Sharing expenses is no cakewalk, whether you’re sharing expenses with your roommates, your boyfriend or your parents (hey, some people live at home, it happens). Luckily, there’s a way to do it without losing your mind or engaging in monthly “You spent WHAT AT COSTCO?!” fights when you’re expected to cover half of the balance.
It all starts with the Money Talk.
Before we moved in together, my boyfriend and I had the money talk – several of them, actually. It should come as no surprise that, as someone willing to share her monthly expenses with the entire internet, it took almost zero time for me to be totally transparent with a partner.
Luckily, he went with it, and we’ve never had any big problems talking about money. That said, things can always change when you’re sharing a space, and one of the big things for us was the grocery situation.
Now, some bloggers have done a great job talking about how they share expenses with their significant others, like this post from Money After Graduation about their joint account set-up. The Boyfriend and I have opted for a slightly less involved system, and while it works perfectly for us, it could probably work equally as well for roommates who want to split costs – bonus!
Even without jumping into the shared-account thing, we decided that splitting our monthly grocery and “consumables” budget was a great plan as we started living together. Why would we each buy separate things, when we ate almost every meal together and did laundry together? Makes no sense.
We also had the silver bullet we needed to make it work: receipts.
I know, so high tech, right?
Trust me, it took a while for me to get used to accepting the receipt for every purchase that went into the “sharing” bucket. There were literally times that I would tell the cashier I didn’t need my receipt, and then immediately backtrack as I remembered that oh shit, I really do need it.
As a person who used to work in retail, I am properly ashamed of myself for the hassle.
At the end of every month, I tally up both of our receipts for qualifying purchases – mostly food and cleaning supplies, plus anything we thought fell into the “throw it in with the groceries” category – and divide it by two. Whoever paid less than that amount owes the difference to the other person.
This system is great because it’s so flexible. It can scale down to accommodate roommates who sometimes want to split cleaning supplies and the occasional Chinese food order, or scale up to accommodate more expenses if you just aren’t ready to open a joint account.
If you think this might be a good system for you, here’s what you should keep in mind going into it – and before you go any further, grab this handy spreadsheet to help you split your expenses with someone else. It’s got all the formulas done for you and everything!
Will you split everything 50/50?
With roommates, this might be a moot point, but if you’re dating someone, it’s worth talking through. Does it make more sense to split things 50/50, or do you want to take other things into consideration?
For example, if one of you makes a significant amount more than the other person, will that impact how much you each contribute to the total bill each month? Or maybe one of you prefers to eat exclusively caviar and gold flakes for breakfast. That person might contribute more to cover their (entirely absurd and probably not even that tasty?) food choices.
What will constitute a “grocery” or a “consumable”?
We tend to go with the flow on what constitutes a split-able expense. All of our weekly groceries are included, but any supplies for The Boyfriend’s home brewing or my baking are considered separate. We’ll toss in any cleaning supplies, and sometimes throw in the odd dinner out. That said, such a flexible system might not work for everyone.
If you think going with the flow could cause problems, make a list ahead of time as to which purchases each person can expect to split with the team, no questions asked. That avoids any “But I thought my breakfast caviar was COVERED!” issues. (I’m really married to this example, it turns out.)
Who manages the process?
Receipts kind of need management. They’re not the most easily-kept-track of things, and in a system like this, each person needs a way to keep track of their receipts that works for them.
Beyond that, I’ve found it works best to have one person in charge of keeping the process on track, i.e. gathering up all the receipts once a month, tracking down any strays and doing the final tally. Shockingly, as a personal finance blogger, I enjoy this process, so I take the lead on our grocery tally every month.
What oversight does the other person want – if any?
I’m lucky that The Boyfriend has total faith in both a) my mad calculator skills and b) my desire not to slowly steal $0.10 from him here and there. That said, every month when I walk up to him and announce what he owes me, I always offer him a look at the pile o’ receipts and the final calculations. Without fail, he couldn’t care less, and waves me away without ever looking at them.
Direct quotation from the Boyfriend,
“I have better things to do.”
