8/20/2012 2:15 PM ET|
Unequal pay? How to split the bills
Decide whether usage matters, or income, or both. If you're in a committed relationship, dividing expenses by income may feel appropriate, with the one making 70% of the income paying 70% of the bills, for example. In roommate situations, that can feel weird, but an even split may not be truly fair if one person gets the master bedroom with en suite bathroom and another gets a tiny room with no closet. Sites such as Splitwise (which is also an app for iPhone and Android) can help you figure out a more equitable split. The roommate with the lower income can be assigned the smaller space. Splitwise also can advise you about how to handle other vexing roommate matters, such as long-term guests and your roommate's over-every-night girlfriend.
Consider some trade-offs. Not every contribution has to be monetary. The roommate who works at home, for example, could chip in more for the utility bill, or he could offer to take care of the housecleaning. Someone who's laid off could do the same or take responsibility for fixing the evening meal. Again, your approach may differ based on the relationship and the situation.
"You have a choice whether you're going to be generous or whether they need to find another place to live," Pluhar said. Even if you decide to carry a roommate or a lover financially, you may want to think about how long you're willing to do so, she added.
Limit your overhead. If you're lovers rather than friends, don't add financial pressures to the already-tricky emotional task of combining households, advised Beth Kobliner, the author of "Get a Financial Life: Personal Finance in Your Twenties and Thirties."
"If one person makes significantly more money than the other, there's temptation to live in nicer digs," said Kobliner, who advised against upgrading. "What often happens is that the wealthier partner carries rent, but this can add other pressures."
Instead, consider finding a place that's affordable for both and then split everything else, Kobliner said.
"This will help you start off the relationship on equal footing and enable you to test the waters as financial partners," Kobliner said. "As the relationship becomes more serious, or if you're married, you might be looking at expenses from a household perspective rather than an individual one. Then you may want to create a new account to cover shared expenses like rent and food, even if you have 'yours and mine' accounts for other items."
And speaking of which:
Think through your urge to merge. Half of married couples combine all of their finances and have only joint accounts, according to a Harris Interactive poll, while 18% have only separate accounts. The rest combine the two approaches, perhaps with a joint account for household expenses and separate accounts for no-questions-asked spending.
All of these approaches are valid. I hear from long-married couples who swear by keeping their finances all in one pot, strictly separate or a mix of both.
"The whole point should be to combine resources, not have them remain separate," wrote Ka-el Damone Jordan of College Park, Md.
But Susan Wells of Fort Dodge, Iowa, wrote that separate accounts "work great for us."
"I like having it that way and so does my husband. I feel free to do whatever I want with my discretionary income and so does he," she wrote. "I don't have to hide what I spent on my new sweater if I paid for it with my own money. I know women who do hide that stuff and it's not right. That hiding says more about a marriage than having separate accounts!"
If you're considering keeping your finances separate, think about how you'll create and finance joint goals, like saving for retirement and vacations.
If you're planning to merge your accounts, consider how you'll handle any obligations that predate your relationship.
Imagine, for example, that your beloved is short on the child support payment one month or needs to pay for her kid's orthodontia. If you're OK with your partner dipping into your joint vacation fund to pay these expenses, then merging everything is probably fine. If, on the other hand, your right eye started to twitch at the mere thought of such a raid, then perhaps your honey should set up separate checking and savings accounts to cover these bills.
I'll also put in a pitch for having joint accounts with slush funds on the side. That's how my husband and I approach it. Julie Fulcher of Snellville, Ga., likes this method, too. She and her husband contribute 80% of their combined incomes to a household account, with the rest split into separate accounts for each.
This approach "works out really well for debt management, variable bills and keeps us talking about finances," Fulcher wrote, "without picking apart me spending money on hair, nails, etc. and him spending money on football, video games, etc."
And peace in the home, whether you're roommates or something more, is a wonderful gift to share.
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