“How should we split the bills?”
Suze says (on the Suze Orman Show which aired 2007/01/13) this is the most common question she gets from couples. (I’d have thought she’d hear “Should we have separate accounts, or joint?” more, but what do I know.)
For most folks, the default answer to the bill-splitting quandary is 50/50. But Suze suggests that it’s almost never this easy (no kidding!). And that for couples where the two spouses earn significantly different amounts (which would be most couples, probably), splitting the bills 50/50 will almost always lead to resentment and frustration.
Here’s the fictional household setup that Suze presented as an example:
Partner #1 makes $7k/month.
Partner #2 makes $3k/month.
Household expenses total $3k/month.
In the case above, Suze would suggest that the bills be split 70/30, rather than 50/50. This way, each partner/spouse is responsible for an equal percentage of the bills rather than an equal dollar amount. They don’t earn equal dollar amounts, so they shouldn’t pay equal dollar amounts.
After all, paying $1,500 worth of bills (a 50/50 split) drains the $3k earner a lot more, percentage-wise, than it does the $7k earner.
My first thought, of course, is that there are roughly four couples out there making $10k per month and spending only $3k/month, so the example is kind of flimsy in that regard. Numbers like that just ain’t happening for Joe and Jane Sixpack. Still, I recognize that it’s the math that matters.
I’m all for fairness in relationships and finances, and Suze’s idea makes sense to me: Pay the bills in the same percentage that the household income is split. Still, I can already hear the uproar from the “But we’re married, and we’re ONE now!” crowd. “What’s hers is mine, and what’s mine is hers! The only percentage that matters is the one we’re paying on our Discover card!”
And they have a valid case. Really, I think Suze’s point was meant more for non-married couples, but she wasn’t really clear on this. My advice, in any case, would be this:
Just do what works.
And if what you’re doing isn’t working, change it.
Golbguru wrote:
I am glad about “Really, I think Suze’s point was meant more for non-married couples, but she wasn’t really clear on this.”
Married couples doing that sounds pretty ridiculous to me
. But that’s just me…there may be couple who do that ..and I would be very curious as to why anyone couple would split stuff that way.
L. Marie Joseph wrote:
I think to each it’s own!
My husband and I do not do percentages.
Percentages is just plain dumb! in my opinion.
It sounds like more of a roomate plan.
Anonymous wrote:
I agree with Suze’s suggestion at the same time it depends on the couple whether they want to split or not. If any couple want to split the bills then this is the best way to do.
Personal Finance Guide 101
Anonymous wrote:
Are you kidding me…maybe for roommates, but not married couples. Marriage is a 50-50 thing. They have 7k and 3k incomes, they have a 10k family income and 3k family expense. All splitting the bills leads to is an easier split to the marriage.
Jesse wrote:
You’re asking for problems if you’re married and doing this. It’s like you’re only putting one foot in the water or something.
Anonymous wrote:
This is a nice “technical and mathematical” solution but wouldn’t work in a solid marriage.
Group together and set a spending plan is the best solution.
Anonymous wrote:
Suze’s % formula for splitting finances actually SAVED my marriage. Let me explain. I’ve been married for 5 years to a very sweet man, but his behavior around money is erratic and extremely difficult for me to accept. We had only one joint account for years and all of our income went into it and all bills were paid out of it. My husband is not as responsible with money as I am. For example, he has gotten speeding, parking tickets, and is often charged for overloading his luggage at the airport, etc. He just isn’t careful with his money at all. Also, he comes from a large family with lots of siblings and nieces and nephews and insists on buying them gifts for all birthdays and holidays and everything else under the sun, including when they lose their teeth! This has been killing us financially. I come from a small family, so I spend less on gifts. I also make more income than my husband and I was the one taking care of paying all the bills and balancing the checkbook and was frustrated with his irresponsible spending habits. We argued daily about his poor spending habits to the point that he went out and bought a motorcycle without telling me! He claimed he “thought we had the money”. Well, that was the last straw. Before considering a separation from my husband because our finances were so distressing, I finally used Suze’s advice to use our joint account ONLY for shared expenses (such as the mortgage and electric bill), we each contribute the same % of our monthly income PROPORTIONAL to how much we make as individuals, and then we each set up our own baking accounts to manage our own money for personal and incidental expenses. Now, we NEVER argue about money, my husband can spend as much as he wants on his side of the family for gifts and he can buy what he wants without me getting upset. As long as a part of his income goes into the shared expenses with my income….I am happy. He’s happy too now that we can focus on the more important things in our marriage, like falling in love again. Suze’s right! People first, then money. Her advice truly saved our marriage.
Anonymous wrote:
I don;t understand how the majority of you can say that this doesn’t work for married couples, that its a “ROOMATE” plan. The concept is a no brainer…..if I make 5K more than my wife, or vice versa, the one with the bigger salary should assume a higher percentage of bills. How doesn;t that make sense? For a person who makes 10K (monthly) vs a person with 4K (monthly) splitting 2K in bills at 1K each takes a bigger toll on the 4K income than it does the 10K income. Thats only fair.
Anonymous wrote:
To complicate matters futher enter into blended families, should one partner cover the expenses of the other partners children? is that fair? How would you offset that so that it is? That formula would work fine 50/50 for two people, but more tweaking would need done for 4 or more ie. two adults two or more children from either.
