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A Redditor recently asked about a common financial challenge: How should a couple handle shared expenses when one person vastly outearns the other?
Many commenters suggested the higher earner should cover most expenses, since they can more easily handle them. But what about nuances? What if the higher earner wants to take a trip the lower earner can’t afford on their own?
The poster was concerned about appearing to mooch off of the higher earner’s income, and indicated the situation was causing strain in the relationship.
Commenters urged the Redditor to have an open and honest conversation about money with their partner. They said it was time to spell out how expenses would be shared in the future, especially if their finances became more intertwined.
“It’s an uncomfortable discussion, but it should be easy if you have the same goals,” says Kenneth Thomas, a financial advisor at Southern Capital Solutions in Goodlettsville, Tennessee.
He suggests starting with an open-ended question, such as, “If we’re going to build a life together, how do you feel about how we split bills?” There are ways to create a feeling of fairness even if you’re not splitting expenses fifty-fifty, Thomas adds.
In fact, a recent NerdWallet study found that only 5% of Americans considered “earning more money than me” to be a red flag. At the same time, the study found that 38% of Americans considered it a dating dealbreaker if their date “typically expects me to pay for dates.”
Here are some guidelines to keep in mind when it comes to splitting costs.
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Embrace money conversations
Couples often run into trouble when one person’s income changes dramatically and they don’t talk about it or adjust their financial habits accordingly, says Jesica Ray, a certified financial planner and senior lead advisor at the financial firm Brighton Jones in the Washington, D.C., area.
“When someone starts earning more than the other, the other person can sometimes not feel very good,” she says, because they aren’t contributing as much as their partner. That’s when it’s a good time to talk about money values and how contributions may need to shift.
Regularly revisiting how you share expenses is a good idea, says Miklos Ringbauer, a certified public accountant and founder of MiklosCPA, an accounting and tax strategy firm in Southern California. One person might start out covering the mortgage while the other handles food, travel and utilities. Over time, you may find those latter categories have ballooned in cost with inflation, for example.
“All expenses should be evaluated and updated at least once a year to make sure both parties feel they are properly contributing,” he says.
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Try a percentage-based approach
“What works from a long-term stability standpoint is using a percentage-based approach,” Ray suggests, where each person is contributing the percentage they earn of household income into a joint bank account.
This method is easy to adapt over time because if one person starts earning more, they can increase the percentage they put in. Likewise, if one spouse works less to take on more child care, then their contributions go down.
This kind of fairness-based approach can be good for the relationship.
“We see less resentment. There’s a formula, and it creates a level of structure,” Ray adds.
Find a custom solution that works for you
Ultimately, there’s not one “right” way to split expenses. Your choice might look completely different from your neighbor’s choice, and that’s OK, Ringbauer says.
“It’s truly a personal preference,” he says. “You will never make the exact amount of money as your other half, but having that discussion and understanding is the key.”
What matters most, Ray says, is that both members of the couple feel good about the method. “You two need to be in full alignment.”
Sometimes, one person contributes more income, but the other person contributes more in other ways. That could include making dinner, providing child care and cleaning, Thomas says. Those contributions should be valued, even if they don’t come with a price tag attached.
“If I’m making more money than my wife, I don’t want her to feel bad,” Thomas says. “You can’t put a price on her household contributions: nurturing, love, dedication, acts of kindness. That’s contributing.”
Also priceless? He’s currently approaching his 13-year wedding anniversary.
Reddit is an online forum where users share their thoughts in “threads” on various topics. The popular site includes plenty of discussion on financial subjects like relationships and money, so we sifted through Reddit forums to get a pulse check. People post anonymously, so we cannot confirm their individual experiences or circumstances.
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