Jan 19 How To Split Bills Based on Income & Unlock Relationship Peace

Getting married means making big decisions, including how you will share bills. Finding the right approach can create a strong foundation for your financial future.

Many couples split bills based on how much each partner earns. It can initially feel a bit weird, but it will make sense once you get into a groove.

Here's how to split bills based on income to make both partners feel like they are part of a team and have a say in the finances.

*Note: The information provided herein is not a substitute for legal advice. For specific, individualized legal advice, please consult a qualified attorney.

The Importance of Fair Bill Splitting as a Couple

You know splitting bills with your partner is an important part of your relationship. It can make both partners feel equal and keep peace and harmony.

Having a happy and healthy relationship can be much easier when one person doesn't feel like all the bills fall on their shoulders.

You can split bills using joint or separate accounts, whichever works best for your relationship.

Is It Normal To Split the Bill Based on Income in a Relationship?

Many couples wonder how they should split joint bills and if splitting expenses should be based on income. Typically, this is the most peaceful way to split bills because it allows splitting based on how much a person makes.

If you split bills 50/50, it may not be fair to a partner who makes less money, as this split could take up a greater portion of their earnings, leaving them with little to no money left. But, if you have equal income, it may be easier.

Related Article: 12 Money Tips for Couples

How To Split Bills Based on Income

To split expenses based on income, you have several options. There isn't a right or wrong way to split bills, and you can have a separate or joint account.

However, comparing and discussing your options with your partner can help you choose the best way.

Proportional Splitting

Proportional bill splitting bases the expenses a partner pays on their income. This works best for partners who have unequal incomes.

The easiest way to use this method is to determine the total household income and the percentage each partner provides for income-based bill splitting. You can then use your personal accounts to pay your portion of the bills.

Equal Contribution

Some couples prefer to split expenses down the middle, 50/50. This equal contribution method ensures both partners feel equal because it doesn't put the brunt of the household expenses on one partner or the other.

There is a downside, though. Not all creditors and service providers allow multiple payments. So, this could make it challenging to make your payments.

You also rely on both partners to make their payments on time. If one partner pays late, you could be on the hook for late fees, which may damage your credit.

Combine Finances

To offset the risk of late payments or one person forgetting to pay their portion of the bill, you can combine finances with a joint checking account to manage the bills.

For example, splitting the rent, utilities, and streaming services bills down the middle means each partner must contribute 50% of the costs.

Depositing the money in a joint checking account will make paying the bills on time easier because the funds come from a single account.

Alternating Responsibility

Some couples prefer to alternate responsibility for shared expenses. This method allows more time to save money to pay the bills while allowing more flexibility to use their earnings.

Rotating payments between partners requires organization and responsibility but allows more money-saving opportunities.

Customized Approach

If none of the above methods for splitting bills works for your relationship, you can tweak a method to fit your needs the best.

For example, if there are some expenses your partner has that aren't joint expenses, you may want them to be responsible for that bill. This will increase their financial responsibility but hold them accountable for their incurred bills.

This is especially important when one partner has a lot of debt payments, such as credit card debt or student loan payments. This may be a debt you don't want to take on and instead, only split the shared bills.

If you have the capability, you may consider covering a larger percentage of the shared expenses, allowing your partner more money to cover their individual expenses.

Some Expenses That Can Be Split Based on Income

You'll share many expenses when you take those big steps: moving in together or getting married!

Some couples only split necessary household bills, like housing and utilities; others share all expenses. Here are some common expenses to consider.

Rent/Mortgage

Housing is an easy expense to share because you both use it. Splitting the mortgage or rent down the middle often makes sense unless you are in a relationship with one spouse who earns much more than the other.

If you own a house, don't forget about real estate taxes and homeowner's insurance, as those are a part of the housing expenses.

Utilities

Utilities are another easy bill to split. You both use water, electricity, and gas, so it makes sense that you both contribute equally.

