Author Topic: How do you and you SO split income?  (Read 7063 times)

kwarden13

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How do you and you SO split income?
« on: July 14, 2017, 08:51:22 AM »
My fiance and I are looking to combine our incomes and expenses in August. How do you splt up bills? Is it always 50/50 or income based?

For example, I make $40k more so thought income based would work better even though I am footing more of the bills. Not sure it is fair to split 50/50 because then she would be left with no money while I have plenty.

Roboturner

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Re: How do you and you SO split income?
« Reply #1 on: July 14, 2017, 08:55:37 AM »
we do 50/50, our income split is 45/55. I think it's important to remember you guys are playing for the same team, so do what makes sense, I (nor my SO) would stick to a strict 50/50 expense split if it meant one of us couldn't max out our 401k, for example. Ultimately it's all coming from the same bucket.
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Lepetitange3

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Re: How do you and you SO split income?
« Reply #2 on: July 14, 2017, 08:59:31 AM »
Well....I'm married, it's a communal pot for us.  All $$ go into the one account and all $$ go out of the same.  We don't pay attention to who brought in or spent what because we are on the same page (the MMM page!) about how we want to manage our money.

Money issues are the leading cause of divorce.  That's where I'd sit down and have a chat and a think.  If you aren't on the same financial page for the most part and wouldn't trust sharing an account for all incoming and outgoing, do you really want to be married?  I also ask this because even if you don't combine finances, if you don't have a pre-nup going into this marriage, it doesn't matter that you didn't fully combine them or you did some other breakout.  In the event of divorce, it will be considered that all money earned or debts incurred by either party during the marriage was both "yours".  Also compared to my peer group, hubby and I have been married for ages and ages.  A lot of others divorced.  A lot of it was about the Benjamins. 

50/50 and income based does work for some people, and there are people on the forums that it's working well for, which is awesome.  MadFientist blog also comes to mind.   I'd just caution that I think for many people it won't work and will cause friction.  If FIRE is your goal, it's also more advantageous to fully tap both earners power in jointly held accounts. 

GuitarStv

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Re: How do you and you SO split income?
« Reply #3 on: July 14, 2017, 09:03:47 AM »
We've been consolidating bank accounts and finance stuff since we were married.  It's not "mine" or "hers", it's ours.  We are generally in agreement with how money should be spent and savings, so this has worked out well for us.

Roboturner

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Re: How do you and you SO split income?
« Reply #4 on: July 14, 2017, 09:06:33 AM »
50/50 and income based does work for some people, and there are people on the forums that it's working well for, which is awesome.  MadFientist blog also comes to mind.   I'd just caution that I think for many people it won't work and will cause friction.  If FIRE is your goal, it's also more advantageous to fully tap both earners power in jointly held accounts.

^^ Good points here

For us, we track expenses both separately and together, I think it's helpful (for us) to look back at who buys what. However, the money is ultimately aggregate, and so should the expenses.
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yodella

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Re: How do you and you SO split income?
« Reply #5 on: July 14, 2017, 09:11:37 AM »
My husband and I have been married five years, and we maintain (mostly) separate finances and pay bills according to income. He earns a LOT more than me ($175k vs $65k), so by using this method we are both able to max out retirement accounts and save in taxable accounts too.

We use a simple formula: because he makes 73% of our overall income and I make 27%, we pay 73% and 27% of most household bills and shared expenses, respectively.

There is always a lot of debate around split vs. combined finances, and what it might mean about your marriage if you choose not to combine, blah blah. For us, we are both very independent people, so having independent finances works best.

Krolik

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Re: How do you and you SO split income?
« Reply #6 on: July 14, 2017, 09:15:07 AM »
Each of us keeps $100 (' private fun money') from paychecks and the rest goes into joined account. It works great for us and is very easy.
My husband makes 3x what I make.
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ketchup

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Re: How do you and you SO split income?
« Reply #7 on: July 14, 2017, 09:15:59 AM »
We combine all income and expenses (and have a few shared credit cards), and put savings where makes sense (tax advantaged etc.).  Our income is split about 60/40.  We are very much on the same page financially (there would be friction in other places too if this weren't the case) and discuss small and big purchases together.

EDIT: The only potential for weirdness is "gifts" for each other, but we do that pretty rarely anyway since we are both adults.
« Last Edit: July 14, 2017, 09:19:11 AM by ketchup »

dreadmoose

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Re: How do you and you SO split income?
« Reply #8 on: July 14, 2017, 09:16:06 AM »
If you aren't on the same financial page for the most part and wouldn't trust sharing an account for all incoming and outgoing, do you really want to be married?

I'm married as well but don't believe that you're in trouble having separated finances (secret finances is a much different story). We are both higher earners but my income is a multiple higher than DW. The way we worked it out is to sit down, talk through what is important to us and then work our budget backwards. We started with how much needs to be saved for financial goals (retirement, student loans), then how much spending money we need to not feel deprived, then to bills and filled our budgets equally until one of us ran out of income to use. To do this our goals had to be well defined and agreed between us (yay marriage?).

