How Do we Divide Up Monthly Expenses?

We planned an awesome wedding, went on an extravagant honeymoon and just signed the lease on our first how do we divide up who pays the rent?

It’s a common question I get from newly engaged and married couples: How do we divide up the monthly bills?

What makes this question more difficult for newlyweds is that in 99% of the cases income levels will be different (at least slightly).

I have heard suggestions ranging from dividing up the expenses on a pro-rata basis meaning that if she make 80% of the income then she should pay 80% of the bills all the way to dividing up each bill and assign them to a specific person.

I think both of these are bad ideas and here is why.

When you get married you are saying to the other person that everything I have is yours and in turn your spouse is saying that everything they have is yours. To hold a part of it back is to say I give you almost everything...if you have hesitations giving everything then maybe you are not ready ready to get married.

That being said here are a few practical ideas for planning how to pay the monthly bills after tying the knot:

  • Start with a monthly cash flow sheet: A monthly cash flow sheet (or budget) will show you a list of your income and your monthly expenses. This is the starting off point in understanding how much you jointly bring in and how much you need to cover monthly from a bills perspective. I encourage you to think of it as 1 income coming in even if it has two sources. It's now YOUR income. The bills will now be paid with YOUR income.
  • Create a joint bank account: When looking at your separate income as YOUR income and the bills as being paid from YOUR income, it just make sense to have one bank account that your paychecks go into and out of which you pay the bills. That’s not to say that you might not need each a separate bank account in addition to this one to help you manage your day to day spending (coffee, work lunch, etc) but the bulk of the bills should be paid from a joint account.  
  • Review It Monthly: Its a good idea to set aside some time each month to check on your progress. Does your monthly cash flow look like what you planned it to be? Do you need to make any adjustments. The key to managing the monthly bills as a couple is to have clear communication.