Jul 11, 2024

Financial planning, Relationships

How to Share Expenses as a Couple

Emily Luk

CPA, CFA - CEO and Cofounder of Plenty

In 2013, Facebook once announced a 60% accuracy rate in predicting new relationships based on friending and like activity. Today, Venmo might be the best predictor of relationship beginnings, as couples often start by splitting expenses for things like movie tickets or larger purchases.

With more couples maintaining independent bank accounts and credit cards, managing shared versus individual expenses can be tricky. Here’s a guide to help navigate this aspect of your relationship.



Ways Couples Split Expenses


1. By Income

  • How it Works: If one partner earns more, they pay a higher portion of the expense. For example, if Jake earns 30% of the couple's combined income and Riley earns 70%, Jake could pay 30% of their rent while Riley pays 70%.



2. 50/50 Split

  • How it Works: Couples split the expense evenly, keeping it simple. For instance, Dakota and Alex share a joint credit card and each contributes 50% of the bill each month.



3. Hybrids

  • How it Works: Some expenses are split equally, while others are not. For example, if Jordan and Dylan bought a car together that Dylan uses for work, Dylan might pay 75% of the car payment while they split the rent 50/50.


Couples often also take turns paying for subscriptions or alternate payments for shared expenses. This approach might not be precisely 50/50 but can be close enough for both partners.



Deciding What’s Fair


"Fairness" in splitting expenses is subjective and varies from couple to couple. Here are some questions to guide your conversation:

  • How much do we each earn?

  • How much do we each have to contribute after big expenses (e.g., student loans)?

  • Is one partner contributing something with significant financial value?

  • What are our respective financial positions, such as savings and career stages?


When there’s more than a 25% difference in income or ability to contribute, couples often move away from the 50/50 approach to more customized methods.



How Do Married Couples Split Expenses?


For most couples, splitting expenses starts with tools like Splitwise and Venmo. As relationships become more serious, these methods may evolve. 



Common Changes After Marriage:

  • Joint Bank Accounts: Used for large shared expenses.

  • Credit Cards: Adding a partner to an existing card for shared expenses.

  • Hybrids: Some couples use both joint accounts and cards for shared expenses while maintaining personal accounts for individual expenses.

  • No Change: Many couples continue their pre-marriage expense-splitting methods.



Do Married Couples Need Joint Bank Accounts?


In the past, joint bank accounts were almost as significant as marriage itself, often due to single-income households. Today, while many couples still open joint accounts around marriage, how they use these accounts has changed. Tech tools make tracking expenses easier, and both partners often work, reducing the necessity of joint accounts.


Over time, married couples may increasingly use joint accounts, especially after buying a house or having children. However, most couples maintain personal accounts or cards to balance building together and financial independence.



Do Joint Credit Cards Make It Easier?


Joint credit cards can simplify expense splitting if you share many expenses. Benefits include:

  • Less Work: No need to manually track and split each transaction.

  • Shared Benefits: Enjoy rewards like lounge access and hotel upgrades.

  • Earn More Points: Pooling expenses can help earn points faster for things like travel.



In Conclusion:


The key to managing shared expenses is to find what works best for your relationship. Fairness is a feeling and may require some uncomfortable conversations, but it will get easier over time.

AUTHOR

Emily Luk

CPA, CFA - CEO and Cofounder of Plenty

Emily is the ceo and cofounder of Plenty. Started by a husband and wife team, Plenty is a wealth platform built for modern couples to invest and plan towards their future, together. Previously, she was VP of Strategy and Operations at Even (acquired by Walmart/One) and a founding team member of Stripe's Growth and Finance & Strategy teams. She began her career as a VC, and was one of the youngest nationally to complete her CPA, CA and CFA designations.

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