Finances play an important role in any relationship. As a household, you will determine how much money you spend on normal expenses (like groceries) to bigger purchases such as a new home or vacation. Discussing finances with your partner before cohabitation or marriage is one of the most important things you can do, so that both of you will feel comfortable with the agreement of how household and larger expenses will be managed. While this may sound simple enough, this conversation may not always be the easiest to have. But with approximately 44% of all marriages ending in divorce due to financial incompatibility (I’m not sure how much of this is driven by the most recent recession), it’s clear this is a conversation worth having.
But what exactly is the best way to approach your financial situation as a couple? The arguments typically begin because one person in the relationship earns more money than the other. Should the one who earns more money be responsible for more of the household expenses? That depends on who you ask. More traditional relationship and marital advisors suggest both individuals in the relationship pay an equal amount for all shared expenses. That way, no one can feel as though they can’t have a say in important financial decisions.
However, a lot of people view the 50/50 rule as an unfair arrangement, especially if there is one person in the relationship that earns less than their partner. That leads to the next question…what is fair? After talking to different people (friends, family, and strangers) about what they felt was fair, the two most popular percentage splits I heard the most are 65/35 and 55/45. When I asked how they came to that conclusion, the usual response was “…because it’s not fair for me to pay the same amount if [he/she] makes more”. This makes me think a lot of the reasons for changing the traditional 50/50 financial responsibilities are about as unequal as the responses I’ve received.
This also made me wonder…is there any where in the world you can pay a percentage of expenses because you make less? This does not include any government assistance programs which most working families don’t qualify for despite a legitimate need. For example, can you make a decent household income and call the electric company and ask they only charge you a percentage of the bill because of your salary? The answer is no. In most cases, they will only work to reduce your bill if you meet strict criteria. Can you go to the grocery store and pay a percentage of your bill because you make less the person in front or behind you? The answer is definitely no.
So, keep all that in mind when having that difficult conversation with your significant other because that may be the difference between a long lasting relationship or a one-way ticket to Splitsville.
What do you think is fair? Should the higher income earner pay more?
Image: Tetra Images