This has ended up with me paying more of the bills but still having significantly more spending money each month as well (I use this spending money to buy financial freedom). The point above about it not mattering if you end up divorced is completely true, and I have no illusions that she'd get half of anything we accumulate.

Neither of us would be happy if we weren't actively involved in our own finances (one big pot that one person looks after). We're also of the mind that incentives and goals are important to growth, so having one large pot of money that has your raises / bonuses / overtime cut in half wouldn't work for us. If either of us earn any side-hustle money we get it to ourselves, as well as if raises occur we can decide how to allot those together (the DW is fervently proud of being independent and paying her way, and I'm in no way going to fight against one of the reasons I married her).
« Last Edit: July 14, 2017, 09:19:01 AM by dreadmoose »
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Lepetitange3

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Re: How do you and you SO split income?
« Reply #9 on: July 14, 2017, 09:17:40 AM »
Just wanted to add- I don't think it says anything about anyone's marriage if 50/50 or %income works for them.  I think it takes ALOT of solid communication  for that to work without causing one or both parties to be unhappy.  So those who are doing it successfully are doing something extremely right. 

I think that marriage is a partnership so we are team playing everything, including finances.  This works well and I think it's probably better as a default position if neither party feels strongly one way or the other On the independent front.

But you have to have this chat with fiancÚ.  We can give you pointers but we don't have to live it.

Dave1442397

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Re: How do you and you SO split income?
« Reply #10 on: July 14, 2017, 09:18:10 AM »
Well....I'm married, it's a communal pot for us.  All $$ go into the one account and all $$ go out of the same.  We don't pay attention to who brought in or spent what because we are on the same page (the MMM page!) about how we want to manage our money.

Same here. We each take $100/week for whatever, but all family expenses go on credit cards and are paid out of a joint account. My wife has no interest in handling bills and finances, so I take care of all that. When we first met my income was 2.5 times hers, but now I only make around 20% more than she does. Neither of us ever cared about who made what - once we got married, it was all considered 'our' money.


Alicia

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Re: How do you and you SO split income?
« Reply #11 on: July 14, 2017, 09:18:15 AM »
We do an income based split, which I think is the most fair whenever there's any significant difference in income.

About 80%-90% of our checks go into a joint account that handles mortgage, food, utilities, insurance, savings, etc. and we each keep the remainder for our own discretionary spending. This saves us the conversation about why he needs a 9th guitar pedal or why I need to pay money to run a race. We're both pretty frugal, so these overall small purchases are not any cause for concern and undoubtedly add to our respective happiness. This arrangement saves us from having to even try to keep it "fair" or "even," which would just be exhausting and counterproductive to our domestic bliss :)

DarkandStormy

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Re: How do you and you SO split income?
« Reply #12 on: July 14, 2017, 09:18:39 AM »
Just went through this recently.  We used to split 50/50, but we've both changed jobs (and incomes) over the last 8-10 months.

Now, we split "shared" expenses 55/45 (not an exact split of income, but tilted that way).  Things that are shared - mortgage, utilities, groceries, household items (tissues, TP, etc.), any dinners/drinks out that we share, etc.  Basically anything we buy that we both will partake in, we count as "shared."

https://adamhagerman.com/share-expenses-living-together/

There are three ways to look at it, imo:
1) 50/50 (easy math, maybe not most effective)
2) Based on % of income
3) A shared pool.  All of your income goes into one pot, you pay off your shared expenses, then each of you receives 50% of what's left (at least based on articles of I've read of various ways to split shared expenses)

The reason we do 55/45 is that we're about 57/43 on after-tax income on our paychecks.  She's a govt employee so she has different (read: better) pre-tax retirement options than I do.  So our goal is to make sure we can both max out our Roth IRAs, cover our portion of the shared expenses, and have roughly the same left over for a) personal expenses and b) other investing.  If we did 50/50, she'd be very close to choosing to max out her IRA or paying for her own personal items.

You two have to decide what's best for you.  She actually came into the discussion thinking 50/50 would be most fair ("We will eat the same amount, shouldn't we pay the same?").  After going through several examples (we ran 5 scenarios in a spreadsheet) we decided 55/45 would be best for us together.
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afuera

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Re: How do you and you SO split income?
« Reply #13 on: July 14, 2017, 09:21:50 AM »
All $$ goes into one checking account and all $$ (investments, bills, and cc payments) gets paid out of that checking account.  Easy peasy.
We are both maxed on all retirement accounts so those are the same and our brokerage is joint.  We each get a separate/equal amount for "guilt-free" spending but it is just a budget category as all the $$ is still in the same pile.
I make about 25K more than Hubs but our paychecks are similar since I can do the Mega-Backdoor Roth 401K thing and he can't.
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neo von retorch

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Re: How do you and you SO split income?
« Reply #14 on: July 14, 2017, 09:24:52 AM »
There's always debate around this, and I've been on both sides of the debate.

Let's take a step back and ask - what are your partner's long-term goals, what are your goals, and what goals do you share? How does marriage fit into your goals? Is marriage an agreement of exchange of favors, transactions that you'll attempt to balance, until death do you part, or does it mean something else to you?

