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Asked on Reddit: My Partner Makes More Than Me. How Should We Split Expenses?
Asked on Reddit: My Partner Makes More Than Me. How Should We Split Expenses?
The best way to deal with a big salary discrepancy in a relationship is to talk about it.
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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.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.Meet MoneyNerd, your weekly news decoder
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