Anonymous wrote:
I totally agree with Suze's formula b/c it enables a personal financial independence as well as at the same time it gives a fair share of financial responsibility for each person in marriage. For years, I was pouring my entire salary to our only joint acount, b/c my husband insisted this is the way I must compensate (keep up) my "fair" share to household bills b/c of his 3x higher salary than mine. Turned out, while I was financing our household with ALL my salary, he did "fill in" the remaing rest of budget to be paid, but w/a significantly smaller part of $ on his side -although he makes 3x more than I do , so he still had plenty of $ left to create a few nice & chunky personal accounts on his name only which he refuses to share with me , nor to even talk about them at all. Whenever I wanted to discuss a fair financial coverage/distributions for household basic items , he always said: " Fine, let's do it, but then you have to cover everything by fifty-fifty division, no matter how much (in my case, "little", I'd say-comparing to his $) you earn." So, folks, imagine this: if our monthly mortgage was ,(I simplified the figures,for easier calculating, here) say, $ 3K and my monthly salary was $2K, only, at that time , thus, by strictly 50:50 (w/o huge salary difference consideration on his part), I'd have to come up w/ $ 1.5K just for mortgage !(which w'd leave me with $ 500 left from my $ 2K salary. Then the remaining regular monthly joint bills (utilities, gas, grocery, etc.) would add up , e.g., to $ 2K. Since my hubby has insisted on 50:50 , then I 'd have to provide additional $1K (but remember I only had $500 left out of my salary). So how could I solve this ridiculous financial management scenario ? (maybe, by getting the 2nd job , or what ?) So far, I have always "caved in" , and I have been simply giving him my whole salary as I stated in the beginning.
P.S. I changed jobs as well as careers in the past in order to make more money, but b/c of his particular profession and career path, it is impossible to match his salary by mine. I am however still bargaining with him on this issue, and for my personal financial freedom; also my closest relative-confidante (and no, it is NOT my mother) noticed on her own what's going on, and is "diplomatically" trying to negotiate with him by trying to bring him to some (financial) senses , and husband refuses any counseling, I have also suggested; so I am now running out of ideas . On the contrary- I am actually getting pretty depressed. This has been going on like that for 7 years of our marriage . I have to ask him for 'allowance' if I want to buy a personal item, as I have no money of my own left from my own salary, and it is quite humiliating. I am starting to think, (and I am not the only one) that this is an emotional, mental, and financial abuse and a control issue from my husband's side.I do not even have money to retain a family lawyer as I am running out of coping mechanisms and getting into opposite -being more and more desperate as there is no improvement from his side.We are not big spenders-on the contrary: we buy only general brand food items, and generic prescription medications, we do not go on vacation, he refuses to buy gifts even for his parents, although he bought a nice and expensive foreign car for himself, but mostly drives my hybrid to save on gas, he doesn't want to invite anybody over as he w'd have to provide (and partially pay) for refreshments, he "canceled" our B-days, so he doesn't have to spend any money , etc. (and he gets upset if I insist on buying ,at least, a little something as a reminder for, or going out, for an anniversary). It seems to me as he is turning into a Moliere's main character "The Pennypincher"…. I am sorry, I got carried away – I am afraid this is other subject/issue, quite apart from a financial issue this Blog is about….. Have a nice day.
Anonymous wrote:
I'm confused. Normally I make a lil shy of $100k per yr. I have a two yr old and work PT 16hrs to care for her. we have furloughs now so I make $45k. My husband works from home and takes care of her. This yr he made$300k. He pays household bills. I pay food bills, cell bills, activities for our daughter and learning toys. I also provide health insurance to our family. I pay for my student loans and condo that I had before marriage. My condo is rented for $600 less than expenses. I live paycheck to paycheck. My husband keeps his earnings. He periodically makes comments about my lack of contributing more. I feel bad. Today I noticed I paid at least twice as much of our taxes. Now I feel annoyed, unappreciated, and resentful. To me, this financial situation is like 'roommates'. Everyone out for him/herself. It's sad. Why can't there b an easy obvios solution?
Anonymous wrote:
"I'm confused. Normally I make a lil shy of $100k per yr. I have a two yr old and work PT 16hrs to care for her. we have furloughs now so I make $45k. My husband works from home and takes care of her. This yr he made$300k. He pays household bills. I pay food bills, cell bills, activities for our daughter and learning toys. I also provide health insurance to our family. I pay for my student loans and condo that I had before marriage. My condo is rented for $600 less than expenses. I live paycheck to paycheck. My husband keeps his earnings. He periodically makes comments about my lack of contributing more. I feel bad. Today I noticed I paid at least twice as much of our taxes. Now I feel annoyed, unappreciated, and resentful. To me, this financial situation is like 'roommates'. Everyone out for him/herself. It's sad. Why can't there b an easy obvios solution?"
You did not read this story at all. This is not suggesting 50/50 or breaking the expenses by "you pay the house note, I'll pay the utilities". IF YOU MAKE 1/3 OF THE INCOME, YOU PAY 33% OF THE BILLS. This is not hard people, and there is nothing to resent your loved one for.
Bridget wrote:
I live with my fiance and make more money than he does. I also have rental income from my property that I lived in before we joined in his house. I decided to subtract his paycheck from mine, and give him half of the difference and half of my rental income. This mean we get the same amount of money to spend every month.
Thank, ALL the bills are pooled (including my student loan), and we split them equally. After that we get to split what is left over for personal spending.
This was my idea, and I thought if we didn’t do it this way, I would feel resentful that I always had to pay for everything, and I am sure it probably wouldn’t feel good to him either.
Even though I came up with the plan it is still a little difficult to think I am giving up what used to be a lot of extra monthly money, but I get a lot of benefit from the situation too, like a nice big house and a great husband that I love!