I've seen some relationships where everything seems to be a transaction. "You owe me this, because I did that." In other relationships, you see more charity. "I know my partner works very hard doing that, so I try to always do this, so they don't to have to worry about it." Also, sometimes you see teamwork. "I really enjoy doing this, and I'm good at it, but my partner is much better at doing that, so they take full responsibility for it."

Now, a marriage doesn't have to be "the unified one" to be successful and mutually beneficial. However, the decisions around money (like all marriage decisions) should be arrived at together by looking at your shared (and individual) goals, and figuring out how to accomplish them. Trying to "split money fairly" is one approach, but to me, it sounds like the best approach if you each have largely independent goals you are working towards, and just want to use the marriage as a way to benefit each individual.

So before you choose an approach, what kind of shared goals do you have, and what kind of marriage do you want to have?

Lepetitange3

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Re: How do you and you SO split income?
« Reply #15 on: July 14, 2017, 09:31:13 AM »
There's always debate around this, and I've been on both sides of the debate.

Let's take a step back and ask - what are your partner's long-term goals, what are your goals, and what goals do you share? How does marriage fit into your goals? Is marriage an agreement of exchange of favors, transactions that you'll attempt to balance, until death do you part, or does it mean something else to you?

I've seen some relationships where everything seems to be a transaction. "You owe me this, because I did that." In other relationships, you see more charity. "I know my partner works very hard doing that, so I try to always do this, so they don't to have to worry about it." Also, sometimes you see teamwork. "I really enjoy doing this, and I'm good at it, but my partner is much better at doing that, so they take full responsibility for it."

Now, a marriage doesn't have to be "the unified one" to be successful and mutually beneficial. However, the decisions around money (like all marriage decisions) should be arrived at together by looking at your shared (and individual) goals, and figuring out how to accomplish them. Trying to "split money fairly" is one approach, but to me, it sounds like the best approach if you each have largely independent goals you are working towards, and just want to use the marriage as a way to benefit each individual.

So before you choose an approach, what kind of shared goals do you have, and what kind of marriage do you want to have?

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Aegishjalmur

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Re: How do you and you SO split income?
« Reply #16 on: July 14, 2017, 09:38:14 AM »
Do what makes the most sense to you and what you are comfortable with. Communicate. communicate. communicate. My wife and I have all our income going into one acct(401K's are being maxed out, taken out before funds deposited). All bills are paid from the one pot. When we were paying off debt, we picked the accts that got us the biggest bang for the buck and targeted that first, then the other debts(so my car loan first, then her student loans). It works well for us. 

The biggest issue I have seen with the separate finances is dividing the bills fairly. I have seen posts where one partner has all the income and they use their excess for playmoney, and the other partner can barely cover the necessities and can't afford anything extra, that breeds a lot of ill will.
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RamonaQ

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Re: How do you and you SO split income?
« Reply #17 on: July 14, 2017, 09:49:25 AM »
My SO and I aren't married but have been together for 7 years and live together.  He makes about 3x what I do.

We split things in a way that is roughly income based.  We don't share bills 25/75, but instead split up what each one is responsible for.  For example, he pays the mortgage, and I pay the utilities and groceries.  We didn't want to have to be transferring money back and forth all the time and we both trust each other to pay things on time.  We have made changes to who pays for what a couple times.  Honestly, we went much more by "feel" than by a calculated percentage but it worked out to roughly correspond to our incomes.

We don't really pool our money.  We have a joint checking account but don't really use it except in the rare case when we need to give money to each other.  (Like, if we go on vacation I usually pay for everything and then he reimburses me for his portion after.)  Anything we buy just for ourselves comes out of our own personal money.

We probably keep our money a lot more separate than most, but it works pretty well for us.  Neither of us have been married and we were in our mid-thirties when we started dating, so we were both used to doing things our own ways and having a lot of autonomy.
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englishteacheralex

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Re: How do you and you SO split income?
« Reply #18 on: July 14, 2017, 10:03:03 AM »
I've been married four years. My husband makes more money than I do, but I am a teacher with 12 weeks off/year, and if I worked 12 months/year we'd make roughly the same amount.

Our money is a shared pot. We think of ourselves as equal participants in a sort of cottage industry. I never, ever think about who contributes what or who is consuming what. We are a team pulling together to serve the community, our children, and each other in the long term.

Over the years I've learned to think about household chores the same way. I used to get bogged down in a "score keeping" mentality that I think is very common in the marriages I've observed. After a while I got over it. Sometimes I'm lazy and Mr. ETA picks up the slack. Sometimes he's lazy and I step up. Most of the time, we feel like the other one is contributing way more than his/her fair share and tend to thank each other/apologize accordingly.

A much more pleasant way of living, I've found.

