Couple finance – who pays how much for what?

Money is one of the top three reasons for divorce.

Everything is easier if both partners/spouses share similar values or believes in money. For example, both like to save money. If one likes to spend while the other like to save, it is going to cause conflict. In this situation, the couple can reach an agreement on how much each contribute to the common expenses. They can then keep the savings to their own individual account and have the freedom on how to spend it.

Some experts suggest the contribution base on a ratio of income rather than evenly split it. It does make more sense. Here is how it works. If spouse A’s take-home pay is $50K while the spouse B’s is $100K. Then A’s net income is one third of the total household income. Therefore, spouse A should contribute to one third of the common expenses.

Let’s talk about the details of common expenses. What should it include? Of course, grocery, utility, etc. The big part is mortgage and savings towards retirement.  

Mortgage is a bit complicated. Some people bought the property before the marriage and intend to own it by themselves. They do not want their partner to share the mortgage. Instead, they prefer their partner to pay rent. However, some do not want to pay rent because they think that is wasting money. They prefer to own a property and pay for the mortgage. Now, this is a conflict but there is always a solution. One can pay half of the equity of the property to the other spouse and add his/her name to the deed.  If one doesn’t have money, then he or she can pay higher percentage of the mortgage. If one has or makes enough money, solution always comes easier.  

When it comes to retirement, that is common expenses in the future. Some got employer pensions, but some don’t. It also complicates the issue. Talk to a financial planner to find out how much is needed for retirement for both and how much should be saved for retirement besides all the other resources such as company pensions. The person who doesn’t have employer pensions is supposed to contribute more to the savings for retirement. He or she has to do that if he is not married anyway. That’s fair.

In the end, it takes careful planning, open and honest communications, and kindness to maintain financial well-being in a marriage.