How To Split Your Household Bills | Journey to Saving

How to Split Your Household Bills After Moving In Together

Hi everyone! I hope your week is going well so far. I have a special treat for you today!

I’m still catching up after FinCon and being thankful that I haven’t been in a car for the past two days, so I am very glad to be introducing you all to the wonderful Melissa over at Sunburnt Saver

She is here to talk about how to split your household bills when you move in with your significant other! As some of you may recall, back in our old apartment, R and I split everything pretty much down the middle. We went with the “his and hers” option Melissa discusses.

However, when we relocated back in April, we made the decision to combine our finances. It has really simplified our lives (financially and otherwise), but I know it’s not a decision many come to early on.

That’s where Melissa comes in. She’s going to highlight 3 ways to split the household budget with your significant other, so read on to find out what she recommends! And then go check out her beautifully designed blog and show her some support, okay? 


 

How To Split Your Household Bills | Journey to SavingAre you thinking of moving in with your significant other, or are you planning on moving in with your spouse? It might not be the most romantic thing to think about, but before you take the leap, it’s time to have the money conversation. You two will need to talk about how to split your household bills after moving together, once you’ve determined what bills you two have and how much you both owe on a monthly basis.

First Step: Know Your Own Monthly Income and Expenses

The number one thing couples fight about in relationships is money. Unfortunately, much of this is because couples didn’t talk about their finances before moving in together. Don’t be a statistic! Take an hour or so out of your blissful day together to discuss finances now, before you have your first big fight (and trust me, you’ll have one. Just don’t let it be about money!).

The first thing you will want to do is determine your own monthly income and expenses. When B and I moved in together, I didn’t actually know how much I spent each month. Before we sat down, we both went over our individual expenses and came up with a ballpark estimate of how much we spent on our own ‘stuff.’ This includes the variable expenses, like gas, groceries, and personal products. For more information on structuring your budget, you can check out my post on how to set up a budget from scratch.

We then determined how much we brought in monthly. From there, subtract out the expenses and voila, you have savings! You can go further and determine if you want to have a joint savings account, but for the purpose of this post, we’ll stop and get on to determining who pays what.

At this point, you will have to make a decision that has plagued hundreds, if not thousands of couples before: do you combine your finances, keep them separate, or do a mixture of both?

Option One: Ours

Option one is generally seen as the option that (some) married couples choose: combining finances entirely. This is generally seen as good if you don’t have a whole lot of debt, or if one spouse is planning on being a stay-at-home-parent.

Ours - Option 1 to splitting household bills | Journey to SavingThis option is preferable if you don’t have a lot of debt (student, consumer, or other) because one person isn’t taking out, say, $400 a month for ‘his’ student loans or ‘her’ consumer debt. Taking that much out for one person’s debt can build resentment, so joining your finances completely is best seen as an option for those who are pretty much equal.

Tip: Before combining finances entirely, talk about everything. In fact, this method should probably be called ‘are you absolutely sure you’re on the same page? No seriously, check. Write it down.’ The thing about combining finances completely is that your spouse sees everything you buy. Everything. Every little hair tie, salon visit, iPhone 6 Plus purchase, hair gel, underwear, etc.

Again, this is fine, but you and your spouse/SO should discuss this ahead of time and either set up a ‘fun money’ amount that you can both spend, no questions asked, or you should determine how much you both want to save monthly.

By setting up a fun money maximum ($50, for example) or determining how much savings you have to have by the end of the month, this allows for a little ‘play’ in your budget to accommodate those one-off purchases (like hair ties or underwear that you randomly need), or for things you like to splurge on (like a visit to the salon or some new accessory for your gadget).

Option Two: His and Hers

The ‘his and hers’ option means you both keep your finances completely separate, but you split the household bills equally (or based on who makes more) and pay for your ‘assigned’ household bills.

This option is generally for couples that have just moved in together, or marriage isn’t on the horizon, but that’s not necessarily true anymore. More people are using the ‘his and her’ option, partly out of convenience (no opening a joint checking account) and partly because they just don’t want to combine finances.

His & Hers - Option 2 for splitting the household bills | Journey to SavingFor example, B and I have been together almost 5 years, and marriage is on the horizon, but we’re not sure we will ever combine finances. For me, I grew up watching one parent control the purse strings, because my Mom was the stay-at-home parent, and I told myself I wanted to control my own money, even if I made mistakes along the way.

For his part, B grew up with two working parents who combined finances and didn’t argue about money, and they taught him really great money skills from a young age. Due to our different, but complementary backgrounds, we came into the relationship wanting to retain our autonomy.

