conceptualize mine/yours after 9 years of marriage; it's all just ours. All income goes into a joint account, we buy what we need, we discuss any extra spending over about $20 before we make the purchase. We haven't had a single argument over money, ever. I guess this only works if you are both like minded and agreeable. I hope you have all married someone who fits that criteria.

    Posted 1 year ago #
14. 

    dragoncar
    

    Expert
    Joined: Oct '10
    Posts: 1,287

    A married coupled that splits expenses is obviously more than just roommates. Besides having committed to spending your life with your spouse, there are many benefits (see http://www.nolo.com/legal-encyclopedia/marriage-rights-benefits-30190.html).

    For people that think sharing all assets is the whole point of marriage (I'm not saying mirwen falls into this category, but that's the tone I got from the post), maybe they should reflect on their reasons for getting married.

    Posted 1 year ago #
15. 

    HSpencer
    

    Master
    Joined: Jul '10
    Posts: 770

    I echo dragoncar on this one. There are myriad of considerations for being married. One of these is "yours" and "mine" are combined into "ours". There is great complexity in marriages that are successful. Joint ownership is the key.
    One fails, both fail. To do less than this, the marriage in it's entirety is incomplete. "And the two shall become as one".
    I do realize that the year is 2011, and a lot of traditional thinking and moral standards are obsolete for many people. However, it should be considered just what exactly the marriage agreement really means. And to be successful either individually (if that is your operational intention) or successful as a "couple", then you need to understand the entire thing. I will not go on in my writing, as someone on here will be aiming to "nail" me for being a traditional thinking old fool, if they already don't have enough ammo with what I have said. Yes, I know it's 2011, and a lot of people want to temp "hook-up", but financially, that is not what I am talking about.

    Posted 1 year ago #
16. 

    jennypenny
    

    Expert
    Joined: Jul '11
    Posts: 1,338

    @Buzz--I agree that most women hate/fear prenups. Most will complain that it's because the man is getting married with his eye on the door. I think there are two main fears underlying that: (1) women still usually make less than men so a prenup will generally lower the amount of money a woman keeps after a divorce but raise the amount of money a man keeps, and (2) if the marriage produces children, the woman will usually end up with physical custody. This means the woman will have children to pay for--children that may restrict the amount of money that can be earned in income by limiting job prospects--and less money from the marriage to pay for the resulting situation.

    I'm not saying this is right or fair or reasonable or even a usual occurance anymore. But this is what many women fear and you'd better have your counterpoints lined up when you bring this up with your SO ;)

    Posted 1 year ago #
17. 

    Mirwen
    

    Journeyman
    Joined: Jun '11
    Posts: 169

    I didn't mean to imply that joint ownership was the only benefit of marriage, but an essential one. I believe that if you want to function as an individual monetarily, you shouldn't get married. That's just my personal opinion. It may be colored by the fact that I have always lived in community property states.

    As a person of Libertarian principle I don't think that my personal opinion should affect how other people live. I just wanted to share a different point of view.

    Posted 1 year ago #
18. 

    dot_com_vet
    

    Master
    Joined: Jan '11
    Posts: 376

    A lot of my friends think it's (very) odd we split expenses too.

    Here's our reasons. Married later in life, both have high education, both brought significant assets. We have zero debt, own our own house, etc.

    Splitting expenses is fair and money is not an issue. We can buy want we want at any time, although we have a high savings rate. I'd like to think it keeps us from buying unneeded items form a communal account.

    We have *never* had an argument about money. Marriage sure isn't about paying bills.

    Posted 1 year ago #
19. 

    JasonR
    

    Master
    Joined: Feb '11
    Posts: 334

    I keep business income and real estate income in separate accounts (one acc for each). I then transfer money to our joint account from the business account (my paycheck).

    DW puts everything into the joint account, split is about 70/30 her/me. Any bill that's not business related (buying software, computer, internet, etc) we pay from the joint account.

    My wife and I think our set up is fair although she contributes far more than me to the pot. We're both pretty frugal and have a similar trajectory/end point which helps.

