Why You Should Split Your Expenses 50/50

A lot of couples that I meet do not pay their expenses equally; they split them according to how much they earn.

For example – If person A earned £100k and person B earned £50k and their joint mortgage came to £1500 per month; person A would pay £1000 and person B would pay £500. This would be repeated with all of their expenses.

Throughout the 7-year relationship with my future wife we’ve always split them equally, even though I earn considerably more. I’m met with lowly stares from the percentage based couples every time I say that we do this – I can almost see the “You’re a dick” comments behind their eyes!

So – this post’s for you guys; the ‘percentagers’.. This is why everybody should be splitting their expenses equally.


Consolidating your expenses has long been a tradition in British culture. It stems back to the days where a father had to barter with other families to trade off his daughter as a bride in place of cattle or arable land. The daughter would then become the property of her new husband. Their finances then become one, “What’s mine is yours.” It was the wife’s duty to raise children; it was unimaginable for them to earn money, so the joining of the household finances had to happen.

Of course – in the modern world, things happen a little differently. Women are now in high paying careers all over the world, their wages have almost leveled out, or in some cases surpassed males in the workplace.

Couples are on an equal playing field, so why should this age-old tradition of consolidating your finances continue when each person is as able as the other?

Here are the 3 main reasons why you should be splitting your finances equally and why doing so should be the go-to de-facto for FIRE pursuers.

1) Encouraging You to Earn More

For every extra £10,000 the £100k earner makes they’ll lose £6,200 to tax. If they’re a ‘percentager’, they’ll also have to pay up an additional £1,200 per year on their mortgage (with the above illustration). That’s £7,400 out of the £10,000 that they’ll lose instantly – this is without even adding all of the other expenses! Almost all of their £10k gain is wiped out, it will also wipe out any motivation they ever had to earn more money.

The same thing will happen for the lesser earner. They’ll be demotivated to earn more due to the fact that they’ll also see their expenses increase.

“When the efforts and rewards are shared, it becomes apparent that the individual’s own efforts will have a less significant effect upon his eventual reward than if he were acting alone.”

“Of course, he expects to get half the value added by the other person, too; but he doesn’t control the other person’s effort. He controls only his own effort. So what he controls will produce only a half reward.”

Harry Brown – How I Found Freedom in an Unfree World

One of the traits that the FIRE community and myself preach is to always strive to generate side income. To do this you need a hard-working mentality, but you also need to be willing to try lots of new things. Higher-rate tax already puts a dampener on the UK hustlers spirit, you don’t want to make it worse by using a percentage based expense system.

2) Fighting Lifestyle Inflation

For everyone that’s thinking “But I don’t want to spend more than my partner.” Or “I earn more so I should pay for more.” You don’t have to do that; listen up!

I earn three times what my partner earns in a year. We split everything equally and if she needs money, I’ll give her an interest-free loan – just like she’d do for me. We’ve been together for 7 years, own a home and we’re getting married next year (Yippee!!) – We’ll carry on splitting our expenses this way once we’re married. BUT!… I don’t plan on retiring without her. If I hit my FI number before her, I plan on continuing to invest until we both have enough to retire, I’ll also be filling her ISA when mine is full. As soon as we have children or get married our pots will be seen as one legally anyway.

Most importantly; I don’t spend more than her – we spend equal amounts (we’re a team!) Splitting your expenses equally allows you to instantly beat lifestyle inflation. If we split them in a percentage based fashion, I would instantly be spending much more, and Mrs SavingNinja would have a lot more cash in her pocket. We’d need to battle lifestyle inflation just like all of the other high earners. Instead, I invest all of the difference (and then some) and we spend equal amounts, if we can’t afford something, we don’t buy it! I’m not going to go off and buy fancy clothes and a nice car and leave her behind, we’re in this together! But, by splitting our expenses equally; we’re on a much better path to FI.

3) Keeping Things Simple

Like FIREvLondon talked about in this excellent blog post; Complexity Costs. Keeping life simple is one of the greatest hacks to happiness and wealth presevation, and its much easier to split everything equally than to mess around figuring out percentages based off earnings.


Of course, all of these points are subjective to how you live your life. It’s easy for us as we live on less than minimum wage, so we can split our expenses equally and not miss the extra thats going into Vanguard.

