How to Divide Household Expenses with Your Spouse

October 16, 2020 | Finacing

The first thing many couples do once they’re fully committed to each other is buy a house together. For many, this comes after marriage, but some people start the process of researching Windsor real estate and shopping for houses for sale earlier than that.

There’s no right answer when it comes to determining the right time to buy a house as a couple. It’s a deeply personal question that only you and your partner can answer. However, one universally accepted fact is that couples who don’t get on the same page with their finances will struggle.

In a recent survey done by the Ramsey Solutions financial education company, the majority of the 1,000 Americans surveyed said that their biggest fights with their spouse were about money. Meanwhile, the same survey found that 94% of people in successful marriages regularly discussed their money dreams and anxieties with their spouse.

The topic of money might seem weighted and complex, but that’s no reason to avoid the conversation. Today, we’ll talk about different ways that couples can approach the division of finances, and how to start the conversation so it’s as honest and stress-free as possible.


3 Money Approaches That Work

There are many different ways for couples to split their finances once they’re in a committed relationship. These are the three most popular, but you should feel free to adjust and adapt them to suit the needs of your family.


1. Everything Shared

One traditional approach to handling money as a couple is to keep everything together. Neither person in the relationship has their own accounts, and instead all of their money is pooled into joint savings accounts, checking accounts, and other long-term accounts like TFSAs.

The benefit of this approach is that each person has a clear picture of what’s happening with their shared money at all times. It keeps everything 100% transparent and makes the process of paying household bills much easier. However, it can be frustrating if you have a different view of money from your spouse, and can increase financial conflicts if you aren’t 100% in agreement on how you’ll spend your money.


2. Fully Separate

Other couples choose to skip over these nitty-gritty financial details, and instead keep their finances largely or entirely separate. In these situations, couples will typically divide the monthly bills. For example, if one pays for the car and mortgage, the other will pay for childcare and groceries. Each person takes care of their portion of the monthly expenses, or one person can do all the bills then request a check or e-transfer from their partner for a set percentage of the monthly total.

Keeping your finances separate can help both partners retain a sense of independence, and may cut down on petty financial squabbles since all savings and ‘fun money’ remain totally within each individual’s control.

However, if you have any joint goals at all, it will require a lot more proactive communication. You’ll also need to trust that the other person is following through with the financial goals you made together.


3. Yours, Mine, and Ours

Many couples find a happy middle ground between the two approaches we mentioned above. This involves using at least one joint account to pay household bills and save for the future, while retaining some separate accounts that remain completely within each individual’s control.

This is a great way to combine your spending and saving power on key household expenses while maintaining a bit of independence, so you can treat yourself to meals out, hobby items, or luxuries without feeling like you need to check in with your spouse.


How to Start the Conversation

Most of us, regardless of our background, feel uncomfortable talking about money with a partner or spouse. To have a successful conversation about money, use these tips to keep things positive and focused on a mutually beneficial solution.


1. Take Stock

Before you start the conversation, it’s important to have a good understanding of your own finances. Create a list of your assets and liabilities, as well as all currently active accounts that you own. List all of your credit cards, along with their balances if you’re carrying any consumer debt.

It’s easier to have a conversation about managing money when you can show your partner a clear picture of your financial situation. If you’re unable to give them an accurate look at your finances, it could jeopardize the plans you make together.


2. Be Honest About Your Needs

To determine a mutually beneficial plan, you need to be honest about your needs. Communicate honestly with your partner about your financial habits, as well as your insecurities. For example, if you know that you value financial independence, you probably won’t be happy with a plan that ends with you and your partner sharing 100% of your finances.


3. Be Equitable, Not Equal

As much as it might be nice to split expenses 50/50 with your partner, this might not be realistic if you make different amounts or have unique needs and priorities. Your financial situation can still be fair and equitable even if you aren’t splitting everything 50/50.

Instead, you could choose a split based on income. For example, if Partner A makes $65,000 per year while Partner B makes $35,000, it would be more equitable to split your household expenses 65/35. This ensures that both partners are contributing to household expenses while retaining enough personal money to have financial flexibility.


4. Divide Responsibilities Along with Expenses

Don’t discount the emotional labour that goes along with managing your money on a regular basis. In order to share this load equally, spend time during your conversation determining who will be responsible for ongoing tasks like paying bills, tracking spending, or logging transactions into your monthly budget.


5. Set a Date for Your Next Check-In

The last thing you should do during your first money conversation is set a date for the next time you’ll check in with each other, to make sure everything is on track. Setting a regular check-in – whether it’s weekly, monthly, or quarterly – is a great way to make these conversations less intimidating.

Meeting for regular check-ins is a fantastic opportunity to see whether the system you came up with is still working the way you intended. If it’s not, making a few quick tweaks based on experience and feedback from your partner is easy.


Find More Resources on Homeownership on the Dan Gemus Real Estate Team Website

As some of the top real estate agents in Windsor, we know from experience that the more you’re able to communicate with your partner, the easier the home buying experience will be. To discover more about what we’ve learned in our years in the real estate market, come visit us on our website, or find more in-depth resources on our blog.

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