The money thing and the chores thing are the two biggies that I've seen that tend to totally screw people up. People don't necessarily get divorced over these things but they sure do tend to have sad, loveless marriages when they get tripped up in these two traps. Politically, I'm not a communist but in marriage I think it works great. I mean, assuming both partners are fundamentally operating in good faith. I know that's not always the case.
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L. WereBear

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Re: How do you and you SO split income?
« Reply #19 on: July 14, 2017, 10:05:32 AM »
We each have our own checking account where our paychecks are deposited. We manage our comfort levels for reserves in the account individually, with an agreed upon minimum of 2.5k reserve which could pay for our entire household expenses for a month.
We have a joint account for house down payment where we contribute a defined minimum amount per month.
We have a goal for total tax advantage savings with each of us being responsible for contributing to the max for IRA and the rest split along income percentage.
We have assigned bills. I pay rent and renter’s insurance. SO pays groceries (~$350?) and utilities (~$50). We are responsible for our own individual expenses for health, gym, cloths, car insurance, car maintenance etc. Alcohol and dinners out are up in the air who pays, usually SO does. SO pays own student loans (~$240 min). I have none.  I tend to pay for vacations, but it’s fluid.
Who is responsible for what has switched as circumstances have changed. I paid for everything minus student loans for 2 months while SO was only working part time.  There were 2 months in there were I had a broken ankle/was on bedrest/couldn’t drive and was living with my parents so SO paid everything except my medical bills, including my credit card bill from the previous month because it was sent to our apartment.
Other than a home purchase, no major purchases have come up. Plan is to continue contributing to the house down payment fund (after purchase) at the same rate until we get ~15k which will serve as an e-fund, house maintenance/repair fund, and joint large purchase fund. We have been living together 10 months and I imagine we will move to a more joint structure eventually. I also paid ~80% of wedding expenses at they came up, but some of that meant reducing my house fund contribution by half for a month.

TL;DR-Joint major purchase savings with minimum contribution goals, Individual IRA, split by % income for 401k contributions, pre-defined individual responsibilities for household purchases, completely individual spending otherwise. And we make it up as we go along.

Also income is about 60/40 in my favor.
« Last Edit: July 14, 2017, 10:07:25 AM by L. WereBear »

Schaefer Light

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Re: How do you and you SO split income?
« Reply #20 on: July 14, 2017, 10:30:33 AM »
...even if you don't combine finances, if you don't have a pre-nup going into this marriage, it doesn't matter that you didn't fully combine them or you did some other breakout.  In the event of divorce, it will be considered that all money earned or debts incurred by either party during the marriage was both "yours".

The post above is something everyone needs to consider going into a marriage.  If there's a divorce, every dollar invested/saved during the marriage gets split 50/50 regardless of who earns more or who spends more.  It's also important to consider that if you're the higher earning spouse you WILL owe your ex alimony unless you can prove that he/she cheated on you.  I know most married people don't want to think about these types of things, but it can't hurt to know what would happen to your finances in the event the marriage doesn't work out.

iowajes

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Re: How do you and you SO split income?
« Reply #21 on: July 14, 2017, 11:22:00 AM »
We have one communal pot. All money and all expenses are joint.

We don't nickel and dime each other. I might roll my eyes at his new camera, or him at yet another box of fabric, but whatever money we have belongs to both of us. We don't have a budget, allowance, envelopes or anything like that.

This probably wouldn't work for everyone but in 13 years, we have not had issues.

Rubyvroom

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Re: How do you and you SO split income?
« Reply #22 on: July 14, 2017, 11:22:37 AM »
All $$ goes into one checking account and all $$ (investments, bills, and cc payments) gets paid out of that checking account.  Easy peasy.
We are both maxed on all retirement accounts so those are the same and our brokerage is joint.  We each get a separate/equal amount for "guilt-free" spending but it is just a budget category as all the $$ is still in the same pile.

You just described exactly what we do too :)

We decided on a fair "fun money" monthly allocation together. The "fun money" concept has saved us countless hours of arguments. Before we used to argue about him eating out at work or me going to happy hours. We spent far too much time nitpicking each other's spending habits on rather meaningless stuff that now we don't even discuss. We both have our "allowance" and it can be spent on anything, and that's that. No more money arguments. It's a total life saver of a system for us.

ReadySetMillionaire

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Re: How do you and you SO split income?
« Reply #23 on: July 14, 2017, 11:26:29 AM »
Dump all your money into one account and pay all expenses from one account.  Anything else is a psychological ploy to make you feel better about yourself, and it's basically worthless. 

Make your life easy: one account; all income goes in; all expenses go out; trust your spouse and yourself to make smart, discretionary purchases; communicate about any large expenses.
No more zero days. Promise yourself that you will do one thing every day that takes you one step closer to your goal.

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Re: How do you and you SO split income?
« Reply #24 on: July 14, 2017, 11:30:05 AM »
My husband and I have been married five years, and we maintain (mostly) separate finances and pay bills according to income. He earns a LOT more than me ($175k vs $65k), so by using this method we are both able to max out retirement accounts and save in taxable accounts too.

We use a simple formula: because he makes 73% of our overall income and I make 27%, we pay 73% and 27% of most household bills and shared expenses, respectively.

There is always a lot of debate around split vs. combined finances, and what it might mean about your marriage if you choose not to combine, blah blah. For us, we are both very independent people, so having independent finances works best.

"By using this method we are both able to max out retirement accounts and save in taxable accounts too."  Why couldn't you max accounts if you had a combined account?

You wouldn't have to waste time and do BS calculations of percentage of income just to pay an electric bill.

