How to Share Expenses With Your Partner
Guest Post by Michelle Dear of Tandem, an expense sharing app for couples
Updated with a companion video March, 2023
How to Share Expenses with your Partner
Relationship timelines have fundamentally changed, but financial products have not; couples are functioning as one household, yet living separate financial lives. Expense sharing is the first financial experience in a couple’s life together and historical methods couples have used are manual and lack transparency.
Traditionally, one person pays for the first date (chivalrous). Second date? Fine. Third date? Tough... What happens when you start to split expenses more frequently, move in together, or get a pet with your partner?
Graphic by Tandem, Data by Stanford, 2017
What to Know Before Moving In Together
You don’t have to look hard to see that relationship timelines are changing. Back in the 1960s, moving in together and getting married were synonymous, and couples got married around two years after they met. Fast forward to today, couples are dating for two years on average, then moving in together, dating for another three and a half years, and then getting married (to be clear, marriage isn’t the goal for cohabitating, just sharing stats!). For those doing the math at home, it is taking couples almost THREE times longer to get married than in prior decades. This isn’t bad news--in fact, some may argue there are benefits of moving in together before or without getting married: things like understanding your partner’s funny quirks, learning how to better communicate about shared responsibilities, and talking about how to split bills and share expenses.
Sharing Expenses in a Relationship
Dealing with money in a relationship, regardless of stage, isn’t always fun, but it’s necessary. Before you decide on which method of expense sharing works best for you, it is imperative to get on the same financial page as your partner. This can sometimes take the form of a one-on-one conversation, or seeking the guidance of a financial therapist like Lindsay if money is typically the root cause of you and your partner’s disagreements and you wish to gain a deeper understanding of your financial behaviors. Getting a handle on the emotional side of financial decision-making is crucial to ensuring long-term success as you and your partner grow and make decisions together. Lastly, couples are realizing it's fun to build a life together. Having two financially savvy people greatly increases your financial outcome as a couple (and who doesn’t want that?).
Ways to Split Expenses With Your Partner
While there are many ways to share bills and expenses with your partner, there are two common ways that will be shared in this post. The 50/50 method and the income-based method are ways to split expenses with your partner.
Splitting Expenses 50/50
For some couples, drawing a line down the middle of their expenses and having each person contribute 50% is what works. This expense-sharing method is no bones about it and is straightforward. Each person pays for half of everything. Pros: Egalitarian, in theory, no arguing over who owes each person what because everything is split down the middle, works well if each person has a similar income and similar schedule. Cons: Doesn’t account for large income discrepancies, differences in schedules/time off, differences in what each person values spending on, differences in debt like student loans or medical debt.
Splitting Expenses By Income
In this method, expenses are split based on each person’s income. In other words, each person pays a percentage of each expense that is determined by how much they earn. For example, Partner A earns $72k, Partner B earns $55k, they would split expenses 56% and 44%, respectively. Pros: Each person still saving on bills by sharing them, more equitable distribution than a 50/50 split Cons: Can be a pain to renegotiate percentage splits, doesn’t work well if someone works on commissions or bonuses.
Ways to Transfer Money to Your Partner
Now that you’ve talked about how to split expenses, how exactly do you manage it? In this section, I’ll break down common ways to transfer money to your partner, along with the pros and cons of each option.
Venmo
Venmo is great for early couples. One expense here, one expense there. The idea is that couples don’t have to divvy up each expense 50/50, one person can pick up the tab, and later “expense” a portion of the tab to their partner by sending a Venmo request. Pros: Simple, casual, and requires little to no commitment. Cons: Can become tedious to send money back-and-forth, often one partner takes on more responsibility for making/sending Venmo requests.
Taking Turns Paying
Taking turns paying for bills, dinners out, and groceries can work well for some couples. This mentality is similar to the phrase “it’ll all even out in the wash.” In other words, couples feel ok using this method knowing that sometimes they’ll pick up a bigger expense, and other times, they’ll pick up smaller tabs, with the idea being that over time, they’ll even out. Pros: Can feel egalitarian, no need to track every expense. Cons: Can build resentment if one partner is more likely to pick up tabs, may not work for couples making different levels of income.
Joint Checking Account
Having a joint checking account as a way to share expenses with your partner is another expense-sharing option. The idea is that a portion of each person’s paycheck goes into the joint account, and shared expenses are paid directly from the joint account. This can be done through debit card payments OR through a shared credit card tied to the joint checking account. Pros: Easy to paid shared bills from a joint account, can set up auto deposits from paychecks. Cons: More up-front commitment to set up. And, not to be a downer, but if the relationship doesn’t work out and someone has a resentment bone to pick, they can drain whatever is in the account and there are little repercussions.
Hybrid Expense Splitting App
My fiancé and I moved to Houston for work immediately after graduating from college. Neither of us was familiar with the city (let alone had any friends there). It was just us. Like many, both of our jobs required long hours, leaving little time to be together during the week. Moving in together seemed like the most practical solution. Rent, furniture, décor, groceries, travel, and other expenses immediately came to mind. How would we deal with all of these expenses? We wanted a seamless solution such as a shared expenses app ASAP.
After searching, we couldn’t find one, so we opted to open a joint checking account (in addition to our existing checking accounts). We would not deposit paychecks into the account, instead, we would each contribute a specified amount each month. In addition, we each got a new credit card that we would designate for shared spending only. These cards would be paid out of our shared account. We had to go to a physical branch to apply for an account AND each apply for an ADDITIONAL credit card.
Tandem Shared Expenses App
It became apparent we needed to take what our Hybrid method provided and do it better, and that’s how Tandem was born. Tandem is an iOS shared expenses app that was built by couples who felt the pain. They believed there had to be a better way to tackle expense sharing with their partners and even more – be able to automate it using all of your existing accounts so that you never have to send an awkward Venmo request again. Here’s how it works:
Keep it casual - Tandem automates and replaces Venmo or the manual spreadsheet people are already using, with spending accounts they already have. Simply link up your credit/debit cards and you can see all of your expenses right within the app (note: your partner will not see these).
Eliminate the back-and-forth - Tandem allows you to split your list of expenses with a simple swipe (just like you do with emails). All the expenses you choose to split will show up in Tandem’s Home screen that you and your partner both have access to. Tandem calculates one grand total of who owes who that adjusts in real-time based on what each of you has split with one another. Then you can pay each other whenever you want from within the app.
Custom to each relationship - not all couples share things 50/50, Tandem allows you to split your expenses at the ratio that makes the most sense for your relationship.
Automate - you can opt to automate expenses that you always split with your partner (such as rent or Netflix). The app will track when those expenses come through and split them for you, so you never need to worry about it.
Managing money isn’t always fun, but it’s necessary. The question isn’t whether you should deal with it, it’s how you deal with it. No matter which method you choose, keep the conversation open as incomes, jobs, and energetic capacity shift over time in your relationship. And kudos to you! Not everyone can talk about money in their relationship, you are a HUGE step ahead if you are already talking money.
About Michelle
Michelle Dear is the co-founder of Tandem, a Michigan-based consumer fintech platform that is focused on empowering couples’ financial lives together, starting with expense sharing. Prior to founding Tandem, Michelle spent her career in private equity investing. Outside of work, Michelle loves to explore new coffee shops with her partner, go for runs outside at an unimpressive pace, and spend time on the lake with family.
Additional Resource
Clarify Your Money: For Couples. A self-paced course designed by a financial therapist to help couples get on the same page—emotionally and financially—when it comes to their money.