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Splitting bills can be stressful. Managing a household budget can be overwhelming and can cause money fights like you wouldn’t believe.
Dave Ramsey and Suze Orman have different opinions on how to split finances.
How Do Married Couples Handle Finances?
All couples are different, and I’ve seen so many different ways to share the responsibilities.
I’ve known stay at home moms who weren’t allowed to be a joint owner of the bank accounts because “they don’t work”.
The husband argued that since he was bringing in the income, he should be the one with sole access to the funds.
For obvious reasons, I’m not a fan of this plan. I feel that this is a form of financial abuse, but that’s a topic for another day.
I’ve seen married couples split finances and bills 50/50, keeping separate bank accounts so that they could be in control of their earnings.
And then there’s the question of whether or not you should combine finances when you’re dating or engaged (even if you’re living together).
I actually contributed to Rockstar Finance a couple of years ago in an article titled Should Married Couples Combine Finances.
In the post, I had to argue a case for married couples keeping separate finances. Sometimes it is best for married couples not to commingle funds. Here are a few reasons for separate finances:
- Gambling addiction
- Spending addiction
- One spouse hides money frequently
- Blended families (child support involved)
- Wealth – Married later in life
- Personal Banking Tips: How Many Accounts Do I Really Need?
- Debt Snowball vs Debt Avalanche
- Preparing for Divorce: How to Protect Yourself Financially
- Child Support Payment Schedule Tips for Divorced Parents
Splitting Bills With Your Boyfriend When Living Together
Dave Ramsey is adamantly against combining finances with someone who isn’t legally obligated to take care of you financially.
Throughout my banking career, I saw it too many times. Unmarried couples were living together and the girlfriend added her boyfriend to her checking and savings accounts so that they could pay the bills.
Later, when the two broke up, the boyfriend emptied out the accounts, leaving her with nothing.
This happens to men all the time, by the way. And when it happens, there is nothing you can do about it. As a legal owner of the accounts, both parties are able to withdraw available funds at any time.
Should Engaged Couples Combine Finances?
The short answer is No. When you open a joint account with rights of survivorship, the other party on the account is a full owner.
The funds aren’t split, 50/50. Each person on the account has access to 100% of the funds 100% of the time.
If you don’t end up getting married, you could end up with a broken heart and financially broke.
Suze Orman Bill Splitting
In an episode of the Suze Orman Show, Suze answered the question on how to split finances.
She said that splitting 50/50 would most likely lead to frustration and resentment (especially when one spouse earns significantly more than the other).
Her example featured a couple whose combined household income is $10,000. One spouse earns $7,000 per month, and the other earns $3,000.
In this case, she recommended bills and expenses be split 70/30. The spouse that earns 70% of the income should pay the lion’s share of the bills, while the other should have to pay 30%.
Suze Splits the Bills with her Partner KT
Interestingly, I found this interview with Suze last year where she shared that she and her partner, KT, split the finances.
They keep their finances completely separate and pay for their own cars but split the housing expenses.
KT is her brand manager, and Suze has requested KT to be paid separately.
From the article:
“Rather than me getting paid and KT getting a percentage of it, our contracts say, “You’re going to write separate checks directly to each of us.” So if KT and I ever break up, she still gets her percentage of the money from those deals, and she doesn’t have to worry about me saying, “Screw you.” She has her own money. That’s just how it is. When we buy something together, for the island or whatever, that’s where we combine money. If we’re buying something that’s four million dollars, KT will put in two and I’ll put in two.”the CUT
This contradicts her advice when one partner earns significantly more than the other but to each his own!
Dave Ramsey Recommends Shared Finances for Married Couples ONLY
Dave Ramsey has a completely different approach to shared finances.
As stated above, if you aren’t married, you should not be combining finances.
Dave Ramsey is well known for his 7 Baby Steps. It works the same for everyone including married, single, engaged, high-income earners, and those living paycheck to paycheck.
If you are in a relationship but not yet married, you should work the baby steps individually, starting with Baby Step 1 (or 0 if you’re getting caught up on late bills).
You can read more about the baby steps here.
Summary: How to Split Bills and Finances Fairly
In my opinion, only married couples should be dipping from the same financial pool of money.
Create a “Bill Account” that is where direct deposits go into and bills are paid out of through online bill pay and direct debit.
Decide what percentages make sense in your household, and create goals that you can work together to achieve.
Create a separate “Expense” account for fuel, groceries, fun money, etc. If you need to create two separate expense accounts: one for each spouse, this is fine, too!
You can budget for the bills and then transfer allocated amounts to the expense accounts (after saving, of course), taking the guesswork out of budgeting.
Personal finance is very personal. There is no “one size fits all” plan, so you (and your spouse) have to decide what works best for you.
I’ve done all the things! Girl, I’ve washed my face. I’ve trashed everything that doesn’t spark joy. I’ve walked the baby steps. I’ve cried. I’ve prayed, but my perfectionism has really held me back.
Perfection Hangover can be crippling. Stop comparing yourself to others and start living your best life! That’s why PH exists! I want to encourage you to take control of your money, your blog, and your business.
4 thoughts on “How Should Married Couples Split Finances?”
We’ll be married 26 years in July and we combined our finances right away and used a joint account for everything. Because my husband had better matching on his employer’s 401k and I started a business and had years of low income, his retirement account grew much larger than mine, but our joint investments are 50/50. Our decisions are also 50/50. It works b/c we both have similar temperaments about money, risk profile and goals. We have two daughters — I know I would want them to know how to manage money and not defer to a spouse, but it will be up to them how they actually set up the accounts.
I love that, Caroline! I think we have to do our best as parents to set a good example and educate our kids about finances, but it’s definitely up to them to take what they’ve learned and apply it.
When we married 42 years ago it was a lifetime contract. We’ve always had only joint accounts for everything except 401K’s and IRA’s, there is no legal way to make those joint accounts. Even when I got a major inheritance from my parents it went straight into a joint investment account because anything I get is hers as much as mine. If she ever got tired of me I want her to be able to leave with exactly the same amount as I have because we built our financial independence as a team and there never was any mine or hers, it was just ours. Its worked fine for 42 years, we are still waiting for our first money fight.
I love that, Steve! That’s the way it should be! The key phrase here is “when we married”. Sounds like y’all did it right! <3 Congratulations on 42 years together with no money fights! That's impressive!