Splitting Bills When You and Your S.O. Have Different Salaries
Paying bills is one of the most confusing, irritating and rewarding coming-of-age duties for the 20-something. Now, multiply that by two.
My boyfriend Isaac and I have been together since we were 17 — We're both 23 now, so that makes six years so far. Being high school sweethearts sort of makes us an anomaly, and it's often something people "ooh" and "aww" at when our relationship comes up in conversation.
And though I take pride in the fact that we've grown together instead of apart, I'm even more proud of what that togetherness has enabled us to do. It's something we reflect on often — usually in between kitty feedings and rants about our long days.
We have good jobs, good families, a good apartment. We live in a great city, and we enjoy many little luxuries that we know not everyone else in the world can enjoy. We've been able to afford everything we need and much of what we want — without too much bickering along the way. And I think that's pretty impressive.
By no means are either of us experts when it comes to budgeting or finance. And having two different salaries doesn't make it much easier. But we've learned a lot about solving money dilemmas the "adult way," with practicality and fairness being our guiding lights. So I'm sharing what's worked for us, in hopes that it will help you and your S.O., too.
Prioritize your spending
First things first: Bills. You'll always have certain set bills you have to pay, though they may differ depending on where you live, whether you rent or own, etc. We live in an apartment complex, so rent — and all the little fees it comes with — are a mandatory monthly payment. Same goes for renter's insurance, which our complex requires us to have, and utilities.
You and your S.O. should set explicit rules about which bills take priority. Write them down. Number them. This will help you organize your joint and disposable incomes — that is, "the amount of net income a household or individual has available to invest, save, or spend after income taxes."
After those are accounted for, you can start prioritizing things to be paid for with your discretionary income — "the amount of income that a household or individual has to invest, save or spend after taxes and necessities are paid." These are those "little luxuries" I mentioned earlier.
Things start to get sticky here, though, if you and your S.O. disagree on what exactly your "necessities" and "luxuries" are. What's more, recurring bills that vary in cost — such as water, gas and electricity — can also be up for debate based on you and your S.O.'s living preferences.
Be willing to compromise
Much of of couples' budgeting depends on what you value, which is why money is such a common catalyst for arguments, tension and even divorce. What I've learned is that the keys to budgeting fairly are respect and compromise.
For example, I like having cable TV – I'm probably one of very few millennials who do. I like watching my local news in the morning to check the weather and traffic for my commute. I also looove having a DVR. I know I can probably get the exact same shows on Hulu, Netflix or Amazon Prime a few days later. But what can I say? I'm impatient.
My boyfriend couldn't care less about cable, but he fronts the bill for it because (1) he knows it's something I value and (2) he's the tech wizard of the household. With the cable comes our internet (s/o Google Fiber), so he's happy to cover the total if it means he can tinker and geek out over upload speeds.
On the flip side, I respect the fact that he likes our apartment to feel like the waters of the Arctic. I naturally run cold while he runs warm, and we've always debated who has jurisdiction over the thermostat. But we've come to the agreement that it makes more sense to run the AC so he's not uncomfortably hot — meanwhile I can snuggle up with extra blankets and pillows — to which I happily oblige.
Divide and conquer
When you and your S.O. make different amounts of money, the definition of "fair" budgeting becomes more abstract. Is it still fair to split the bills 50/50? And if not, how do you decide who pays for what?
There isn't a definitive answer to these questions, since every couple will do it differently. The best advice I can give you is to have a conversation about as soon as possible once it becomes relevant — i.e. as soon as you start sharing responsibility for bills.
I can also tell you it's rarely going to be a perfect system. Even if you manage to split all your recurring bills right down the middle, there's no guarantee one month's bills will be the same as the next. Why? Because life happens, in good and bad ways. There are a million and one things that could throw a wrench in your otherwise "perfect" bill-splitting plan — vet bills, car maintenance or any other pricey unforeseen event.
You'll most likely handle each on a case-by-case basis. That said, it's important to figure these things into the conversation when you first start talking about budgeting and bills. If you fail to plan, then you can plan to fail, as they say.
Think five years ahead
Once you and your S.O. have a solid financial foundation in place, you can start to plan for what's ahead. Maybe you want to take a cross-country road trip, get hitched or buy your first house.
If you've reached the point in your relationship where you see these events on the horizon, firstly, congrats. But don't let the excitement cost you.
Be sure to have an open conversation with your S.O. regarding the what, when, where and, of course, how much. Consider starting a joint savings account or collecting spare change. You may even agree you want to cut out spending on other things to reserve more money for your upcoming event.
No matter what your salary, don't be discouraged from thinking big and dreaming of lavish opportunities. As long as you take care of the critical stuff — i.e. bills — first, there's no shame in celebrating your relationship and all the adventures it's made possible.