Also, you are only "independent" of one another" psychologically. Legally what's yours is his and what's his is yours.

One account, all goes in, all goes out, life's good.
« Last Edit: July 14, 2017, 11:34:10 AM by ReadySetMillionaire »
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nouveauRiche

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Re: How do you and you SO split income?
« Reply #25 on: July 14, 2017, 11:42:31 AM »
We have separate accounts (with each other's names on them) out of laziness.  We just kept our pre-marriage accounts & direct deposits in place.

We're living off of less than DH makes & saving part of his income and all of mine.

All of DH's income goes into "his" checking account and he pays all the bills out of that (and directs some to an attached savings account).

All of my income goes into "my" checking account and we invest that money.

We always discuss/agree on large purchases (and sometimes even small ones).
« Last Edit: July 14, 2017, 12:11:36 PM by nouveauRiche »

kwarden13

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Re: How do you and you SO split income?
« Reply #26 on: July 14, 2017, 11:46:48 AM »
My husband and I have been married five years, and we maintain (mostly) separate finances and pay bills according to income. He earns a LOT more than me ($175k vs $65k), so by using this method we are both able to max out retirement accounts and save in taxable accounts too.

We use a simple formula: because he makes 73% of our overall income and I make 27%, we pay 73% and 27% of most household bills and shared expenses, respectively.

There is always a lot of debate around split vs. combined finances, and what it might mean about your marriage if you choose not to combine, blah blah. For us, we are both very independent people, so having independent finances works best.

This is what we discussed doing. Splitting our expenses based on % income. And also giving a monthly spending allowance to each others separate account.

Lanthiriel

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Re: How do you and you SO split income?
« Reply #27 on: July 14, 2017, 11:55:51 AM »
All $$ goes into one checking account and all $$ (investments, bills, and cc payments) gets paid out of that checking account.  Easy peasy.
We are both maxed on all retirement accounts so those are the same and our brokerage is joint.  We each get a separate/equal amount for "guilt-free" spending but it is just a budget category as all the $$ is still in the same pile.

You just described exactly what we do too :)

We decided on a fair "fun money" monthly allocation together. The "fun money" concept has saved us countless hours of arguments. Before we used to argue about him eating out at work or me going to happy hours. We spent far too much time nitpicking each other's spending habits on rather meaningless stuff that now we don't even discuss. We both have our "allowance" and it can be spent on anything, and that's that. No more money arguments. It's a total life saver of a system for us.

This is exactly our system. We've been doing it for almost 10 years, and it works great. I think it helps that my husband has basically no interest in finance, but he has the password to our Personal Capital account, so he can always check in if he's nervous. I would be very surprised if he ever has.

v8rx7guy

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Re: How do you and you SO split income?
« Reply #28 on: July 14, 2017, 12:01:10 PM »
We use the communal pot method and couldn't possibly imagine it any other way.  We do, however, both have our own side gigs that we use for "fun" money.

FireHiker

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Re: How do you and you SO split income?
« Reply #29 on: July 14, 2017, 12:08:51 PM »
Although we held onto separate accounts for awhile, we did ultimately close them and have everything joint (will be married 9 years next month). We have both our 401k's maxed out. I make about 78% what my husband makes, but both are good salaries. I track every penny that goes in and out and currently pay all bills because he would get lazy about them sometimes and incur a late fee here. Almost every bill is now set up on auto-pay, and I check accounts regularly to make sure nothing is amiss. It works well for us, because we trust that we have the same goal, and I am very detail oriented whereas my husband doesn't want to be bothered with the details, although he does like being able to ask "how much did we spend on x this year vs last" and know that I can answer. I had gone through a divorce before we married so it took me a few years to make the jump to everything being joint. We are MUCH more on top of our finances now that it's more streamlined.

Since we work together we don't have the separate lunch or happy hour sort of thing (well, to be fair, I think the last "happy hour" we attended was a going away affair for someone 3-4 years ago?). If we did work separately I'm not sure how we would track that, but I don't think it would be a big deal since we rarely eat lunch out anymore anyway.

afuera

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Re: How do you and you SO split income?
« Reply #30 on: July 14, 2017, 12:20:43 PM »
All $$ goes into one checking account and all $$ (investments, bills, and cc payments) gets paid out of that checking account.  Easy peasy.
We are both maxed on all retirement accounts so those are the same and our brokerage is joint.  We each get a separate/equal amount for "guilt-free" spending but it is just a budget category as all the $$ is still in the same pile.

You just described exactly what we do too :)

We decided on a fair "fun money" monthly allocation together. The "fun money" concept has saved us countless hours of arguments. Before we used to argue about him eating out at work or me going to happy hours. We spent far too much time nitpicking each other's spending habits on rather meaningless stuff that now we don't even discuss. We both have our "allowance" and it can be spent on anything, and that's that. No more money arguments. It's a total life saver of a system for us.

This is exactly our system. We've been doing it for almost 10 years, and it works great. I think it helps that my husband has basically no interest in finance, but he has the password to our Personal Capital account, so he can always check in if he's nervous. I would be very surprised if he ever has.