    I don't understand the splitting of expenses others are talking about. I'm not being obtuse, just curious. Do you line item the grocery bill? That's your toothpaste, these are my radishes, wait no, you ate 3 of them in the salad so you owe .16 cents? Do you figure out who used more electricity and charge accordingly? Or is the splitting of bills income based...you make 70% of the money so you pay 70% of all "our" joint bills. Then you buy personal stuff on your own?

    Is the splitting (if I'm understanding this correctly) born from differing goals or to prevent economic lechery and promote fairness?

    Posted 1 year ago #
20. 

    McTrex
    

    Apprentice
    Joined: Jul '10
    Posts: 62

    We separate our bills in joint spending and individual spending. Joint = mortgage, electricity, cars, groceries, etc. Individual = Clothes (mainly for my wife :) ), going out individually, sports, etc.

    Then of the total amount of joint bills, we each pay our share based on our income for the month. At the end of the year, we balance off the total joint spending based on the income ratio. Seems the most fair to us, as I make significantly more than my wife and my income tends to vary from month to month.

    I haven't yet figured out how to do this if I would go ERE before she does though.

    Posted 1 year ago #
21. 

    George the original one
    

    Expert
    Joined: Jul '10
    Posts: 1,938

    My spouse doesn't earn an income, so what's mine is hers...

    Well, actually she does occasionally get cash for knitting or crocheting or spinning something for someone and I encourage her to put that in her own savings account. Every so often we raid that savings account when the balance is above, say, $1,200 and never let it fall below $500.

    Thinking back on other potential spouses, if I'd married any of them, I would not be surprised if we'd kept separate finances as they were often very independent-minded. Different people need different arrangements.

    Posted 1 year ago #
22. 

    dot_com_vet
    

    Master
    Joined: Jan '11
    Posts: 376

    JasonR - We don't line item expense things like groceries, that would be a common item, like insurance.

    If I wanted to do something crazy, like get a speed boat, well, I would be all my own to pay for it. :-)

    Posted 1 year ago #
23. 

    ffj
    

    Master
    Joined: Aug '10
    Posts: 342

    We just throw all of our money into the pot and pay our expenses from that. I pay more simply because I make more than my wife. I can't imagine the headache of figuring percentages and fair shares and all of that.

    Posted 1 year ago #
24. 

    Sree
    

    Apprentice
    Joined: Dec '10
    Posts: 43

    We've been married almost 4 years. Initially we split expenses (utilities, food, entertainment) according to income (75% me, 25% her), but after she started going back to school, I am paying all utilities/housing and almost all her food and gas, and she pays her own school expenses and incidentals.

    When she starts working again, we will go back to sharing expenses based on income (mine from investments since I will be ERE by that time, and her from her job). If we have children, I imagine all this will be blurred up.

    Posted 1 year ago #
25. 

    McTrex
    

    Apprentice
    Joined: Jul '10
    Posts: 62

    "I can't imagine the headache of figuring percentages and fair shares and all of that."

    Excel's your friend :)

    Posted 1 year ago #
26. 

    blah
    

    Novice
    Joined: Dec '10
    Posts: 29

    DH and I are one flesh and so one ownership of money
    is minor and obvious to us. We have never split
    up our money or finances. When we said "I do" we
    became one unit financially as well as in name and in
    flesh. We are one household and there is no point in
    doing otherwise. When your lives are so intricately and intimately intertwined in all aspects, why would you seperate finances. I realize that this is each individual couples' choice, but I cannot imagine it being beneficial spiritually, emotionally, physically or financially to do it any other way. Now, I am not telling anyone else what to do by any means, but I finder baffling that when I read PF blogs, almost none of the people who write them have one financial situation for them and their spouse. We would not be able to have survived without doing things this way and we appreciate the closeness it brings to know we are one and that we sink or swim together. That to me is way more important than all the money in the world.

    Posted 1 year ago #
27. 

    prosaic
    

    Apprentice
    Joined: Jan '12
    Posts: 68

    After reading this thread I just realized my husband owes me half of 3 pregnancies, 3 miscarriages, 3 live births, and a combined total of 7 years of breastfeeding.

    Off to Google the approximate value...

    Posted 1 year ago #
28. 