It may be a bit trickier if you need to increase your household expenses due to children or other unforeseen costs, and the lesser earner may be unable to earn more (although I believe anyone can earn the salary of a CEO). But, I think for the majority of people, they’re doing themselves a disservice by splitting their expenses in a percentage based manner.

Do you think you could lower your expenses enough to be on an even playing ground at 50/50? If so, try it out; just for a couple of months. Expense equally and save the difference – You’ll be surprised by how much your savings rate goes up.

Opinions?

  • Do you split or intend to split your expenses equally?
  • Do you think it’s unfair if the higher earner doesn’t pay more towards rent/mortgage costs?

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17 thoughts on “Why You Should Split Your Expenses 50/50

  1. Interesting post, SN – sounds like splitting 50/50 works for you and your missus but it’s unlikely to work for everyone. For me in the past, a variant of the % split worked best and seemed to be the most fair.

    If you were to lower your example salaries to average or below average and it’s going to be a lot tougher on the lower earner who may barely have any money left.

    “They’ll be demotivated to earn more due to the fact that they’ll also see their expenses increase.” This I’m afraid I’d have to disagree with, I can’t see the the prospect of having to chip in more towards expenses being a deterrent for anyone wanting to earn more! You’d be happy that you could afford to pay more because you would have more in the first place.

    That’s kind of you to offer an interest free loan to your gf but if that were me, having to get a loan as I had no spare cash because as the lower earner I still had to pay the same as my higher earning bf, I would not be happy! But, it sounds like it works in your relationship! I’ve experienced it both, ie being both the lower earner in a relationship and then the higher earner – it didn’t seem fair to me to split bills equally. Especially as household chores were never split equally… my ex got away with doing less chores when he was contributing more, though I can’t say it was the same for me when it was the other way round!

    There’s no one size fits all for this, what works for some couples may not work for others.

    1. Hey Weenie,

      Thanks for commenting 🙂 I agree, if one earns considerably less and their salary is less than 50% of the couples minimum expenses, additional contributions will have to be made. But – if the low earner was single, and they were instead sharing a home as friends, how would they survive?

      If the higher earner wants a more luxurious life or a bigger house, then of course; he should stump up the extra! But if both people can cover their own expenses, there’s no reason for the higher earner to pay more just because they earn more. If I was single and met someone who expected this straight away, I’d think they were with me for the money!

      The main point that I wanted to drill into people was this:-

      Lower earners shouldn’t inflate their life to above the levels that they themselves cannot sustain solely. The higher earners should also spend on the same level as their partner, and invest the difference! If this isn’t done – there’s lifestyle inflation at play somewhere – which is cool! Sometimes people need (or badly want) to inflate their spending to above the minimum level! Or they may decide for someone to stop working and maybe look after children, which is cool too 🙂

      But of course; like you said; every persons situation is different!

      1. “if the low earner was single, and they were instead sharing a home as friends, how would they survive?”

        They wouldn’t, they’d probably move back in with their parents… 🙂

        1. If that’s the case then of course they wouldn’t be able to split equally! Although I’d then recommend that the earner helps the other get a job where they’re earning minimum wage – if they weren’t married, they’d probably be able to claim benefits until they did so. (I really believe anyone can live off minimum wage)

  2. Interesting topic. How does this work for married couples where one of the family members reduces hours to look after children? Perhaps this fits the families lifestyle and the balance works far better than both working full time and having the children in full-time childcare from 8-5pm?

    Also as suggested above how does it work if one member contributes significantly more on the day to day living side of things? Cooks all the meals, housework, arranges all bills etc etc.

    It’s an interesting discussion point but it feels a little one dimensional to your own lifestyle as opposed to advice which works for the masses. I also think a lot of what you are suggesting is the opposite to what the FI movement means to me. Why always the encouragement to earn more?

    In my house, my wife reduced down to part-time hours and raised our daughter. We see our incomings as a collective where we both collaborate to provide the best balance in our life possible. This is across work, play, fitness, health and anything else which contributes to a great life.

    I understand your rationale here but it all feels a little focused on the numbers as opposed to how I see life.

    1. Hi Ryan,

      It won’t work for families that have a designated individual who reduces their hours to do house work and look after children. I can’t comment on that as I don’t have kids, but we do plan on both taking equal time off when we do have kids, even if I am the higher earner, it’s one of the benefits I see to FIRE; having equal opportunities to both stay at home; instead of having one of the parents having to stay in work as the sole breadwinner.

