How to split a budget
When you live together, but are not married, it is not advisable to combine finances, because you do not have the same rights as in the case of a registered marriage. Based on this, you need to determine and share a budget for total expenses with a guy or a girl.
Before the wedding, keep most of your funds separate to protect personal finances when breaking up. None of you will be able to get the protection that the law gives when you divorce, so you should provide it yourself.
Here are some tips for negotiating with a partner and sharing your budget when cohabiting..
1. Identify the expenses you share
Determine the costs for which your couple is responsible jointly. As a rule, this is rent if the housing is rented, utilities, repairs, joint entertainment, travel, food and general hygiene products. If you have pets, discuss the costs of caring for them. Although, a decision is possible on the principle of “whose cat, pay”.
As a couple, you need to sit down together, discuss the budget and come to an understanding about why, in what volume and at what frequency you need to pay in order to support the household. It is highly advisable to create an emergency fund – an amount that will help to cope with unforeseen expenses..
If you have children, but you are not married, include all the costs of caring for them in your home budget: education, food, medical care, clothing and other expenses.
It is not recommended to make expensive and large acquisitions in a civil marriage. Buying a home or a car before the wedding will greatly complicate the possible separation.
2. Determine the contribution amount for each
Some will say that each of the couple should contribute 50% of the total amount of the household budget, since this is right for two people living together. In fact, this is not the best planning option..
Often one person earns more than the other, and 50% becomes an unfair share for a partner who earns less. This may be too substantial a sum for him..
So that the contributions are proportional to income, calculate exactly what proportion of each person’s earnings will be objective. This is done by searching for a common coefficient. It is found by dividing the budget amount by the total income of the couple.
Example
Monthly budget = 40,000 rubles. Monthly income of partners: 80,000 rubles and 50,000 rubles. The coefficient will be: 40/130? 0.3. You can translate it into a percentage – 30%. It turns out that everyone should allocate 30% of earnings to cover monthly expenses: 24,000 and 15,000 rubles, respectively.
3. Set up a separate current account for household expenses.
To maintain and cover household expenses, a couple needs a separate current account. Each of the partners must have access to it, and the date on which both deposit their part of the money there is clearly negotiated.
All payment transactions related to the household, carry out only through this account. He will protect your personal money if the partner makes a bad financial decision, and also facilitate the division of property, if in the future you part.
Securing all the joint expenses with this account will not allow you or your boyfriend (girlfriend) to use a credit card or personal savings to pay for common household needs. For greater efficiency, it is better to even open an account with another bank, rather than the one that serves personal accounts.
4. Identify the expenses for which you are personally responsible.
It is important that both partners make external expenses without affecting the total bill..
You personally need to be responsible for paying for fuel, service and insurance of your own car. Clothing, hygiene products, services of beauty salons and hairdressers – all this also applies to personal, not shared expenses. The same applies to hobbies and going to a restaurant with friends, colleagues or someone else who is not your soul mate.
In addition, it remains a personal responsibility to secure your retirement account, pay off your debts in your name, maintain a credit card limit, pay for your personal medical and other insurance.
Do not forget that every financially stable person needs a personal money fund for emergency spending. It is desirable that it be equal to the amount of personal expenses for 6 months, including part for the general home financial plan.
Analyze your budget to make sure it meets your requirements for the amount of expenses and savings that you save for the future. Follow the usual budgeting rules..
Once every six months or a year, analyze and recalculate to understand that you are working to achieve financial goals in the right direction.
This approach will allow everyone to split the budget correctly and focus on their own financial weaknesses, rather than thinking about how well your partner spends money.
Similar articles
- Passive expense – 9 things that lose value after purchase.
Reselling old things that you no longer use can be a good source of small extra money. In fact, you are strong…
- Money secrets that successful people won’t tell you
Are you tired of the work you swore to quit countless times? Stuck in a routine and started to envy the big accounts of successful people? maybe,…
- 6 skills to help you become financially successful
Any person, regardless of age and other factors, can teach themselves the skills and traits that will make them financially successful. For…
Can you please elaborate on the expenses you’re referring to that are shared? Are you asking about expenses shared between individuals, such as housemates or family members? Or are you referring to shared expenses in a business or organization? It would be helpful to have more context so that I can provide a more specific answer.
The term “expenses shared” can refer to both personal and professional settings. In personal life, it often pertains to costs divided among individuals, like rent and utilities between housemates or family members. In a business or organization, shared expenses are those incurred collectively towards common objectives, like office supplies or marketing expenses. Without more context, it is challenging to offer a precise explanation.
Shared expenses can refer to costs that are split between individuals, like rent, utilities, groceries, or transportation. It can also apply to businesses or organizations where costs are divided among stakeholders for things like supplies, services, or overhead. Understanding the details of the shared expenses in question will help clarify the specific situation and determine how they are managed and accounted for. Feel free to provide more context so that I can offer a more tailored response.