You’re taking the plunge and moving in with your partner. What an exciting time! As you choose paint colors and furniture together, you must also discuss other ‘less fun’ topics, namely money and splitting bills.
It’s not something anyone likes talking about, but if you do it now before you move in together or at least right away, it alleviates the awkwardness and may even prevent some fights. There’s no right or wrong way to split the bills, but there are some tried and true ways that may make your life a whole lot easier.
In this article, we'll go over how to navigate splitting bills with your partner, so you can proceed in your relationship with a clear financial path.
How to be successful splitting bills with your partner
No one likes talking about money, but trust us, if you do it now, you’ll be grateful. Not talking about it leads to hard feelings, financial infidelity, and sometimes even credit troubles. Instead, know how to split the bills so that it feels fair on both sides and leaves you both feeling like you’re contributing, yet having some freedom too.
Lay it all out there
First, you can’t do anything with your finances together if you aren’t honest with one another. This isn’t a time to point fingers, feel embarrassed, or hide anything.
Tell your significant other everything. This includes how much debt you have, what your credit looks like, and also what financial goals you have in mind. This is a great time to compare your goals side-by-side. You never know when you may have some similar goals and others that aren’t similar but important to either party.
Have an open mind as you listen to one another. Don’t judge. Just because your partner has certain financial ideas that don’t align with yours doesn’t make them wrong. Set a time to talk when you both are relaxed and can truly listen.
Have a team mindset
A team mindset is important here. If up until now, you’ve operated solo, it can be challenging. Remember why you’re having the conversation. You are moving in with the person you love and maybe want to spend the rest of your life with - this is an essential and ground-rule setting conversation.
Think like a team, but leave room for individual goals too. You don’t want to feel so suffocated that you can’t have your own financial goals, but you want to have some goals that you share too. As you look at your bills, consider these options.
Ways to split the bills with your partner
There's no one right way to split the bills with a partner. Instead, you want to do what works best for you both. Here are some ways you could split the bills.
1. Separate but equal
You may choose to keep your bank accounts joint or separate, but you split the bills equally. To do this, you can each put in 50/50 for the bills or split the bills, giving specific bills to each person.
For example, you take the rent or mortgage, and your partner takes the utilities and insurance bills. Try to make the split as even as possible, so there aren’t any hurt feelings or feelings of superiority on either end.
2. Proportional to income
If one partner has a much higher income (and higher cost of living as a result), you may consider splitting the bills proportionate to each person’s income.
Tread carefully here. First, decide together if one person will be responsible for a higher portion of the bills. Don’t make it something one person pushes on another. If the higher-earning partner suggests that he/she pays a larger portion of the bills, then you can work something out, but if it’s not suggested, it may be a touchy subject.
We don’t recommend this option but will talk about it briefly. If you each pick and choose the bills you pay, be careful. For example, if one partner pays the rent or mortgage one month and expects the other partner to pick up the utilities, cable, and food bills, it may work, but don’t assume.
If nothing else, come together at the end of the month and compare expenses. If you agree, then you can move on. If it looks like one partner paid much more than the other and you want to make it even, you may want to square things up to make it even. Or you could make it fun and make the partner who paid less come up with (and pay for) date nights.
Tips for splitting bills before marriage
Splitting bills before marriage is a big decision. There are many ways to do it and many factors you should consider since you aren’t married.
Keep your assets separate before marriage
It’s never a good idea to join assets before marriage. This includes checking accounts, savings accounts, or buying any assets like a house or car, or even furniture. Until you’re married, keep everything separate.
Don't share debts
It’s also never a good idea to share debt with anyone, including a partner (until you’re married). As the co-signer, you’d be on the hook for the debt if your partner defaulted. You never know what will happen with the relationship - there’s no reason to complicate matters before it’s necessary.
Layout your expenses
Figure out how you’ll share expenses before you move in together. Don’t leave it to chance or use the ‘free for all’ method. This leads to arguments, hard feelings, and, worse yet, potentially unpaid bills.
Plan for the future
It’s not something you like to think about but planning for the unexpected is important too. What would happen if your partner fell ill and couldn’t make financial or health decisions? Worse yet, what if one of you died? Decide ahead of time who will be responsible for which decisions. If it’s not either of you, who will make the decisions?
Should your strategy change after marriage?
Once you’re married, legally, things change. Your assets are joined whether you keep your accounts separate or not.
Many couples keep separate checking accounts for ‘fun’ money and surprises or to keep a sense of independence. Others join everything. Before you get married, discuss what you both think should or shouldn’t change.
Use the same premise - have an open mind, think like a team, and be fair. If it makes anyone feel better to continue splitting the bills like you were before you were married, there’s nothing wrong with it. But, if you feel like more of a ‘joined unit’ when you join assets and pay bills from the same account, that works too.
Plan splitting bills with your partner before you move in together
The most important thing here is that you plan how to split the bills with your partner BEFORE you move in together. Hopefully, the conversations go just fine, and you’re on the same page, but you never know.
Ironing out the details before you live together is important to maintain financial peace for both of you. Plus, it’s a lot more fun to live together when you get the ‘tough stuff’ out of the way.