      With regards to earning more, it’s one of the sole purposes of this blog, along with finding fulfillment 🙂 I kind of have a fatFIRE attitude with a frugal and minimalistic life style!

      I know that a lot of couples adhere to the one pot for everything rule, it’s the norm! And it does promote a feeling of unity and family. Although I feel it encourages life style inflation – as I said, it’s easy for me because we both live on minimum wage, so we don’t have to split anything other than equal! Even if our expenses went up three fold, we’d still be OK with this technique.

  3. Click bait title alert!!! 🙂

    Maybe a better title would have been Why you should split your expenses if you are both working full time and have no children?

    Anyway some more serious thoughts on it, and won’t repeat other points made by previous commenters:

    Your point #1 makes sense to me but there is a faulty assumption (IMO) in there about tax. I don’t think the splitters are stupid enough to split on their pre-tax income are they!? I dunno, that would just seem really dumb, but people can be I suppose haha.

    #2 “If I hit my FI number before her, I plan on continuing to invest until we both have enough to retire, I’ll also be filling her ISA when mine is full”
    If this really is your plan then the final outcome is absolutely no different than if you either just:
    – Pulled your resources and stuck all your income in a joint account and spent what you both currently spend
    – Split 50/50
    – Split 70/30 (or whatever your income levels are)

    The total income and expenses in all cases will be exactly the same and you are going to invest the remainder across both of your ISA’s etc… so really it doesn’t actually matter how you split things up.

    That’s not to say you shouldn’t do it 50/50, do whatever works best for you, but that it’s just down to personal preference rather than that being the optimum method for any given person.

    Of course if you weren’t going to help Miss Ninja out with her savings that is a different kettle of fish, and you would hit FI much sooner and she’d be working for much longer, but I think that would trigger a well deserved “You’re a dick” comment from most people!

    Glad to hear that you are not actually a dick 🙂

    On #3 We just stick all our money into one account and spend from there, which on the face of it is very simple. We do a few other things which complicate it somewhat and are probably unnecessary for most people, but on the face of it that is just as simple if not more so than splitting things 50/50

    Cheers!

    1. That’s a more accurate portrayal of this article, although a bit of a mouthful 😀

      #2 That’s the point I was trying to make; it’s exactly the same! Although, (in pre-children, full-time work scenarios), I feel not splitting equally adds to the risk of life style inflation and a less is more kind of attitude to making money/trying new things. Of course, if the couple resists life-style inflation and doesn’t care that they’re expenses will go up if they start earning more, then it wouldn’t matter! But I do think that in these cases, even if people think it won’t affect their behaviour, it may do subconsciously.

      #3 True it would be easier to put everything in one single account. However, this maaayy result in the “I could do less work and get away with it.” subconscious thoughts popping into our heads to help us procrastinate. In-fact, I know of a couple of un-happy marriages where arguments have spouted up due to thoughts like “I make all of the money.” Or “You spend all of my money.” Even when both are working. If they could split their expenses equally and invest the difference, there may be a lot less arguments, and more financial prosperity?

      I’m playing the instigator here a little. I do believe in this philosiphy, as I do it myself! But of course, my pre-children, both working in fairly decent jobs lifestyle is a lot different to most other people. This all may change after we tie the knot next July 😀

      Also…. along the lines of the dick comments. Reaaallly, if you were both working full time and had not taken on any additional duties at home. Who’s to say the higher earner can’t retire earlier than his spouse if he’s worked double the hours than them on side-income generation and personal development? I really believe in individuality (totally opposite of what a ‘marriage’ should be I know!) and you should get out what you put in. Again this is flipped on it’s head if there’s been someone who’s taken a pay cut or whatever to stay at home for the ‘family’. -Not saying I’m going to do this, but I think the person would have a right to, without necessarily being a ‘dick’ 🙂

  4. Oooh – interesting. (also, hi! relatively new reader here, but I’ll be back!). My husband and I do a combination. Some things we split 50/50 and some things on a salary %age basis.

    When we first got together, I had not yet joined the workforce, and we started living together around when I got my first job. I moved in with him and joined him in a lifestyle that I was years away from affording. We have a significant age gap, which translates to a significant earnings gap that is likely to be present for a long time. When we started combining finances we wanted to balance:
    a) Me being able to make a fair contribution to our expenses whilst also having the ability to build up independent savings
    b) Him not having to shrink his lifestyle (which was and is comfortable rather than lavish) in order for us to be able to split things 50/50

    Simply put, if we had split things 50/50 when we first combined our finances, we would not have been able to afford the rent on the perfectly good flat we were in, which was well within his means.