That might not be the case in every situation, and even in our very trusting situation, I still think it’s important to check in and make sure everyone involved is comfortable with exactly how involved they are. Have this chat when you get started, but for maximum comfort, bring it up every so often just in case. You never know when someone might get suspicious that you’re playing a very long con and stealing tens of pennies a month from them.
You just never know.
How often do you “settle up”?
The reason we went with a monthly tally is that it’s uniquely suited to our situation. Not only do I rent from The Boyfriend, since he’s a fancy-pants homeowner and all, but I’m also the Head Grocery Shopper in the household. He takes care of so much of the home maintenance, since he owns the place, that this was a way I felt like I could really contribute to the household.
What this ends up meaning is that at the end of every month, I have spent the bulk of our $600-ish monthly grocery budget, and purchased the vast majority of our consumables. He usually ends up owing me a sizeable balance, and we just subtract that from the rent I owe him for the next month. It sounds complex when I write it out, but we’re in such a good groove that it works for us.
This is probably not a widely-applicable set up, so my best advice here is to take a look at what makes your situation unique, and work with it. How can you put together a system that is uniquely suited to making your life easier, while still keeping all the money stuff on track?
Just do that.
Actually, that’s a pretty good recap of how I feel about personal finance, so it bears repeating.
How can you put together a system that is uniquely suited to making your life easier, while still keeping all the money stuff on track? Just do that.
If that involves sharing your groceries, or your home, or your money with someone else, how did you manage it? Did you run into anything else you’d suggest for people who are just getting started, or thinking about it?
Sounds like you’ve got a great system that works for you. Mr. P and I didn’t live together before we got married, but it’s been interesting to figure out how to split our funds now even. I mean, we’re married. My money is his money and vice versa. But when it comes to spending, it can get a little tricky. The first time I got my hair hairlighted after we said “I do”, I remember insisting that he go out and buy something of commensurate value. Now, we just have a number that we’re OK with spending each month and give each other a heads up.
I have a friend who lives and dies by spreadsheets and actually spends a percentage relative to her income. So if she brings in 55% of the couples’ earnings that month, she’s entitled to spend a bit more than him. They’ve been together for eight years..but that system sounds crazy to me. What do I know?! 🙂
I think it is just about the sweetest thing that you insisted he go get himself something after you got your hair highlighted, especially since I can TOTALLY see myself thinking the same if everything was merged! I’m glad you’ve figured out a system that works for you – I think something along those lines, where each person has a “no questions asked” amount each month, would work really well once we’re into the share-everything phase.
Since I’m usually the person who makes less in the relationship (I have a habit of dating engineers, haha) I definitely can see the logic in splitting expenses along income lines *if* there’s a big discrepancy, more to make sure that one person isn’t stuck paying like, 60% of their income towards rent, haha. That said, after a while – and eight years definitely qualifies as a while – I’d hope to have found a less stringent solution! But whatever works for them 🙂
I lived with a roommate once and we split the groceries 50/50. We found the easiest method was for me to get a credit card solely for groceries and I we would shop together or I would go alone and then we would just split the credit card bill at the end of the month.
Now I live with my boyfriend and I buy all the groceries- he tends to buy all his own breakfast and lunch foods, but we eat dinner together so those are the shared groceries. I pay for all the groceries I buy- including some foods he eats, but then again, he pays all expenses for his car and will drive me places or lend it to me now and again so I think it is even 🙂
That’s awesome! I love hearing about the other ways people split expenses, because it so often ties into the way they share other responsibilities too – like you guys and the car vs. grocery split! It’s great that you’ve figured out a balance that you’re both comfortable with, which is the most important thing.
Also, I accidentally typed “thang” instead of “thing” in that last sentence, and I spent more time than I’d like to admit thinking about leaving it that way. ALAS, I am just not sassy enough to pull it off.