We are the same way!  I let Hubs know whenever we hit a NW milestone and he is always surprised haha.
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L. WereBear

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Re: How do you and you SO split income?
« Reply #31 on: July 14, 2017, 12:21:39 PM »
...

Also, you are only "independent" of one another" psychologically. Legally what's yours is his and what's his is yours.

One account, all goes in, all goes out, life's good.
You are severely underrating being only psychologically independent. There are other reasons to have separate or semi-separate finances as well.
In terms of ease I totally agree 1 account would be nice, and that is what my spouse and I wanted to do originally.
Our financial priorities are aligned, we trust each other, and neither of us feels the other spends excessively. But I track every penny and seldom use cash. I can't stand not knowing where things are going. I want to put money into savings, spend less and optimize, then put more money into savings.
My partner wants to deal mostly in cash and will not track. WILL NOT. Doesn't trust cards, credit or debit, due to identity theft. My partner wants to put money into savings then spend freely without worry, because hey we are meeting and exceeding our savings goals.
Try tracking somebody else's cash when they don't save receipts.
I'll also throw in my partner feels more secure with us having separate accounts in case ID theft drains one account, we would still have the security of another. Paranoid? Maybe, but it's an easy way to alleviate that fear.
Combined finances would drive us crazy. So the psychologically independent piece can be important.
But to the OP try what you think will work. If it doesn't, feel free to change until you get something that works. You only need to be accountable to each other and whatever creates the least stress and hostility is best.

powersuitrecall

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Re: How do you and you SO split income?
« Reply #32 on: July 14, 2017, 12:35:40 PM »
Another communal pot here, but as a working couple who make roughly the same amount with aligned goals it seemed like a no-brainer for us.

One thing that's really great about combining finances is that you can focus your savings in the most efficient way possible.  For example, say one spouse get's thrown into a higher tax bracket.  You can choose to prioritize whichever tax advantaged account yields you the largest tax refund.  Not that this couldn't be done with separate finances, but it certainly makes it easier.

Another fun thing is watching 2 paycheques come in.

jamesbond007

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Re: How do you and you SO split income?
« Reply #33 on: July 14, 2017, 12:40:44 PM »
We just have a joint checking and a savings account. Everything goes there and every expense comes from there. Life is short, why complicate?
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FLBiker

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Re: How do you and you SO split income?
« Reply #34 on: July 14, 2017, 12:49:34 PM »
We're married and have basically everything (except retirement accounts) joint.  I manage retirement for both of us.

For me, as someone who has a history of "counting" in relationships (meaning I keep track of what other people do for me and make sure I'm not "getting taken advantage of") making everything "ours" has been extremely helpful.  I think about our finances way less (in a good way) than I would if we were each kicking in to each bill.  I even made my taxable vanguard account (to which nothing has been contributed since we've been together) a joint account.

Starting this fall, I'll make about 2x what DW makes.  She's been SAHM for the last 2+ years.

As other folks have said, you can come up with whatever system works for you, but the most important thing is being 1) roughly on the same page and 2) able to compromise.

Zikoris

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Re: How do you and you SO split income?
« Reply #35 on: July 14, 2017, 01:35:10 PM »
We keep all income separate, pay for our own things, and split joint expenses right down the middle. We're big believers in 100% equal relationships, and neither of us has any interest in subsidizing the other. We've both had a variety of incomes over the years, and ave always operated this way out of principle. Sometimes that means one person end up with less money than the other. Tough shit.
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BFGirl

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Re: How do you and you SO split income?
« Reply #36 on: July 14, 2017, 01:39:24 PM »
...even if you don't combine finances, if you don't have a pre-nup going into this marriage, it doesn't matter that you didn't fully combine them or you did some other breakout.  In the event of divorce, it will be considered that all money earned or debts incurred by either party during the marriage was both "yours".

The post above is something everyone needs to consider going into a marriage.  If there's a divorce, every dollar invested/saved during the marriage gets split 50/50 regardless of who earns more or who spends more.  It's also important to consider that if you're the higher earning spouse you WILL owe your ex alimony unless you can prove that he/she cheated on you.  I know most married people don't want to think about these types of things, but it can't hurt to know what would happen to your finances in the event the marriage doesn't work out.

The division of marital property and whether or not alimony is owed is highly dependent on the laws of the state where the divorce is filed, so these statements are not true for all jurisdictions, but I agree that people should definitely investigate what would likely happen in their jurisdiction in the event of a divorce.

apricity22

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Re: How do you and you SO split income?
« Reply #37 on: July 14, 2017, 02:40:41 PM »
We started off dividing it by income but as our incomes converged we just started splitting it 50/50 as it seemed silly to do the math on a 55/45 split.

BFGirl

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Re: How do you and you SO split income?
« Reply #38 on: July 14, 2017, 03:01:04 PM »
How do you handle finances with an SO if one of you owns the house and the other doesn't?

I'm not quite sure what is fair in this situation and would love to hear how others approach it.

galliver

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Re: How do you and you SO split income?
« Reply #39 on: July 14, 2017, 03:13:03 PM »
BF (of almost 6 years) and I do 50/50 for joint/household expenses, which works out to most of our spending. We have a shared card that buys groceries, household "stuff," gas, (maybe insurance?), plane tickets, hotel rooms, and until recently restaurants*; we also have a joint account that pays the card as well as rent, electric, internet, (maybe insurance?) etc. We contribute equally to the account. Cell phones, clothes/shoes, individual eating out (work lunch, etc), individual travel, all stay in our own accounts/spending.