Tip: Prioritize who will pay bills, and still talk about how much money you want to save monthly. For us, B owns the house, so he pays the mortgage and all bills associated with owning a house (electricity, gas, water) – we split those bills equally, and I transfer money from my bank account to him electronically. B doesn’t care about owning a phone at all, while I love my phone and data plan, so I pay for our phones entirely. Since I make a bit more, I’m fine with that ‘extra’ expense, since it is one I’d have for myself regardless.

Caveat: With this option, you both have to be responsible for your bills, but especially the ‘big bills’ payer. B has a monthly reminder on his phone and computer that reminds him when the mortgage and electric bills are due (our two biggest expenses), and he reminds me to transfer the money over to him. This means I have to be extra responsible too, because as the one not actually paying the bill, it’s easy to forget to transfer over money. You have to think of it as another bill to pay.

Option Three: His, Hers, and Ours

Option three is the ‘Goldilocks’ version, and it can go one of two ways: either you both have a ‘his, hers, and ours’ checking account, or you have a ‘his, hers, and ours’ savings account. You can have both a savings and a checking account too – lots of options with this!

A lot of people find the ‘his, hers, ours’ option the easiest, and it is helpful because both people can see exactly how much things cost every month.

His, Hers, and Ours - Option 3 to splitting the household bills | Journey to SavingWith the joint checking account option, you and your spouse/SO transfer in however much your bills are that month. If your electric bill that month was $200, you would transfer in $100 and so would your spouse/SO. You can base the amount you transfer in on a percentage of how much you make, too – like the ‘his and hers’ option. If you make less, you and your spouse/SO may agree that you take on one fewer bill, or pay less to the rent or mortgage payment.

Tip: In addition to being helpful because both people can see how much the bills are every month, if both of you hate paying bills, this option lets you take turns paying bills out of the joint checking.

A joint savings account can be helpful too, and you can set it up for a variety of things: if you’re engaged, the joint savings account can be your wedding fund, or if you’re already married (or engaged/dating), it can be your emergency fund/emergency household repairs fund/travel fund. I’d advise against your joint savings account being a retirement fund, though, simply because you’ll want a better return on your retirement funds than what a bank savings account can offer you.

Melissa blogs at Sunburnt Saver about personal finance, with an emphasis on saving, for young adults. With a background in finance and budget, Melissa is passionate about using her skills to help other young adults make smart money choices. Join Melissa on her journey to avoid debt (and sunburns) and navigate life after college! Read more at www.sunburntsaver.com.

Which option do you and your spouse/SO use? If you’re single, what have you used in the past or which option would you want to use in the future?

Erin M.

Erin is a personal finance writer and virtual assistant who loves talking about money and how to use it as a tool to get what you want out of life. When she's not obsessing over numbers or working (which is rare), she can be found messing around in Photoshop, laughing at her cat, watching YouTube videos, playing video games, chair dancing, or any random combination of the above.

48 thoughts on “How to Split Your Household Bills After Moving In Together

    1. Aw, that’s great Will! I do think it can be simpler that way, although I’ve learned that living with someone can be rather eye-opening (in good and bad ways, ha). You have it made with your current housing situation, though. I wouldn’t trade that in!

  1. Before I moved to NY to join my husband, we had completely separate expenses compounded by the fact we earned our income in different currencies. This year we combined our assets and income but our model is still slightly different. We have two joint chequing accounts and a savings account. DH’s income goes into one. My income goes into a formal business account which is not joint since I’m 100% self-employed. The other joint accounts is where we pay our expenses from and stash our cash. The key is to find a system that works and feels right for both partners!
    Kassandra @ More Than Just Money recently posted: A Ground Stop ReminderMy Profile

    1. Yes, it’s all about what works best for your situation! It’s good to remember that not everyone can have a cut and dry system in place, especially where self-employment is concerned. I need to open a separate business account!

    2. Wow, Kassandra, and I thought my situation was complicated! :) It sounds like you and your husband have things worked out that works for you, and thanks for your perspective. It’s all about getting the finances to work out – there are enough other things you have to keep track of, so why not make finances as streamlined as possible? :)
      Melissa @ Sunburnt Saver recently posted: 7 Steps for Surviving a Flood in Your House (Financially)My Profile

    1. It makes life a bit easier when everything is together. I wouldn’t want to go back to the days of splitting everything and keeping track of who owes who, but you’re right, not everyone feels the same!

