Money is the biggest problem when it comes to maintaining long-term and healthy relationships. It’s the number one reason why marriages end in divorce.
And even if you’re just cohabitating with a roommate or two, it’s still a big reason why relationships end. Worst of all, talking about money makes people feel uncomfortable.
Even when they’re discussing it with their life partners. But the only way to ensure that things are even and a relationship stays harmonious is with open and honest discussions about finances.
To help you get the discussion started, we are sharing with you our top tips on how to split the bills and we’ll show you how to do it using fraction calculators.
How to Split Your Bills When You Have Roommates
There are a few options when you’re splitting your bills with one or more roommates. To make it easier on everyone, make sure everyone involved has agreed to whichever plan makes the most sense before anyone moves in.
If you are already living together and it’s not working, the time is now to sit everyone down to come up with a plan everyone can live with.
Usage Based
One way to manage finances when there is more than one person paying the bills is to base it on usage. Not everyone cares about watching cable tv, but if you love sports, perhaps you can’t imagine life without ESPN.
Choosing usage-based options means the person who uses the amenities the most pays the most for them. If you’re someone who cranks up the A/C in their bedroom all summer long while someone else opts for a fan, you should pay more money towards that bill.
However, this method only works if you all have a clear conversation as to how this method will work best for your household. Do not leave this conversation until just before the bill is due and then fight over your differing views on what “usage” means.
Instead, clearly outline and set standards early on to avoid arguments. To help you determine how to more evenly split your bills based on usage, try this fraction calculator.
50/50
Splitting your bills 50/50 can work in either a roommate or a marriage/partnership scenario. It’s the most uncomplicated method.
If you use this method, it’s assumed that everything is split and used down the middle. Make sure everyone is on board with this method from the beginning.
Splitting Your Bills When Married or in a Partnership
It’s a little different when you’re in a marriage or partnership. But it doesn’t make talking about finances any easier on you and your loved one.
However, it’s important to have this conversation as soon as possible if you hope to make your relationship to last.
Separate Bank Accounts
One very common, and very effective way to manage finances as a married couple is to keep separate bank accounts. Couples then have one shared bank account where they pay their shared bills from.
Their credit cards and paychecks are kept separate but a certain amount from each of their personal accounts is placed in a shared account each month. From that shared account big household expenses like rent and utilities.
For those who don’t want to share an account, you can just have one person pay the bill and the other writes a check for half the amount of all the shared expenses each month.
You can also pay different bills and then reconcile the difference each month.
Income-Based
Sometimes in a partnership or marriage, one person earns far more than the other. And it can often cause problems if neither party decides to talk about it.
If you choose to go this route, start by adding up the incomes of both individuals. Then divide the largest income by that number.
If you earn $100,000 per year and your partner earns $50,000 then you earn 50% more than your partner. For this scenario to work, you would have your partner contribute 50% less than you for all the bills.
This factoring calculator can help you determine how best to split your bills.
However, if you earn far more than your partner and your ideas about how you want to live aren’t the same then there may be some problems. Also, if you expect that because you’re paying more in bills that the other person should, therefore, let you make all decisions, that puts the relationship in an unequal standing.
Helpful Tips to Manage Finances
No matter how you are splitting your bills and no matter if it’s with your life partner or a few roommates whose names you barely remember, we have some extra tips to make the experience better.
Plan for the Worst
Roommates are fickle. One may even leave in the middle of the night without telling anyone or paying the bills.
Your spouse may leave in the middle of the night as well. Someone may become too sick to work or pass away. Bad things can and do happen.
Planning for the worst while hoping for the best means you can weather any storm that may hit you but it won’t take you out.
Don’t Share Debts
Do not take on your partner’s debts. It doesn’t matter how much you love each other, it’s not a good idea. Let family members cosign for them because otherwise if they default, it ruins your credit or leaves you on the hook to pay up.
Don’t Buy Things Together
Sure, it’s fun to pick out your flatware together, but if you opt to purchase big ticket items like a house or your cars together, that’s when things get messy.
Should the relationship end it’s much easier to part ways if everyone knows who bought what. That includes the furniture as well. Write it down if you don’t think you’ll remember and keep it somewhere safe, along with the receipts.
Create a Budget
It’s always easier to manage your finances when you know what to expect every month. There are certain constants to paying bills.
Creating a budget will help ensure you can pay your bills on time and even save for the future. Click here to learn how to create a budget.