However, he's perfectly happy toning down his lifestyle to match mine; if when we were apartment hunting he'd insisted he needs pool/dishwasher/additional bedroom/granite countertops/etc (which would have priced us out of my comfort zone), I would have suggested he pay the extra cost of an apartment with those amenities. If he had a fancy food habit where my tastes were extremely simple, we might negotiate how to split that unevenly and fairly (as it stands, we have different but roughly equal food indulgences). Kids would complicate this immensely, especially if childcare hampered one partner's earning potential.

We do plan to get married (he just hasn't formally proposed yet), and when we do we've talked about doing joint pot+individual allotment system.

galliver

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Re: How do you and you SO split income?
« Reply #40 on: July 14, 2017, 03:16:58 PM »
How do you handle finances with an SO if one of you owns the house and the other doesn't?

I'm not quite sure what is fair in this situation and would love to hear how others approach it.

I'm not in this situation but I've seen it discussed on the forums, and IMO the fairest/cleanest option was charging rent (or, of course, *not* charging rent and just having them live with you, if that's ok by all). As far as rent amount, I would say it should be market rate (for a room or half the house/condo if small) or what the partner would pay living separately, whichever is less.

ixtap

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Re: How do you and you SO split income?
« Reply #41 on: July 14, 2017, 03:20:27 PM »
How do you handle finances with an SO if one of you owns the house and the other doesn't?

I'm not quite sure what is fair in this situation and would love to hear how others approach it.

When we were in this situation, the homeowner paid everything related to the house, the other paid groceries and evened up with funding for an IRA. Each paid everything personal, joint spending was negotiated on a case by case. Sometimes covered by the higher earner out of fairness, sometimes covered by the lower earner out of convenience.

Now, we still have separate accounts, but we consider them one pot. We move funds back and forth to maximize savings/minimize fees, rather than to even things up.

Christof

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Re: How do you and you SO split income?
« Reply #42 on: July 14, 2017, 03:56:30 PM »
Ownership is split 50/50, payments are based on income including mortgage. We do have separate accounts since I do have a non-incorporated business that she shouldn't be liable for. Separate accounts have been working for us for over 22 years, but we both have rather practical than romantic views on certain aspects of marriage. We do have spreadsheets that record expenses going back all 22 years...

bender

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Re: How do you and you SO split income?
« Reply #43 on: July 14, 2017, 05:08:26 PM »
Another vote for communal pot here.  This question comes up on occasion and I can never understand how people do it any other way.  With substantially equal incomes (say within 25% of each other), any method seems to work.  When the income split is significant, I don't see any way working other than communal pot.

For example if one makes 2x the other (common situation):
Partner #1 = 50k
Partner #2 = 100k

You decide to split expenses according to income (1/3, 2/3).  Let's really simplify and say this is after tax and after maxed 401ks, etc.  Annual expenses are 100k, leaving 50k per year to be saved, which is great since 401ks are already maxed as well.

Partner #1 owes 33k towards expenses, and has 17k left to invest.
Partner #2 owes 67k towards expenses, and has 33k left to invest.

I can't get past this.  Partner#2 is going to reach FI faster and overall have more power in the relationship due to the bigger bank account.  Looks like eventual trouble for the marriage.  And this is if both partners have the same goals.  If one partner decided to blow all the remaining cash, I think the marriage would end up in trouble sooner.  This is why I see communal pot as the only long term viable solution that works for any level of income.

Edit:  I should add that I married young and we had very little to start with.  In cases of an older couple or second marriage I could see the desire for keeping separate finances. 
« Last Edit: July 15, 2017, 06:58:24 AM by bender »

ixtap

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Re: How do you and you SO split income?
« Reply #44 on: July 14, 2017, 05:42:48 PM »
Another vote for communal pot here.  This question comes up on occasion and I can never understand how people do it any other way.  With substantially equal incomes (say within 25% of each other), any method seems to work.  When the income split is significant, I don't see any way working other than communal pot.

For example if one makes 2x the other (common situation):
Partner #1 = 50k
Partner #2 = 100k

You decide to split expenses according to income (1/3, 2/3).  Let's really simplify and say this is after tax and after maxed 401ks, etc.  Annual expenses are 100k, leaving 50k per year to be saved, which is great since 401ks are already maxed as well.

Partner #1 owes 33k towards expenses, and has 17k left to invest.
Partner #2 owes 67k towards expenses, and has 33k left to invest.

I can't get past this.  Partner#2 is going to reach FI faster and overall have more power in the relationship due to the bigger bank account.  Looks like eventual trouble for the marriage.  And this is if both partners have the same goals.  If one partner decided to blow all the remaining cash, I think the marriage would end up in trouble sooner.  This is why I see communal pot as the only long term viable solution that works for any level of income.