If you don't want to share them due to complicated finances, you can assign certain bills to each person.

For example, you may take the gas and electric bills, and your partner will take the water and gas bills.

Groceries

Groceries are one of those variable expenses that change from week to week. You can split the bills down the middle, shop separately, or take turns footing the grocery bill.

It depends on how you handle food in your house, who does the cooking, and who eats most. If it's equal, split it down the middle, but if one partner is on a special diet or needs more food, you may consider covering your own grocery bills.

Vacations

Vacations are usually a joint goal, so most couples split expenses for them. Since it's something you need to save for, add it to your budget, making it an expense you 'pay' monthly.

Watching your progress toward your vacation goal can be rewarding and exciting in your relationship.

Date Nights/Entertainment

Date nights and entertainment can also be a budget category you save for in your joint bank account. Budgeting your entertainment is a good way to ensure you don't overspend and always have money to have fun together.

How To Calculate the Income-Based Split

If you decide splitting bills using the income-based approach is best, here's how.

Take your total household income and determine what percentage of it each partner makes.

For example, if you make 60% of the total household income and they make 40%, you could split bills 60/40.

This ensures both partners pay the proportion they can afford without using up all of the partner's income, who makes less money, creating a fair division of expenses.

Coming to a Peaceful Approach for Splitting Bills in Your Relationship

Deciding how you're sharing bills can be a big decision. Whether you have equal income or one person makes more than the other, there can be a lot of questions, confusion, and frustration. Even a great plan requires communication and adjustments as life evolves.

Working with a financial counselor, you can get help splitting bills and keeping harmony in your marriage. If you're ready, schedule a consultation today!

FAQs

What if Our Incomes Fluctuate or One of Us Has Irregular Earnings?

If one or both partners' income fluctuates because they earn a commission or get paid hourly, work on a budget that meets the irregular income.

Budget for the lowest amount of income the partner earns so there's never a risk that the bills aren't paid on time.

Should We Split All Bills Based on Income, or Are There Exceptions?

Every person pays and splits bills differently. Some prefer to split all bills based on income; others split specific bills, like housing, utilities, or any 100% shared expenses.

What if One Partner Earns Considerably More Than the Other?

When one person earns more than the other, the higher-earning partner should take on a larger percentage of the shared expenses.

This allows the lower-earning partner to have enough money to cover their portion of the bills and still have money left without feeling like they are in over their head.

Is It Better To Have Separate Bank Accounts and Split Bills Manually?

Every couple is different. Some prefer a shared bank account to pay the bills, and others prefer each partner to have individual bank accounts and split the bills manually.

There is no right or wrong way to split the bills. It depends on your financial circumstances and what makes you and your partner most comfortable.

Should We Get Legal Advice When Setting up a Financial Arrangement?

Splitting bills may not require legal advice; however, if you set up a prenup or postnup for your finances, you should seek legal advice.

It's best to work with a financial coach when setting up a financial arrangement, including setting financial goals and deciding how to share expenses.

You Can Decide If Splitting Bills By Income Is Right For Your Relationship

Knowing how to split bills based on income is essential when you get married or live with a partner.

Figuring out who pays which bills and how you'll handle joint bills is important. The earlier you iron out the details, the sooner you can enjoy marriage without worrying about finances.

If you're ready to take your relationship to the next level and you need help splitting bills, schedule a free consultation today!

Want to level up your game around money in your relationship? My free quiz will help you learn your Couple’s Money Personality Type AND how you can grow from there!

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Adam Kol is The Couples Financial Coach. He helps couples go from financial overwhelm or fighting to clarity, teamwork, and peace of mind.

Adam is a Certified Financial Therapist-I™, Certified Mediator, and Tax Attorney with a Duke Law degree and a Master's in Tax Law from NYU. He is a husband, dad, and musician, as well.

Adam's wisdom has been shared with The Wall Street Journal, the Baltimore Ravens, CNBC, NewsNation, and more.