To split or not to split?

The big question here is, should a couple split its household expenses? In this day and age, where two-income households are more the norm than not, perhaps it is more pertinent to ask “how should a couple split its household expenses?”

Getting married is the decision by two persons to share their lives together. Inevitably this means everything will be shared – their space, joys, successes, hopes and dreams as well as their daily chores, problems, worries… plus the cost of maintaining this shared life. Since it is two persons sharing one life, we can safely assume that each person bears half the household expenses. Or can we?

As easy as the math is, this sharing of expenses is not that clear cut in real life. Many factors are involved. If you are married, you would already have a system in place in dealing with this all-important aspect of marriage. But if you are not, this article will help you see the need to tackle this contentious issue even before you tie the knot. Due to personal preference, religious principles, cultural norms, and social and financial standing of each spouse, the scenario differs from one couple to the next.  

Decide what to share
First up, you need to define what are shared expenses. What immediately comes to mind will be the home and car loans, household expenses including utility bills, food, children’s education and family holidays. What about leisure pursuits for him and her which are not enjoyed together? What about personal shopping? Both of you will also need to agree if you will share the liability for assets and debts held in each person’s name such as education loan, property financing and business loans. When it comes to money, a clear line has to be drawn to avoid future misunderstanding, resentment and, God forbid, domestic fights.

Decide how to share

Here comes the interesting part. Do you split your expenses down the middle? Or should the man pay more? Or maybe he should pay for everything as a woman shouldn’t pay at all, right? Well, let’s looks at some common expense-sharing practices.

1)    No sharing
This is prevalent in patriarchal families where the husband brings home the bacon and the stay-at-home wife takes care of the household. Interestingly, it also happens in two-income couples where the wife’s motto is “what’s yours is ours but what’s mine is mine”. In these cases, the man usually earns a significantly larger income so he can afford to foot the entire household bill. As long as both are happy, why not?

2)    Free-for-all

As the term suggests, a free-for-all situation is one with no fixed ‘rules’ as to who pays what and how much. The man is usually the one who pays for the big ticket items and monthly fixed costs while the wife chips in for groceries or smaller ad-hoc purchases for the family.

3)    Selective sharing

Perhaps a better control exists in this system which allows each to select what he or she is responsible to pay for, every month. For e.g., the husband pays for the home and car loans, while the wife pays for groceries, utilities and the children’s expenses. No need for argument when something is not paid because clearly someone is responsible.    

4)    Half-half

One can say this is the fairest system in the house. When both are equally capable of earning their keep, splitting down the middle seems ideal. Splitting everything equally may suggest you are equal to your partner is this relationship. In reality though, it is unlikely both of you earn the exact same amount of money. So is being equal fair?  

5)    Pro-rata

Then there is the pro-rata way where expenses are shared based on income. If one spouse earns more, he or she pays proportionately more. They could do this by settling their share accordingly at month’s end. Or they could pool their pro-rated contribution into an account and pay all expenses from there, topping up as and when needed.

Decide for the future

Whichever system you choose, you need to have a back-up for unforeseen circumstances. Keeping an emergency fund is not only smart but will come in handy when one party can’t fulfil his or her obligation for a prolonged period of time. Like when one loses his job. Or when there is an unexpected hospital bill. During that time, one partner may not be able to fork out twice his usual commitment. The emergency fund will come to the rescue.  

Decide together

At the end of the day, it is all about what makes both of you happy. Talk with each other to work out a system both are comfortable with. Decide what is fair to each of you and commit to it. The trick is to learn early on, how to talk about money with each other. Be direct, be honest and be constructive as it is not always easy to talk about money. Talking openly now about your finances and shared responsibilities will save you a lot of headaches down the road.

Money is often cited as the top reason couples split up. This is understandable as money is power and control so the way you share your household responsibilities reflects the power dynamics in your relationship. Splitting household expenses wisely then may be the way to prevent any marriage from splitting up.