Just because we don't ascribe to it personally doesn't mean it won't work. Many of the early retirement bloggers calculate separately and there are many stories around of couples retiring at different times.

The lower earner might have good reasons for wanting to be able to provide for themselves, older couples might be concerned about how their individual kids inherit, the possibilities are quite extensive.

wenchsenior

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Re: How do you and you SO split income?
« Reply #45 on: July 14, 2017, 05:48:11 PM »
There's always debate around this, and I've been on both sides of the debate.

Let's take a step back and ask - what are your partner's long-term goals, what are your goals, and what goals do you share? How does marriage fit into your goals? Is marriage an agreement of exchange of favors, transactions that you'll attempt to balance, until death do you part, or does it mean something else to you?

I've seen some relationships where everything seems to be a transaction. "You owe me this, because I did that." In other relationships, you see more charity. "I know my partner works very hard doing that, so I try to always do this, so they don't to have to worry about it." Also, sometimes you see teamwork. "I really enjoy doing this, and I'm good at it, but my partner is much better at doing that, so they take full responsibility for it."

Now, a marriage doesn't have to be "the unified one" to be successful and mutually beneficial. However, the decisions around money (like all marriage decisions) should be arrived at together by looking at your shared (and individual) goals, and figuring out how to accomplish them. Trying to "split money fairly" is one approach, but to me, it sounds like the best approach if you each have largely independent goals you are working towards, and just want to use the marriage as a way to benefit each individual.

So before you choose an approach, what kind of shared goals do you have, and what kind of marriage do you want to have?

Excellent post.


SwordGuy

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Re: How do you and you SO split income?
« Reply #46 on: July 14, 2017, 06:26:49 PM »
We do an income based split, which I think is the most fair whenever there's any significant difference in income.

(emphasis mine.)

Well, I'm not so sure about the "most fair" claim.

What if one spouse sacrifices their career prospects for the other's?  Example: A military spouse who relocates when their spouse is transferred to a new duty station.

What if one parent drops out of the work force to care for the children?  That's not only a short term income hit, it's a long term income hit.  Just like saving for retirement EARLY is really important for compounding, that spouse is foregoing compounding on their raises and their network of connections.    Should they be penalized in fun money for the rest of their days?

What if one spouse gets ill and can't work or loses their ability to be competitive at work?  It's the luck of the draw, there but for the grace of God (or random events in the universe, your preference) go us all.   Would you penalize your spouse in those circumstances?

What if one spouse gets injured at the beach protecting the kids or their spouse from a shark?  (Don't laugh, my cousin put herself between a shark and her kids.   She just got lucky and the shark wandered off.)

My spouse teaches at the university.   This gives her a lot of flexibility in dealing with life's dammits that would otherwise require one of us to use one of our precious few vacation days to deal with.   Should they not only have to spend their spare time meeting with the electrician, plumber, etc. AND get less spending money for the privilege, too?

Feel free to do what you (both) want when it comes to how you deal with this issue.

I for one would not marry someone who did not consider it one pot of money, indeed OUR pot of money.
(And also be responsible with it, of course.)


RetirementDreaming

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Re: How do you and you SO split income?
« Reply #47 on: July 14, 2017, 06:48:48 PM »
One pot of money for us.  Well, several accounts but all joint and equally owned accounts.  13 years ago when we got married he was happy to not have to deal with savings/investing/paying bills anymore.

Added:  He makes more money (about 80K more than me) but it's always "our" money.  It's the family money to accomplish our goals.
« Last Edit: July 14, 2017, 06:51:04 PM by RetirementDreaming »

batemama

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Re: How do you and you SO split income?
« Reply #48 on: July 14, 2017, 10:14:51 PM »
I think it comes down to what works best for you, and you might not get it right the first (or second) time around. My husband and I have one bank account. All incomes and expenses go in and out of there, but that's not how we started out. It took us 3-4 years to figure out an arrangement that worked best for us.

My parents have a system that makes no sense to anyone but themselves. They have separate bank accounts, and expenses are arbitrarily split. My dad might pay for the power, gas, and water while my mom pays for groceries (but my dad buys groceries too if it's more convenient). My dad buys health insurance for the year, and my mom pays him back in cash monthly for her portion of the premium. One pays for internet; the other pays fo Netflix. Each is responsible for expenses from their own things (vet bills, car insurance or repairs, etc.), but if one is short funds, the other helps out financially. It's seriously bizarre, but it's what they have found works for them.

All this to say, it doesn't matter what way you split the bills as long as you both are satisfied with the arrangement. Communication is key. No sense in someone holding a grudge for something they perceive as unfair.

justchristine

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Re: How do you and you SO split income?
« Reply #49 on: July 15, 2017, 05:54:23 AM »
We aren't married, so we keep thing separate.  We earn the same income so split expenses roughly 50/50.  SO owns the house so we tallied up what the mortgage and utilities average out to.  I put half of that amount into a brokerage account for the SO.  If we break up the money is his.  If he were to die, the house would go to his kid and I get the money in the account.  Otherwise the account acts as his emergency fund to deal with big household repairs.  For non-household expenses, we just take turns paying.  It's not exact and we don't keep a strict account or anything...it just sort of works.