How to share expenses as a couple?

Most couples with an income disparity split costs roughly based on salaries or share expenses. The idea is that you are a couple and not two individuals.

I think there is no “right” or “wrong” answer to this question, but different things will work for different couples depending on their situation. You need to come to an agreement with your partner that you both feel comfortable with, and it doesn’t lead to one of you resenting the other. That’s what it comes down to.

But some considerations to keep in mind might be:

The basic stuff

How long have you been together? Do you view this as a long-term, forever relationship, or do you think you might break up in a year or two?

How much you stake or pool really depends on whether you see this working in the long term.

Nobody has a crystal ball, of course.

But it’s a decision that really shouldn’t be rushed.

Go slowly enough to make sure both people are comfortable with each step. If you rush too much, you may regret it if things fall apart.

But if you truly consider yourselves life partners, regardless of your marital status, consider joining your finances.

Think about it: would you really want to live very different lifestyles as a couple? When you retire, do you anticipate that one of you will have an easy life while the other will struggle? Of course to note. So, at some point, you will end up moving from a “mine and yours” consideration to “ours.”

Income disparity for couples

If it’s a couple making the same money, then 50/50 might seem fair.

But if a person makes a lot more money, then the discussion begins.

Personally, I think the benefit of a percentage split is that it allows both people to maximize their lifestyle at any time, without unduly burdening the low-income person. But that’s not the only option.

Some couples live on one salary and put the rest in the bank.

Some couples pool everything together and pay for everything from one common pool. Others will adjust the percentage of their contribution based on who picks up the slack through other means. For example, the person with the highest income will contribute more to expenses.

But low-income earners who have more free time could do more household chores.

It’s up to you to find a system that works and adjust it as you progress through life.

When in your life did you meet your partner?

For couples who met young and started together, they may feel like they both entered a relationship with very little and “built” their lives together.

In many cases, one partner made sacrifices to allow the other to advance, such as staying home with young children while the other advanced their career, or working more so the other could return to school.

These joint decisions usually create a feeling that what the couple owns in terms of money or property belongs to them both, because they built it together.

On the other hand, couples who meet a little later, once their careers and finances are more established, might have a different perspective and be more inclined to keep things separate.

If one partner enters the relationship with a significant amount saved, and the other has nothing and also has not been involved in one way or another in the success of the first.

It’s understandable that the first partner might feel uncomfortable shelling out more than half of what they have.

Legal tips for couples

If you are not married, then the laws of which money Who owns it will vary depending on how long you have lived together and, to some extent, the province in which you reside.

For example, in Quebec, common law union does not exist for the purposes of sharing property.

So, even in the case of unmarried couples who have lived together for decades, the principle “what’s mine is mine” and “what’s yours is yours” remains the case.

However, this may be different in other provinces.

Are children involved?

This changes the equation A LOT.

If you have children together and/or one or both of you have children from previous relationships, then you need to determine what is fair here.

For couples who pay child support or maintain joint or full custody of children from a previous relationship, how comfortable are you with your partner sending some of “your” money to their children or exes?

Likewise, if you have expenses for children you have together, they should probably be covered by both of you.

For couples who meet later in life, perhaps once their children are grown, there is also the notion of inheritance to consider.

What happens when Mom dies and Dad meets someone new and suddenly the estate belongs to her and her children, instead of his children?

Especially when dealing with significant assets, this is a discussion that should involve an attorney.

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Maintain financial autonomy

I cannot stress this enough: whatever method couples choose, even married couples, they should each keep accounts and credits in their own name which are not joint. Always.

Let’s say you get divorced later in life.

There are women (and some men, but mostly women) across Canada who cannot get credit because they have no credit history since everything was in their husband’s name for the duration of their marriage.

No one wants to believe they’re going to have that mid-life crisis and leave you for a younger model, but honey, it happens all the time. Maintain your own credit history.

Additionally, what happens if one partner dies? Joint assets and accounts are often frozen for a period of time after the death of one partner or spouse.

If you don’t have an account in your name only, you may have difficulty paying the bills until the estate is settled.

And, more pragmatically, two adults shouldn’t have to monitor each other for every small purchase.

Obviously this will vary depending on your budget.

But if you trust each other, you should each have some financial independence and the ability to spend without getting your partner’s permission.

Even if it’s just so you can give your partner a birthday present without them knowing.

The practical aspects of being a couple

Personally, I recommend keeping three types of accounts: yours, mine, and ours.

Some couples deposit all their income into their personal account, then transfer a pre-agreed amount of money each month to a joint account used to pay household bills and expenses.

They keep and manage everything else separately, including expenses, bills and long-term savings.

Alternatively, if you are ready to further merge your finances, you can reverse this: deposit all income and gains into the joint account. Pay most expenses and bills as well as your long-term savings from there, but transfer a preset “allowance” to each partner’s account each month so they can spend it however they want.

Conclusion

Do you plan to spend the rest of your life with her?

Let’s look at it like this, assuming your split is 50/50. You will have excess money, while she will spend all her money on basic expenses.

Especially as we get older and more and more expenses are shared (house, children, etc.). Either you will be able to lead a completely different lifestyle from that of your partner. (you drive a Lexus, she drives a broken down Beater) or you can save for retirement and she won’t, or a combination of both.

Then when you get to retirement, she’s poor, she has no income except from the government and you have plenty of money for retirement. So what happens then? She eats cat food and you have lobster? You go on vacation, she stays at home.

IMO, when it comes to long-term relationships with income disparity, you’ll either split expenses based on income or live a life marred by inequality in your own home. I just don’t see how this can work.

Now if one person makes $100,000 and the other makes $200,000 you can of course split 50/50 and it won’t have the same problems, this only applies assuming one person has a lower salary.

Please let me know your thoughts and comments below.