    Spartan_Warrior
    

    Master
    Joined: Dec '11
    Posts: 500

    I sit firmly on the side of the pre-nup, separate savings, and splitting only common expenses like groceries and housing. It's simple statistics. Nowadays there's basically a 50% chance I'll lose 50% of my wealth in a marriage with combined finances and no pre-nup. Trust is one thing, odds are another.

    I'm all for traditional values but sadly when it comes to marriage in America the only place traditional values still exist is in the eyes of the lawyers and divorce courts.

    Maybe I'm just a cynic.

    Posted 1 year ago #
29. 

    mugwump
    

    Novice
    Joined: Jun '11
    Posts: 5

    Soon after we got married 25 years ago, we agreed to pool our income and split the extra every month as an allowance. During that time, I have been unemployed and underemployed, made more than DH for several years, and am now retired. I am fortunate that DH has had a decent pension all that time, while I have always known I needed to provide for my own retirement income.

    Over the years, we have changed the agreement. Most significantly, when I started making decent money again, we agreed to take fixed allowances and save the rest for the 'kitty'. Most of the changes we have made have tended to pool our money more. The biggest exceptions to our rule are that his RMDs from IRAs that date from before he was married are his, and I did not pool my 401k contributions.

    Over the years, we have evolved to living on his income, which was stable and sufficient, and using my income for investments and unusual expenses. Now my assets are greater than his, and his income is more than mine, but I need the greater assets in case something happens to him. If I start drawing on those assets, of course we will share equally.

    If we were to divorce, I would end up worse off, because he would be entitled to half of my assets, while much of his assets are pre-marital. But divorce is a financial disaster in any case, and I am glad that is not on the horizon.

    So, marriage is a journey, and there is no point in expecting to set the rules at the beginning and expect things to never change. People of good will can discuss things openly and agree on changes. If that is not a possibility in a relationship, I seriously question whether anyone should get married.

    Posted 1 year ago #
30. 

    Posthumane
    

    Novice
    Joined: Nov '11
    Posts: 29

    I think there are reasons to keep some finances separate even if you are not considering a future divorce. For example if you have a large disparity in your income and the costs of your interests/hobbies, as is the case with my GF and I. While I do enjoy being frugal and saving money, I also enjoy the fact that my high income allows me to spend on certain luxuries which cost a fair amount but also bring me a fair bit of joy. That is part of the reason I pursued a descent career. GF on the other hand has a very low income, but also low expenses. I think if we pooled our money completely if we got married it would eventually lead to resentment - I would hate having to ask permission to use the money I earned on something I really want.

    Posted 1 year ago #
31. 

    Scott 2
    

    Journeyman
    Joined: Feb '12
    Posts: 189

    My wife and I keep our money seperate. We do line item the grocery bill. It takes 5 minutes.

    Generally we split costs 50/50, even though I earn more. The exception is our mortgage. We moved into a more expensive home, understanding her pay was not high enough to afford half the cost. As she has earned a higher salary, she has come closer to paying half. It gives me a strong incentive to help her career.

    I save most of my salary, so our spending ends up very similar. If anything, she probably spends more than me. We rarely fight about money. Joint financial decisions are made together, cause hey, you can get the other person to pay half!

    I do think if I were to spend my entire salary, essentially providing me with double the purchasing power of my wife, that would create stress in our marriage. It's unlikely to happen.

    We looked into a pre-nup when getting married. An enforcable one is expensive. The divorce laws in our state were fair enough, so we didn't bother.

    We have no kids or plans for kids. I see how that could change everything.

    Posted 1 year ago #
32. 

    rachelFLF
    

    Novice
    Joined: Nov '10
    Posts: 18

    My husband and I have the same goals and priorities. We are working toward ERE together. What does it matter whose CC we use to pay the grocery bill?

    Posted 1 year ago #
33. 

    Scott 2
    

    Journeyman
    Joined: Feb '12
    Posts: 189

    Well, whoever pays the bill gets the reward points, so it's only fair they line item the reciept.

    Line iteming the grocery bill is not about who bought carrots. It is about eliminating the gray areas. When the financial split is absolute, decision making around money is completely removed. There is no conflict, because a concrete script is provided for every day to day scenario.

