Tuesday, September 27, 2011
How to deal with money in a relationship
This is where all money is put together to pay for everything in the household. There is no my money or their money, it is simply our money. Most people who do this also have a sanity allowances or splash cash that is theirs and theirs alone to do whatever they like with. The other partner has no say in how it is spent as it is not theirs.
This way often works for people who are looking at starting a family, especially if one partner is going to stay at home. Combining finances allows time to get used to the idea that the money is for the whole family.
The idea behind this is splitting the finances based on income and expenses. So if one person earns $35,000 and the other person earns $65,000 together their income is $100,000. To make things even the person earning $35,000 would pay for 35% of expenses and the person earning $65,000 would pay 65%. (Using after tax, take home pay to calculate it is fairer, as these 2 incomes are also in 2 different tax brackets).
This is where you maintain seperate finances and just split whatever needs paying 50/50 or each just pay for your own stuff. Something would have to be paid half each like rent, electricity etc... but other things such as certain food, going out, clothing etc... Would all be paid by yourself.
There is no right or wrong way to do your finances. It is simply a matter of finding what works best for you.