Bravo for finding a system that’s working for the two of you! Before we combined all of our finances, we found it easiest to just each pay for certain things (me=car and groceries, mr.=rent, the cable he insisted on at the time, and random stuff), and we didn’t keep tallies, especially because we had pretty sizable income differences. But everyone has to find what works for them, and we each didn’t care too much who ended up paying more or less month to month so long as it all worked out. But then, my mom and her husband still keep a running tally and treat their finances as if they’re college roommates, not a married couple in their 60s! It sounds crazy to me, but completely works for them. 🙂
Hahaha isn’t that the best part about personal finance? “I’m sorry, you do WHAT and you’ve been married for a zillion years?” I love hearing about the things that seem totally off the wall to me, but work so perfectly for other people. I’m sure people are reading this and thinking “Receipts? They use… PAPER receipts? Has no one TOLD them they’re millennials? Maybe I should email her.” But again – it works!
And I think it is so fantastic that you didn’t keep tallies in the spirit of everything working out in the end – I think that’s a lovely sign of trust and a strong partnership! Clearly it’s been working for you 🙂
My husband and I consider any money that we have to be “our” money and don’t really worry about who is paying for what, but that works because neither of us are super spendy… If either of us wants to buy something a bit more substantial, we’ll discuss it together before buying it so that we know we are both on the same page.
That’s fantastic! I love the mindset of “It’s all our money” once you’re married, and I really hope to build the same if/when I end up married. It feels so much more partnership-y, but then again, people have to do what works for them. I’m really glad to hear it works for you!
My husband and I do not have a joint account and we just ‘split up’ the main bills so it’s kind of equal. Then the rest of our spending balances out. We are both pretty thrifty so shopping here and there we just buy out of our own hard earned money. We will discuss major purchases, but the minor stuff: no convo. It just works for us this way.
A lot of people have mentioned the “discussing major purchases” thing, which I think to most people who read/write personal finance blogs, makes a ton of sense and is one of those obvious things – but can you imagine what it would be like to NOT do that? Like, “Oh, honey, I spent $1500 on a surprise new TV, I hope you like it!” …. UM.
Hahaha my point being, I’m glad you’ve found a system that works for you! Cool that you still maintain separate accounts too, and balance from there 🙂
Haha, you are right and surprising some people actually WOULD do that???! Uncool! Yep – each couple kind of has to work through the kinks and just figure out what works best for their situation. My main advice: keep whatever conflict at the BARE MINIMUM whatever that may be 🙂
Oh my goodness, I couldn’t be nodding harder in agreement IF I TRIED! I know some people thrive on conflict but I am so not that person. Give me happy and calm and agreeable any day. Minimum conflict is the dream! (I will literally just cave in and agree when people who like to debate contentious issues “for fun” try to convince me that their views are the Right Way to Think.)
Mmmhmmm, girl you are spot on! The last thing I need in my marriage is constant conflict about who’s paying for dinner. There is ENOUGH bigger, better things going on you have to work through LOL! Which, is why, our accounts remain separate haha! My mom thinks I am crazy that we don’t have a joint account – but I think it is GENIUS 🙂 🙂 But, discussing money with your roomies, potential spouse, or spouse is so important. So, it’s great that you guys are openly communicating. I can’t imagine anything else that could be more rotten than dating and never discussing or viewing spending habits and THEN getting married for a horrendous ‘surprise!’ 🙂
Mr. MyCountdown and I share a joint checking, but each have our own separate checking and savings accounts. Our paychecks are deposited in our separate checking and then we transfer money into the joint checking for bills, groceries, etc. That way, we both feel like we’re contributing to “household” stuff, but each still has some control over their “own” money. I say, use whatever system keeps the financial peace in the home.
Yes! There’s no reason to force anyone into a system that causes conflict, haha. I’m all for a peaceful home, and it sounds like you’ve got a fantastic system going for you two! Kudos for figuring it out together and getting it set up so it works for both parties 🙂
We used a system very much like yours until we were married, except I didn’the charge my girlfriend any “rent” other than half the utilities and property tax. In exchange, she didn’t gain any financial interest in my house until we were married. Rent seemed too complicated as I would have to declare it as taxable income… but I had lived in my house by myself before she moved in. If she had displaced roommates that had been helping to cover my expenses then that would have been a totally different situation.