  2. My hubby and I have always had a his/hers/ and ours approach to our finances, but I also think we could do ours without any issues. At the end of the day, it is just important that you are working together as a team financially and that each person feels as though they are contributing and it feels equitable. When these feelings stop, usually the fights start and that’s not good for anyone.
    Shannon @ Financially Blonde recently posted: Attention to Details Pays OffMy Profile

    1. That is SO true, Shannon. I do see your point – if one person is unhappy in the relationship, s/he could use finances as a weapon (either not paying the fair share, or not paying bills on time). Being on the same page (or maybe even getting things in writing, too) is the most important thing in a relationship – even before joining finances or moving in together.
      Melissa @ Sunburnt Saver recently posted: 7 Steps for Surviving a Flood in Your House (Financially)My Profile

    2. Exactly right, Shannon. There were times when my boyfriend felt like he was contributing more, so we kept adjusting and adapting. That’s partially why we just decided to combine everything – it made it easier than trying to keep track of who was paying for what (especially when it came to groceries).

  3. I kind of like option 3. If you both contribute the monthly estimates every month and maybe a bit more, then you pay all the bills out of the third account and money accrued above that can be used for home maintenance and repairs. If you never seem to accrue enough for maintenance / repairs then it’s time to adjust the monthly amounts because maybe the estimates were too low and actuals are coming in higher.

    The one thing I’m struggling with in the 2nd and 3rd models is what do you do if your incomes are not equal? Should you prorate the bills based on income?
    debs @ debt debs recently posted: Travel Cheap: Went to Paris, Skipped The LouvreMy Profile

    1. That’s an AWESOME idea, Debs! I never thought about adding more to that third account, but that definitely takes away the ‘oh no! The house is in shambles! Who is going to pay for X, Y, or Z?’ Having a ‘house’ account can handle those emergencies.

      It’s up to you if you want to contribute based on a percentage of your income, or split it down the middle. It may even depend on what other debt you have – in my case, my student loan debt brings my take home pay almost down to my significant other’s take home pay, so we nearly make the same amount, so we contribute equally.

      If someone in the relationship makes a -lot- more and has fewer expenses (or if his/her income is more stable than their partner’s), splitting it up based on income may work better for both people.
      Melissa @ Sunburnt Saver recently posted: 7 Steps for Surviving a Flood in Your House (Financially)My Profile

    2. By the time my boyfriend and I started living together, we were pretty much making about the same, except he was receiving monthly bonuses. So he agreed to pay a bit more where rent was concerned, and we tried to be fair about the groceries. It does get more complicated when you actually have a house and utilities to take care of!

  4. My wife and I got married 9 months after I graduated college and 4 months after she graduated, so we never lived together. At least that was a contributing reason. But I digress, we ended up combining our finances immediately after getting married and have been happy with this approach because we both are contributing to something that is “ours” regardless of how much we each make individually. If I was dating and not married I probably wouldn’t do this. I think the best way to split bills pre-marriage is by each contributing to a percentage of the bills equal to their relative percentage of income. That way no matter how much each person makes, you are contributing your “share” without the one who is making less become overburdened.
    DC @ Young Adult Money recently posted: How to Resist Spending TemptationMy Profile

    1. My boyfriend and I did this to some extent when we were splitting the bills. He made slightly more than me, so he agreed to cover $50 more for the rent. As long as the person contributing more is okay with that, it’s a fair system.

  5. I agree, DC! I think the percentage-based-on-income is the best way to split bills, but I’d add on expenses too. Like I mentioned to Debs, I make more than my SO, but when you factor in student debt repayment, we end up making about the same, so we split the bills equally.

    But if you don’t have any extraneous elephant hanging over your head, like student loan debt, you’re good to go and base it on income :)
    Melissa @ Sunburnt Saver recently posted: 7 Steps for Surviving a Flood in Your House (Financially)My Profile

  6. We have been living together for over a year and do the “His and Hers.” We don’t split every single bill down the middle, but instead have assigned bills and we each pay the rent every other month. Instead of writing a check for half the rent each month, we write a check for the full rent every other month. It seems to be working out that way. We might change it once we get married and have kids, but we’re going to stay this way for now.
    Aldo @ Million Dollar Ninja recently posted: The Surprise Cost of a Visit to the DoctorMy Profile

    1. It is important – and I can’t ever imagine being in a relationship for longer than a year without having discussed finances. I’m glad I learned that early on, but it saddens me to see some married couples who still aren’t on the same page.

  7. I suppose it largely depends on the sort of relationship you’re in and how much you trust each other. If you understand the value of money and have a desire to live frugally and aim for early retirement but your “other” (significant or otherwise) just wants to spend, spend, spend, then you’re unlikely to have a good experience with a joint bank account. However, insisting on paying bills separately doesn’t sound like you’re in a committed relationship – more like you’re room-mates sharing a house. I guess it’s important to find someone you’re compatible with before making the decision to move in together, then finances won’t be such an issue because you’ll both be on the same page.
    Myles Money recently posted: Credit VirginsMy Profile

    1. It does depend on a lot, and combining finances is a very personal decision that has been debated many times in the personal finance community. I’m of the belief that the people in that relationship know what is best for them, and they do what works for them…which doesn’t mean it’s going to work for everyone else. Personally, I wouldn’t date someone I wasn’t financially compatible with, especially after some past experiences.

