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If you’re in a committed relationship, one of the biggest decisions you make is whether to combine finances or keep them separate. It’s almost as big as deciding whether or not to dress up as a theme for Halloween or have completely different costumes. What happens when your girlfriend wants to dress up as Khaleesi and Jon Snow, but you just want to be the creature from Predator?

This calls for a discussion, just like the very important discussion you need to have about your finances.

» Learn more: Term Life Insurance for Couples

If you’re living together, you’re both affecting the bills. In these cases, the majority of couples both contribute towards paying the bills as well.

There are three common ways that couples deal with finances:

  1. Split bills evenly down the middle.
  2. Split bills proportionate to amount earned.
  3. Create joint account and pay bills from combined finances.

Let’s talk about each method and discuss the pros and cons.

Couples’ Finances: Splitting expenses down the middle.

With this method, the bills are calculated each month and you split the costs right down the middle.

Rent = $1500
Electricity = $80
Gas = $50
Water/Sewer = $10
Internet = $70
Netflix = $10
Total monthly bills = $1720

In this example, each person contributes $860 and any income left over goes into their separate bank accounts.

Pro = If you go this route, on paper, it’s fairer. No matter what you earn or how much water you use in the shower, you and your partner are 50/50.

Con = If one of you makes substantially more money than the other, how do you maintain similar lifestyles? If one of you is living paycheck to paycheck to keep up with the expenses, what do date nights look like?

If you and your partner decide on this method, it’s wise to agree on a plan ahead of time if one of you were to get a raise or lose your job.

Being in a relationship is a partnership.

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Couples’ Finances: Splitting expenses proportionate to amount earned.

With this method, each person contributes a percentage based on how much they earn.

Rent = $1500
Electricity = $80
Gas = $50
Water/Sewer = $10
Internet = $70
Netflix = $10
Total monthly bills = $1720

Jack makes $4200 each month and Sally makes $3000 each month. Jack makes up 58% of their combined household income while Sally makes up the other 42%. So, using this method, Jack would pay for 58% of the total expenses (approximately $998) and Sally would pay 42% (approximately $722). Any leftover income goes into separate bank accounts.

Pro = If you go this route, it’s easier to maintain common lifestyles. One person isn’t struggling to keep up with paying the bills.

Con = The person making more money could begin to feel punished for earning more. The person making less money could start to feel guilty.

Couples’ Finances: Opening a joint account and paying expenses from combined funds.

With this method, you and your partner completely combine finances. Your paychecks go into a joint account and you pay bills from this joint account. Any leftover income remains in the joint account.

Pro = It’s easier to keep track of finances with this method. You can easily review the account to see who is spending what, how much, and where. You’re a combined force and you may feel more united as a couple.

Con = If one of you is a saver and the other is a spender, this method may become volatile.

By no means are these three methods the only options couples have, they’re just the most common. Not every couple has the same situation or lifestyle. Maybe one of you pays the rent and the other covers all the utilities. Maybe you live in an apartment where one of you is the building manager so rent is covered—does the other partner cover the rest of the bills then?

Being in a relationship is a partnership. No matter which method you choose, know that you both should have a say and it’s OK to need to change things up.

Year after year, the subject of money is consistently the number one argument between couples. Make a plan and set ground rules early on so it does not become an issue.

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About the writer

Headshot of Natasha Cornelius, a life insurance writer, for Quotacy, Inc.

Natasha Cornelius

Writer, Editor, and Co-host of Quotacy's Q&A Fridays

Natasha is the content manager and editor for Quotacy. She has been in the life insurance industry since 2010 and has been making life insurance easier to understand with her writing since 2014. When not at work, she's probably studying and working toward her Chartered Life Underwriter (CLU) designation while throwing a tennis ball for her pitbull mix, Emmett, or curled up on her couch watching Netflix. If it’s football season, the Packers game will be on. Connect with her on LinkedIn.

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