Guide: How to Share Expenses

Guide: How to Share Expenses
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Household Expenses vs. Personal Expenses

In general, household expenses include rent or mortgage payments and utilities. These are the bills that must be paid every month no matter how many people live in the residence. Utilities can include electric, natural gas or propane, water, sewer, and trash. Other monthly expenses could include a telephone, cable/satellite, or Internet bill. Those “others” could be up for debate in some households.

Food expenses could be considered household or personal expenses. If everyone in the residence is responsible for his own meals, including doing the dishes, the ground rules should be laid out in advance. In this situation, each person should also buy their own dish detergent and have their own location for food storage. However, if the group decides to share food expenses, extra steps such as group menu planning and shopping will be necessary.

Personal expenses include car or public transportation costs, clothing, entertainment, dining out, and travel.

Married and Domestic Partnership Couples

In many relationships, each partner’s income goes into one general account to pay all the household expenses. Sometimes, deciding how to share expenses can be tricky.

In some relationships, one person’s income can significantly outweigh the other. In order to provide an equitable share of the household expenses, the couple may decide to pay the bills based on a percentage of income. For instance, one partner brings home $4,000 each month while the other only brings home $2,500. The total household expenses each month are $2,500. The person who earns 60% of the combined income would pay 62% of his earnings toward the monthly household expenses.

Single Roommates and Sharing Household Expenses

Many young adults can’t wait to get their first apartment with their best friend(s). Before signing the lease, these friends need to determine exactly how the household expenses will be shared.

The most equitable method is for each roommate to pay an equal share of the household expenses. This seems easy on the surface but there can be a division. Perhaps one person in the household only surfs the Internet via his mobile phone. He pays for a data plan and has no computer to use the Internet connection in the apartment. The group could decide collectively that person would not be responsible for the monthly Internet bill.

Unique Situations and Shared Household Expenses

Unique situations call for unique arrangements regarding how to share expenses. Families renting out a room, couples sharing a home with a single friend, and single parents living with a platonic friend all require specific thought as to the sharing of expenses.

A household that has decided to rent out a spare bedroom should take into account exactly what areas the tenant will have access to. Can they use the laundry or kitchen facilities? Do they have their own bathroom? Will they share the cable and Internet connection? A single person sharing a home with a family of four should not be expected to split the household expenses evenly. A more equitable share would be based on square footage and permissions.

Sometimes a couple will share an apartment or house with a single friend. In this case, if everyone is working, and has access to all the residence has to offer, the most equitable arrangement would be a three-way division of the household expenses.

It often seems like a great idea for a single parent to invite a platonic friend to move in with the small family. This can create questions regarding the division of household expenses. To be fair, the single parent will always take more space in the household than the friend. A single mother with two children should carry the burden of three-fourths of the household expenses, while the friend pays one-fourth.

Sharing Household Expenses and Food

Food can be a tricky topic in shared households. If all the residents don’t eat in the same style, someone may feel as though they are carrying a burden for something they don’t eat. On the other hand, if each person is responsible for their own food, someone will inevitably eat something that doesn’t belong to them.

Menu planning for a group of eclectic tastes can be difficult. The best way to share this expense is a mixture of personal responsibilities and shared meals. A different person could be responsible for dinner one night per week. Another option is that food is a personal expense, but if someone would like to treat the others, no one would complain. Of course, if there is always one person in the group who doesn’t seem to “give back” in the meal department it can cause problems as well.

In any shared-living arrangement, the parties should take the time to draw up a list of each expense that will be shared and how much everyone is expected to pay. A simple verbal agreement of “we’ll split everything down the middle” might not be fair to everyone and could lead to fractured friendships or relationships.

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