How to Split the Bills When Spouses Have Unequal Pay
This will be the first of an occasional column devoted to relationship advice around money. No stock tips, no tax advice, just relationship advice as it relates to finances.
When Spouses Have Unequal Pay
A reader recently asked:
What percentage should I pay if I make 400 more than my spouse?
There are a lot going on with this question. First is it $400 more a week? a month? a year? Actually the amount more is less important than what to do when you have unequal salaries.
How to Split Expenses When Spouses Have Unequal Pay
This is almost a universal question because chances are if you’re in a relationship you will at some point have unequal salaries. (The chances of starting at the exact same salary and having the exact same raises over time are pretty slim.) The difference might be small or huge (one person not working) but the issue is the same.
Percentage Method. As the person above alludes to, one way to handle this is by percentages. Each person pays the same percentage of their salary to cover joint expenses. While this seems like a reasonable approach it doesn’t feel that great to me. The problem I have with this method is that the person with the larger salary ends up with more of their own money. While this could be a great method for roommates I don’t think it works for committed couples. It might feel ok that a friend has a lot more spending money than you but your own spouse? This is an issue that could quickly lead to resentment.
Allowance Method. The way I prefer is that each spouse gets their own set “allowance” or spending money. The amount is less important than the fact that it is jointly decided upon and is not based on who earns more. What expenses “allowance” should be used for should also be the same for both people (i.e. – one person shouldn’t be expected to cover groceries with their spending money if the other doesn’t have to.) In many cases it would be the same amount “We each have $100 in spending money” but in some cases fair does not mean equal.
Perhaps you each play a sport. You both are equally committed to your sport and spend similar amounts of time on it. You both think that your spending money should support these sports. Seems fair but what if one of you plays hockey (expensive equipment and ice time) and the other plays soccer (much less expensive). It would be reasonable to say that the person with more expensive sport needs more money to support that hobby. In this case an unequal amount of spending cash could still be “fair”.
Switch Your Viewpoint
If you make more money than your spouse, try to put yourself in the position of the lower paid spouse. What if your partner suddenly got a huge raise and now had a lot more spending money then you? What if they were living on a doctor’s pay while you were living a bus driver’s pay? Would that feel good? Would that feel like you were a team? Probably not.
However you decide to handle your differences in salary make sure it’s something that feels right for both of you.
Do you have a question about money and relationships? Leave your questions in the comments and you might have it answered in an upcoming article.
My world view just changed, I can’t believe someone would ask this, lol.
Isn’t marriage 50/50 when it comes to bills and income? Even a law states this somewhere doesn’t it?
I make all the money now and my wife makes 0, however we consider it all of “our” money and all of “our” bills. In the past my wife has made more than me and we still had the same view.
I like the percentage method because it has a fair approach – if I spent 10yrs in medical school investing time & money to earn more, why shouldn’t I benefit from a larger share vs. a partner that decided to skip college and work at a retail store?
The percentage method is similar to most tax codes – each partner pays his/her fair share according to what they make.
The article suggests “switching your viewpoint” to put yourself in the place of the lower paid spouse. That should be done the other way too – how would you feel as the higher paid spouse after investing $100K+ and 10+ years in college to earn a higher income, and then share 50/50 with a partner that decided to skip college and now makes 1/4 of your income?
A marital union shouldn’t be like comunism where the collective income is equally distributed among all. That may feel ‘fair’ to lower earners, but not so fair for higher earners. Unfortunately that’s the law in most places.
Personal opinions aside, the best advice is the article’s closing sentence: Whatever feels right to both of you is the best solution for your marriage.
I think it’s really interesting that the first 2 comments take opposite views. Thank you both for your replies. Any questions for the next article??
Yes, this is such a bizarre question. The money should all be in the same pot, so it really shouldn’t matter.
Just split them 50/50 if you’re uncomfortable having one person paying all of them.