    My wife's money is hers to spend as she pleases, even if I don't agree with the purchase. Two examples: I spent $0 on clothes over the past 12 months. She spent in the $500-$1000 range. I have no tattoos, she recently spent $1000 to start a tattoo that will cost another $1000-$2000 to finish. Her money, her choice. No "what do I get for $1000". Just "oh, hey, that's pretty cool."

    Now, she still saves a respectable amount. We might have a problem if she was spiraling into debt. Really though, what happens is she sees the wealth my savings is accumulating, then ends up saving more as well.

    Posted 1 year ago #
34. 

    FPMLLC
    

    Apprentice
    Joined: Aug '12
    Posts: 84

    Wow, this is a great topic...and I can't seem to figure out what side I am on. I am married (going on seven years(wow)). But I am also much more frugal. If it were up to me, I'd eat tuna and tap water if it meant I didn't have to work. We also have a daughter, who my wife loves o buy things for. But I also just spent my tax return on a truck, despite the money was ear marked for debt. I could have gotten another very cheap beater, but getting sick of fixing and borrowing.

    One one hand, I know friends who keep things separate, and I know it shouldn't because it's 2013 but it feels strange to me. Maybe i am a little traditional in the sense that you should be actively working together for similar goals, Keeping things separate and having separate goals seems like an easy way to split. I also thought about what if we did that, I make MUCH more then SO, and I'm great at hustling up cash. What happens when I retire at 40 and she's working, just point and laugh and say haha? I'd end up subsidizing her then. maybe. Who knows.

    The way we do it is that I do it. I've learned with my SO that data is better ammo for an argument then logic, so When I said we can't spend more then XXX a month and we spent more, I showed her. We fixed it. After about 18 months of trying different systems, and different ideas, we landed on a $200/week CASH payment. This covers, food, gas, coffee or what ever else we "need" but once we're out we're out till Sunday. The 200/wk is enough where I can pay all of the other bills, debt, and still save. Meanwhile she is much more aware of what she spends since she knows it will run out, but its a short period of time so if it does, she only has to make it a few days.

    She trusts me when i spend, save, and a lot. I've bought two rental properties, leveraged, and started a new business last year.

    Sometimes I think it would be nice to say, you live your way and I live mine. And I'll just smile when you leave for work and I'm enjoying a beer at 8 am on a hammock...but then realize that wouldn't be fun at all, most days anyway.

    Posted 3 months ago #
35. 

    Seneca
    

    Master
    Joined: Nov '12
    Posts: 360

    We lived together for several years before marriage, and we kept our money separate.

    Having tried our finances both ways for long terms, by a significant margin combined works better for us.

    Posted 3 months ago #
36. 

    FPMLLC
    

    Apprentice
    Joined: Aug '12
    Posts: 84

    @seneca. I think that's the goal, find what works for you. Me and my wife knew each other seven months before I proposed. We lived together for a few of those months. I got married and left for 8 months to go play in Iraq. Came back and we just pooled it together, and made changes as we needed to. It took a while, but now we live way below our means, are building our asset pool, and paying off debt.

    I got lucky, my wife isn't a huge spender but loves to shop. She also prefers the look of hand crafted wood counter tops (cost me $119 to make) vs granite. Her parents are also in bad financial shape, and she sees how unhappy it makes them to HAVE to work at 70, where my mother is happily retired and loving life @ 55. So she trusts that my insanity will get us to a good place.

    And anytime she mentions a certain friend, who has two new cars, and has no problem spending $500 on a random shopping binge, and redecorating her house. And then looks at our older cars, and house that needs lots of TLC, I explain that it is easy to look well off, I have 800 credit, I can go sign for a benz and a 800k house...but that's not whats important. And if she must compare, look at the true value. Other couples our age are just buying a home, we only have 18 years left till we own ours. Our passive gross rental income is more than the 'well offs' salaries. Sure we are really tight now, and sure she doesn't get the same satisfaction as I do when I see that My IRA is beating the S&P by 4% but she trusts me to take care of them

    I've only been with her 7 years, but I think the most important thing in a marriage is to find out what works for you two. What works for one won't work for another, and just like any other aspect of a marriage, full honesty and communication will get you through it.

    Posted 3 months ago #

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