Couple at home living together

How to Split Finances When Living Together

I recently told my Instagram community that I out earn my male partner, that we don’t share any bank accounts and that we do not share household finances 50/50. And let me tell you people had questions! So today we’re going to talk about how to split finances when living together.

Obviously this is a deeply personal question. I’m going to share my experiences as a financial expert and I’m going to talk about how I personally manage money with my long-term partner. This will vary person-to-person, but we’ve tried a lot of different setups and ways to split the bills.

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Our Personal Finance History

My partner, T-bone and I don’t have any shared bank accounts. We have different incomes and we have different financial goals. We have been together for 10 years and when we first got together he was making $24,000 a year and had about $66,000 in student loan debt. I was making $16,000 a year and had about $20,000 in student loan debt. T-bone lived at home with his parents and I lived in Austin, Texas with three roommates.

For the first maybe four or five years, T-Bone out earned me, sometimes by a significant amount. T-Bone has never been a particularly high earner. He’s never earned six figures. But I was such a low earner for so long that it wasn’t hard to significantly out-earn me. He earned about $50,000 a year when I was earning $23,000 a year. In the last few years, Bravely started to do better and I started to out-earn him.

Why We Don’t Share Financial Accounts

We do not share any accounts whatsoever. For us, totally separate finances work. (If you’re thinking about considering combining finances, check out our couples money workbook, which walks you through how to talk to your partner about combining money, their financial goals, and any financial hiccups either one of you might have.)

Anyone who is in a romantic partnership needs to have at least one account in your own name, even if you are living together. I would start with a high yield savings account.

I also encourage you to have an investment account in your own name and that’s just because there are, unfortunately, so many stories of couples breaking up. Women really suffer financially as a result. Divorce is one of the leading causes of poverty in older women because these women did not have any accounts in their own names.

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Methods of Finance Splitting We Have Tried

We’ve tried a lot of different methods before we landed on where we are today. I really recommend building the habit of talking about money early on in a relationship. Our couples money workbook starts off with questions you can ask one another about financial history, what money means to your partner, and financial goals.

We did try splitting things 50/50. For a period of time, T-Bone paid more relative to his income. We tried to just pay for what we each individually used. So, I was going through our grocery receipts and tallying out the items we each ate. We’ve tried a lot of different things.

What financial method of splitting expenses works for us

Right now, we are splitting major expenses 50/50. So rent, car insurance, those are things we are splitting 50/50. But other expenses like household utilities, we split according to income. I am paying more because I make more. For example, T-Bone does not contribute to our internet bill. I pay the internet bill 100% on my own.

Tips & Tricks for How to Split Finances When Living Together

Communication is key!

For me, it’s more important to be able to communicate openly about money than to be a high-earning partner. We have monthly money dates where we sit down and we both look at each other’s income. (We cover how to have a productive and fun money date in our couples money workbook.) I know every detail of his financial life and he knows every detail of mine. For me, that kind of transparency and communication is more important than him being a super high earner.

Consider what is “fair” to both of you

I think splitting expenses relative to income is actually the most fair way to approach finances. If you make $100,000 a year and your partner makes $30,000 a year, then splitting a $100 dinner out 50/50, that $50 is a much bigger piece of your partner’s relative income than it is for you. The fairness is inherent in the relative amounts of money earned.

Consider the future

If someone is very low earning, but is on the path to being a high earning, that’s something you have to stay in communication about. Get legal documents involved. There is story after story about couples where one partner worked to put another partner through law school or med school and then the higher partner breaks up with you. Then, the person who paid for them to go to school never gets paid back.

If you’re involved in your partner’s financial life in a significant way, like contributing to their education, document it. Write that down and have them sign a contract. Perhaps you’ll agree that you get paid back or later on, or you’ll prioritize your retirement earnings over their retirement investments for a while.

I know that sounds maybe like not very romantic, but you know what’s more romantic? Staying together in a happy healthy partnership and not letting money divide you down the road. Be in regular communication about this and set expectations of what will change in your relationship when the money changes.

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How to Split Finances When Living Together and Planning for Big Expenses

Come up with a budget that you want to spend on the expense. So let’s say we wanted to spend $20,000 on a car. He would save $10,000 in his HYSA and I would save $10,000 in my HYSA. Then, we would go by the car and put both of our names on the deed to the car.

But play around and whatever feels right for you as a couple, that’s what’s fair.

Unpaid Labor is Still Labor

Let’s say you have a stay-at-home parent partner. They’re not earning money, but they’re obviously doing incredibly valuable labor. They still have a right to have savings and investments too. Stay-at-home partners can still have IRAs.

What happens if we break up before retirement?

If married, a prenup helps. Get legal documentation. I also think it’s important to understand that plans may change. It’s okay to continue to refine your financial plans as your life changes.

If you’re more of a visual or auditory learner, I talk about these questions and more in the YouTube video below!

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