    Fast forward ~8 years. Now, more of our shared expenses are 50/50, though some of our biggest expenses are split by salary ratio (mortgage, insurance, utilities). The gap in our earnings is still significant, though less so – more importantly, the gap between our household income and expenses is growing, which means that we both feel like we have enough surplus to save. It also means that many of our 50/50 splits are a bit more approximate. We will never go fully combined finances (for a few reasons), but because our spending feels well-aligned and we are practiced at talking about money as a household, things still feel fair.

    Going forward, I imagine we’ll keep the mix of 50/50 and salary %age, particularly if we’re having years where one of us is significantly outearning the other. It works well for us, particularly in compensating for the fact that we’ll be hitting our career peaks at very different times, and it will be interesting to see if more things fall out of the %age category and into the 50/50 gategory as we get even more comfortable with joint finances.

    1. Hi cb1zn,

      Thanks for sharing this 🙂 I really think as we move forward into the 21st century, pooling money together when being in a serious relationship (or marriage) is going to become less and less popular.

      This will definitely be more the case when/if all countries adopt a parental leave policy like this one Iceland has. Where mothers and fathers are forced to take 3 months off each when they have a child. This will further lessen the gender wealth gap and promote equality so mothers will not feel like they have to stay at home. I think when pooling resources is concerned it generally happens due to cases like this.

      Of course not in your case though. Not splitting equally was perfectly valid in that scenario, your OH didn’t want to de-inflate his life, so it’s only fair that he payed more for it and brought you on board.

      It would be very interesting indeed to see how your expenses end up down the line! As I’ve said in other comments; I think this decision was an easy one for us as even my OH as the lower earner can pay her equal half and still save over 50% of her salary.

  5. Erm, I think you have a rather interesting libertarian view of the world.

    I don’t understand why you linked to an article that states as the main points
    “The gender pay gap for full-time workers is entirely in favour of men for all occupations” with commentary the pay gap has levelled out?

    Do you think it’s OK 80% of companies pay men more? Do you think that’s equal?

    1. Hey Ms ZiYou,

      Of course not, I think that’s one of the reasons why equal thinking such as this needs to happen (same with paternity leave).

      I haven’t read the full case study, I was referring to the graphs when I said almost levelled out. And they absolutely almost have when looking at a time series chart for the last 50 years.

      As the majority of unequal expense systems seem to be attributed mostly toward the false presumption that women should stay at home and men be the primary bread winners, I’d say this article is very ‘for’ equality amongst men and women 🙂

    2. I’m going to be really argumentative and say I disagree with both (nay…all?) your points here… 🙂

      @SN – Although you did clearly say “almost” levelled out, the graphs do show a ~10% difference, which is not insignificant!

      @Ms ZiYou – However, if you are going to quote the main points of the study please also look at point #2 which states:

      “When looking at age groups, the gap for full-time workers remains small at younger ages; however, from age 40 onwards the gap widens reaching its peak between ages 50 to 59.”

      I know SN didn’t go into this sort of detail but he wants to keep his blog posts concise and readable which I think is fair enough. In his age bracket it seems that men and women are in fact pretty much equal now in terms of pay, and so his conclusions that follow to split 50/50 seem valid, if based upon evidence for his own age group.

      Also “Do you think it’s OK 80% of companies pay men more? Do you think that’s equal?” – That’s unfairly insinuating that was the point he was making, which was clearly not the case.

      @SN – Sorry you are still not off the hook either:

      “attributed mostly toward the false presumption that women should stay at home and men be the primary bread winners” – This is just nonsense, although I realise you were just responding to a fairly off topic point in the first place so no worries 😉

      People create their expense systems according to the reality of what they are living in, not due to presumptions about society or whatever. It just so happens that I earn far more than Mrs T therefore splitting evenly would be ridiculous. If Mrs T earned far more than I did we would follow exactly the same system and pool our resources. If a couple followed the “different percentages” based system based off of their income differences, then the woman who earned more than her partner would end up paying more. None of any of that has anything to do with gender inequality and all of those systems are fair, or equal if you will.

