This article was written by a guest contributor. For guest contribution guidelines, please visit this page.
Chris Panteli has a Degree in Business Economics from the University of Liverpool and a background in finance, small business, start-ups, and side hustles; and is the founder of LifeUpswing.com. He has written on large industry publications, including the New York Times, Forbes, Go Banking Rates, MSN, and Yahoo Finance.
If you’re preparing to get married or move in with a partner for the first time, then first of all, congratulations!
Taking that next step is filled with excitement. There is much to do, including picking furniture together, choosing the decor, and deciding who to invite to the housewarming party!
However, there are also a few less than fun things to do—one of which is discussing how to split bills.
Money is one of the biggest reasons that relationships fail. Ideally, you and your partner will discuss finances before moving in together. If you haven’t, don’t worry! Start that conversation now.
These tips for splitting bills with your partner will help you reach a financial agreement that keeps you both happy.
How To Talk About Splitting Bills With Your Partner
Open and honest communication is one of the cornerstones of a successful relationship. Partners should be able to talk about anything and not play games with each other.
Occasionally, some topics can turn into heated conversations. Money is one topic that can easily escalate into an argument if you’re not careful.
Failing to talk about money from the start can lead to a host of problems. Financial infidelity, spiraling debts, bad credit, and even repossession of your home could all result from failing to talk about money.
Having a conversation about money is the only way to avoid these potential long-term problems. To prevent the discussion from escalating into an argument, try to have it when you’re both in a calm mood and in a neutral setting.
When talking about money, you must both be honest. Many feel embarrassed about debt, but you must disclose all debts. That’s because debt repayments are going to impact the household finances.
You should discuss your debts, credit score, and financial goals.
Sharing all this with each other means no nasty surprises in the future. It also means you can build a financial plan together to achieve the financial goals that you are both aiming for. That way, everything is fair, and neither partner should feel left out or resentful.
Teamwork Makes The Dream Work
Most people manage their own finances until they marry or move in with a partner. Once you decide to share your life with your partner, you must get out of the solo mindset and into the teamwork frame of mind.
Whatever method of sharing finances you choose is between the two of you. Yet, you must treat finances as a team goal now. Both of you will have personal financial goals, but the partnership’s goals also need to be reached.
Talking about money as a team should prevent jealousy from building up. It should also mean you achieve your couple goals and your personal goals.
Here are some starter questions to ask each other:
- What are your short and long-term goals?
- How should we handle big purchases?
- Which purchases will be classed as essential?
- Are all purchases part of the household budget, or just those deemed essential?
Is The Money Conversation One And Done?
During a lifetime, your financial health will have many changes. You probably don’t have 2 cents to rub together at the start of your adult life. As your career takes off, that should change by the time you’re in your 30s and earning more.
Life events like children, buying a home, and retiring will all impact your finances at various stages of your life.
All this means that the conversation with your partner about money should be a continual process. Decisions made at the start of a relationship should be reviewed often.
Has one of you had a salary increase? Is one of you taking time off to care for children? Can one of you no longer work due to ill health? Did one of you have a lottery win?
These situations and hundreds more can happen at any moment. If you and your partner continually discuss finances, not only should you already know what you will do when life events happen, but it should be an easy conversation to have!
Tips For Splitting Bills With Your Partner
There is no right or wrong way to manage finances. Every couple is unique with their own financial goals and challenges. These tips for splitting bills with your partner can help you find a way that works for you.
Keeping Finances Separate Yet Equal
Some couples, especially if not married, choose to keep finances separate. They may get a joint account to pay bills from but will still maintain their own bank accounts.
To do this, bills are split 50/50 between the couple. If using a joint account, both pay their half of the bills into the joint account. Partners might use the Cash App to easily transfer money back and forth to make sure both pay their share of the bills.
Alternatively, couples that maintain separate bank accounts may be responsible for paying specific bills and not using a joint account. For example, one partner may pay rent, and the other partner pays the utilities. As long as it adds up to 50/50, then both should be happy.
Split Finances According To Income
Splitting the bills proportional to income can be a fair way to split bills when one partner has a significantly higher income.
How would this work?
Let’s say one partner earns $200,000 and the other $50,000 per year. The higher-earning partner has four times the income of the other. The higher-earning partner would pay 75% of the bills to split bills proportionally.
If you decide to split bills this way, make sure you’re both in agreement. Resentment could easily build if one partner felt they were forced into an agreement.
Often one partner is more engaged with finances than the other. That’s OK as not everyone enjoys numbers or discussing money. However, as you both need to talk about money, make sure that you do it together when making a budget. That way, if one of you isn’t overly interested in money, they can’t say they weren’t given an opportunity to discuss it!
Make sure to list all expenses, debts, and income when making a budget. Even if you don’t share bank accounts, you should still discuss all financial info.
Sharing Debts And Assets
If you are not married, then sharing debts isn’t usually a good idea. If the relationship fails, you could still be on the hook for your partner’s debts as a co-signer.
Assets should also be kept separate until marriage. If you buy a house together before marriage, you should make sure to get legal advice and a contract in place to handle the fallout in the event the relationship fails.
When planning for marriage, you may want to talk about getting a prenup. A good prenup protects both of you in the event of divorce. Getting a prenup doesn’t mean your marriage will fail, but it means you are both prepared should the worst happen.
Discuss The Future
In your 20s old age feels forever away. Let me tell you something – life comes at you fast! In the blink of an eye, your kids will be off to college, and you will be nearing retirement.
As part of your continual conversation about money, make sure that you’re on the same page for the future.
- What are your retirement goals?
- What will you do if one of you gets too sick to work?
- How will you spend windfalls (Inheritance, tax refunds, lottery wins, etc.)?
By always talking about your personal and couple goals, you can make sure you achieve everything you both want to. You also don’t have to worry about surprises in your old age.
Handling Financial Infidelity
Financial infidelity takes many forms. Keeping debts secret, spending savings without an agreement, or hiding purchases are common ways one partner may abuse finances.
When financial infidelity happens, it could mean the end of your relationship.
To keep your relationship after one partner has committed financial infidelity will require a lot of work. Rebuilding trust is not easy.
Implementing the tips listed above can help avoid financial infidelity but can also help repair the damage afterward. You may also need to get professional therapy both as individuals and as couples. Make sure to:
- Budget together
- Talk about money weekly
- Make sure both feel financially independent
- Try not to play the blame game
- Track spending
Tips For Splitting Bills With Your Partner – Wrap Up
Money is one topic that can end a relationship. However, it’s not really money that causes the breakup. Instead, poor communication results in long-term harm to the relationship.
The most important next step for you and your partner is to be able to talk honestly about finances. If you can do that, then you can build a strong foundation for a long-term partnership that will last well into your golden years.
If you’re unsure how to start the conversation, why not start with this article? These tips for splitting bills with your partner are excellent places to start the talk about money.
You might also be interested in: Budgeting Tips To Save You Money [And 11 Things To Stop Paying For Now!]