Since we got married, all of our assets are joint with rights of survivorship. This ensures that when one of us dies the other person has immediate access to all our assets. We don’t have any separate accounts (except RRSPS and TFSAS which cannot be joint but can have the spouse as a beneficiary). To my mind this is the ideal marriage situation and we have never had a problem. If one of us makes a mistake that blows the budget some month then we both need to face the consequences in following months. I think this helps strengthen each of our accountability to our joint financial future.
That being said, I know many people where this would never work. If one person consistently over spends the other would get resentful. I think our system only works when both people are equally committed to the budget and have the same level of discipline. When we first got married we experimented with small allowances for a while but it petered out fairly quickly…
I love, love, love hearing about how other people managed this situation – thank you so much Jeff!
I totally get your perspective on the rent and taxable income thing – it does make things a little more complicated for one of us at tax time, haha! But at the same time, I basically did replace two roommates, and since we were both (probably overly) open about our monthly budgets and cashflow, it made the most sense for us for now. We have a rental agreement in place, and because I’m not gaining any equity in the house, it’s clear that any unexpected or major house expenses aren’t mine. As a trade, he doesn’t gain equity in the dog and I pay for the vet bills, haha.
I feel like maybe one of us is getting a better asset out of this, but at the same time, I stand by my fur-covered choice 😉
I also love that you guys take such a team mentality, of “if one of us blows the budget it impacts both of us”! I hope to build that in the future once joint-everything is in the cards, but I’m also open to a range of options. It really all does come down to what works for each couple! I’ve heard some people do swear by “allowances” but I’m not surprised you two gave up on the hassle, lol.
This is a little after the fact, but have you thought about using Splitwise instead of manually tallying everything? It would function in the same way, but has a lot of extra features and since I can access it through the phone app or desktop I find I can just add things as I go through the month rather than having to keep track of all my receipts for that long.
Oooooh, I have literally never heard of this, but I’m going to check it out! Thanks Emily!
I’m having a disagreement with my wife. we split our expenses. We’ve been married 2 years but together 10. She dislikes paying for half of the groceries as many of the items are things she doesn’t eat or drink-ice cream bars and beer. On the other hand I pay for half of things she uses more of than I-toilet paper and vegetables. When we go out to eat or for entertainment I am expected to buy the meals and pay the expenses. We just had a $75 dinner in which she had more wine than I did. Our Las Vegas vacation cost me $1200 and I pay for all the gas when we go anywhere. She will occasionally pick up a meal and drinks and most of the time the tip. I am angry and frustrated that she feels shouldn’t have to pay for things she doesn’t eat or use. I buy her flowers once a week and deduct those from the grocery bill. I buy her trinkets (yes jewelry) all the time. Is it too much to ask she contribute to the small things or should I just remove them from the list.
I’m so sorry to hear you’re angry and frustrated by this situation, and I can see why, it sounds like a difficult position to be in. If I were in your shoes, I’d ask if there was a time we could sit down to review our past month’s spending together, and review the list of things that qualifies as “expenses” that we both share. If my partner felt like travel was something that didn’t qualify as a shared expense, and was clear about that, I’d reconsider spending for both of us to travel unless I really was comfortable shouldering the full expense. It sounds like if expectations were more clear, it might help avoid some of your frustration around it – and if the expectations that are set out aren’t reasonable, you can identify that issue with her then. Does that help at all? I’m very sorry you’re in this situation. (I have to say it does sound unfair.)
I know this is an old post, but I just stumbled on it and wanted to throw in my two cents.
When my husband and I moved in together, we were in a very similar situation. Our accounts were completely separate. He owned the house and I was paying him rent. We similarly decided to split groceries and consumables. Furthermore in similarities, I did (and still do) all of the shopping each Sunday.
However, our approach was different. We just alternated weeks, since neither of us was especially concerned on the exact amounts being perfectly equal. We figured it would balance out eventually. I think we were also already in the mindset of “joint finances”, but with separate accounts. On his weeks, I used his credit card. On my weeks, I used mine. Easy peasy.