      Which all goes back to my point of just doing whatever works for your given situation.

      Cheers 🙂

      1. You should rebrand as theFIREextinguisher! 🙂

        Posting about controversial topics is always tricky, but it invokes conversation – which is great!

        I actually had a great chat at the last FI meet up with one of Mrs YFG’s friends. She was a young investment banker living with her boyfriend who was earning considerably less than her. She was telling me how she told her boyfriend that he could easily get into investment banking if he wanted to, but he told her that he didn’t want to due to the mega long hours and stress and that he’d rather earn less.

        She on the other hand is working double what most professionals work to earn more in a highly stressful field. She also split her expenses equally, as she thought it would be unfair any other way as she chose this lifestyle for herself; she chose to work extra to earn more – why shouldn’t she reap the reward?

        Obviously, this goes against the whole la di da hold hands and love one another vibe that the FIRE community has going for it but in lots of these cases, I agree. When there are no bias or life situations to affect ones earning capabilities, if one person directly decides to work 80 hours per week instead of 40, and the other decides they’d rather go on Facebook or play video games in their free time (which is fine!), why should they pool their money?

  6. I don’t think my girlfriend would be too happy if I showed her this post, haha.

    I currently earn a lot more than my girlfriend; she’s gone back to university and doesn’t earn much per month. She contributes maybe 10-15% towards our expenses and I cover the rest. This then allows her to live her life without having to ask me for a loan every week! We’ll definitely reevaluate this arrangement when she finishes in two years, and probably move to split them 50:50, even if one of us earns a few thousand more than the other, but until then this works for us.

  7. I’ve been mulling this over for a while and admittedly, I’m still scratching my head (on both approaches – splitting bills equally and splitting then by earnings).

    I do get it when you’re young and relationships are perhaps more fluid. I totally get the investment banker example in the comments above, for example.

    I think what I don’t get is the idea of bean-counting when you’re older and relationships are more established / permanent. For example, you’re quite happy to do the whole “until death do us part” thing, but as soon as the gas bill lands on the mat you’ll be whipping out the calculator to see how much you / your OH should pay? Really?

    I don’t find that I have to limit the funds my OH has available as a way of avoiding lifestyle inflation. Surely it’s about negotiating shared goals rather than the higher earner imposing their financial values by rationing the other partner’s access to the readies?

    Out of interest, what’s your view on pre-nups (in general, within a FI context) when, for example, someone who is FI marries someone who is broke (to take the extreme case). Should the richer party get a pre-nup to try to protect their FI status should the worst (divorce) happen?

    1. Hey Jo!

      We actually both spend on mine or her American Express card (depending on who’s welcome offer we’re trying to fill). We then go through the statement at the end of the month and split everything equally if it’s a joint expense. For our mortgage and gas/electric, we have that going into and out of our joint account automatically, we only recently got a joint account due to the insurance benefits. Before it just came out of my account automatically and she sent me half automatically.

      This article has kind of glossed over the “One Big Ass Pot” option. It’s more comparing the percentage based and equal ways of splitting bills. I can imagine that when we have children it will be annoying/weird to have to still go through and split all our bills at the end of the month. But we would probably still like to as we like spending our own money and controlling our own finances. I’m really weird with buying things, I don’t want to be constantly critiquing my partner’s shoe or Primary spending. I’d rather not have the faff or the arguments. I do every now and again say things like, “You should probably try and stop spending as much for a bit due to X and X.” But if we had one pot it would probably be more like “WHY U SPENDING ALL MY MONEYS?!” Even if she spent the same. There’s a sense of individualism as well as avoiding unnecessary faff/argument.

      I do hope that by the time we have kids we won’t need to work anyway (or at least not much). At that point, we may opt for a ‘spending’ pot each out of the main pot. I have seen the 50/50 split predominately amongst couples who both have higher paying careers and slightly different financial aims or spending habits.

      I personally think pre-nups are good. If no one party sacrifices their career or earning potential for the other, it’s absolutely ludicrous that upon divorce net worth is split equally. Especially if one person earns a lot more (like the investment banker example above). No matter how much you think you love somebody, you never know what the future holds (shitty view to have going into a marriage I know, but I’m a realist).

      Unfortunately, though, they don’t really hold their salt in the UK. If kids or even a mortgage is involved, the court generally throws them out. At least that’s what I’ve read. They’re also pretty pricey to try and set up properly.

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