    2. Oh, absolutely! You both have to be on the same page financially – I’ve seen a few friends spend a long time in relationships only to discover their SO wasn’t on the same page financially (lots of credit card debt, wanting a different lifestyle, etc.) I think it depends less on how you break out your finances (or not) and more on your end goal -together-. If you’re both committed to saving (or have a retirement goal, like retiring by 50), then it makes everything else fall in line easier.
      Melissa @ Sunburnt Saver recently posted: Scary Situations and Emergency SavingsMy Profile

    1. It was difficult for me at first as well, mostly because my bank account was much larger than my boyfriend’s. I decided to let it go, since he is working and making more than me right now, allowing me to take my time with freelancing. Thanks for stopping by!

  8. To be honest, we never really discussed finances until we decided to to buy a house. However, we were living on our own separately. Thankfully, he was somewhat frugal, so finances weren’t such a huge issue.

    I’m a believer of the option 3. A lot of people think once you get married and you move in together, everything needs to be combined. I believe the opposite. I work hard for my money, so I should be able to manage it however I want (investing, setting aside for a personal purchase, etc).
    Karen recently posted: Wasting Time by Waiting in LineMy Profile

    1. That makes sense – if you were living on your own and then decided to buy, you didn’t have much of a reason to talk about finances before that.

      I’m just a believer of doing what works for you! My boyfriend and I rarely ever make purchases outside of our budget for ourselves, so I don’t really feel the need to keep things separate. In any case, I mention things to him (like my FinCon ticket), and he’s supportive; when he needs running shoes, that’s perfectly fine!

    2. That’s true, too, Karen! I’ve heard a lot of people have a ‘fun money’ section in their combined budget, where a certain about (say, $250) per person is ‘fun money’ and can’t be questioned by the other partner. That’s one way to combine your money but also retain some autonomy. Although, obviously, I follow Option 3, so I don’t combine either. I’m a bit like you! :)
      Melissa @ Sunburnt Saver recently posted: September Recap & October GoalsMy Profile

  9. I’m not a fan of combining finances without legal documentation. Not because it is somehow “less committed” but due to outside issues that can occur. Tax auditing, financial aid, disability benefits, accident settlements… They all get more complicated when you have your money mixed. And if your partner dies after a lifetime together, a vindictive family can come and dispute everything. :( All on top of the worries about if the relationship ends.
    Ms. LoL recently posted: Frugal Friday Favorites #9My Profile

    1. I don’t think anyone likes to think about what can happen, but it is definitely important to consider. I’ve seen some family members do a complete 180 and get very nasty after a divorce. It’s sad that relationships can be reduced to battles over money, but I’m sure it happens more often than not. I’ve heard horrible stories about family members taking money after spouses pass away, too. It’s a shame.

    2. Yeah, that’s a pretty intense thing to discuss with your partner, but if you can’t have serious discussions with them (after a reasonable amount of time, of course – maybe not the 1st date), then you probably aren’t mature enough to combine finances.

      It’s a good point to get a few things documented, such as combined finances, a living will, etc. You really do never know what can happen, and if something happens to you, your family might have a completely different opinion of what should happen than your partner. Thanks for this reminder!
      Melissa @ Sunburnt Saver recently posted: September Recap & October GoalsMy Profile

  10. My fiance, R and I are currently using Option 2, but are exploring Option 3.
    We moved in together in February, and for the first two months, navigating the finances was very tricky and very stressful – I had never lived with anyone before and have always been “protective” of my money.
    His fiances have been very simple – he has no debt, and the only monthly payments he has are our shared bills. Mine is much more complicated, with a car loan + insurance, student loan, and no job security at the moment. But, he recently started a new job that comes with a pension and benefits, etc. so we need to reassess things.
    I’m not going to lie though, I like being in control of our finances and therefore a joint account does scare me :)
    Amanda @ My Life, I Guess recently posted: So, How Did Your Job Interview Go?My Profile

    1. I like being in control of my finances as well, which is why I still mostly monitor everything, and I work up our budget. With you having the car loan and student loan, I think option 3 would work out pretty well. You get to retain control over your half, and all the household bills can come out of the joint account.

    2. I like being in control of my finances, too! It seems like we all have that in common… hmm.. maybe that’s why we like to blog about personal finance? ;) Amanda, I totally get you about the debt thing – that’s a little bit why B and I do Option 3 – I don’t want to burden him with the debt I have! In terms of seeing it, haha, not paying it :)
      Melissa @ Sunburnt Saver recently posted: September Recap & October GoalsMy Profile

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