Finances tend to be a source of tension in any relationship, but when done with a sense of plan, they can become a source of partnership and trust. There is no right way to divide finances for every couple because the best approach depends on your specific incomes, lifestyles, and plans. Here are five smart ways couples can split finances to maintain the budget.
5 Smart Ways Couples Can Split Finances
Are you and your partner still figuring out how to split finances and maintain a budget? Look no further! Here are five smart ways couple can effortlessly manage their money.
1. The 50/50 Split
This is the most straightforward method, where both partners contribute an equal amount to shared expenses like rent, groceries, and utilities. You each open a joint account. A set amount from each of your accounts is transferred to the joint account to cover all shared household bills.
2. The Proportional Split
This method is considered by many people as it is based on your respective incomes. The idea is that the person who earns more contributes a higher percentage of the total household expenses. First, calculate the total household expenses. Then, determine the percentage of the total income each partner earns.
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3. The ‘Everything In One Pot’ Method
This approach involves combining all your income into a single joint account from which all expenses, savings, and investments are paid. For this, all paychecks go into a joint account. You create a shared budget that covers everything, including personal spending money, long-term savings, and household bills.
4. The ‘One Person Pays the Bills’ Method
This method involves one partner being responsible for managing all the shared bills and expenses, while the other takes on other financial responsibilities or contributes a set amount. One partner's income is primarily used to cover all household bills. The other partner's income is then used for investments, savings, or major purchases.
5. The Hybrid Approach
This popular method blends independence with shared responsibility. You each maintain your accounts for personal expenses. You also set up a joint account for all shared bills and savings goals. This way is best for couples to maintain a balance.
Image credits: Freepik
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