Sharing expenses is no cakewalk, whether you’re sharing expenses with your roommates, your boyfriend or your parents (hey, some people live at home, it happens). Luckily, there’s a way to do it without losing your mind or engaging in monthly “You spent WHAT AT COSTCO?!” fights when you’re expected to cover half of the balance.
It all starts with the Money Talk.
Before we moved in together, my boyfriend and I had the money talk – several of them, actually. It should come as no surprise that, as someone willing to share her monthly expenses with the entire internet, it took almost zero time for me to be totally transparent with a partner.
Luckily, he went with it, and we’ve never had any big problems talking about money. That said, things can always change when you’re sharing a space, and one of the big things for us was the grocery situation.
Now, some bloggers have done a great job talking about how they share expenses with their significant others, like this post from Money After Graduation about their joint account set-up. The Boyfriend and I have opted for a slightly less involved system, and while it works perfectly for us, it could probably work equally as well for roommates who want to split costs – bonus!
Even without jumping into the shared-account thing, we decided that splitting our monthly grocery and “consumables” budget was a great plan as we started living together. Why would we each buy separate things, when we ate almost every meal together and did laundry together? Makes no sense.
We also had the silver bullet we needed to make it work: receipts.
I know, so high tech, right?
Trust me, it took a while for me to get used to accepting the receipt for every purchase that went into the “sharing” bucket. There were literally times that I would tell the cashier I didn’t need my receipt, and then immediately backtrack as I remembered that oh shit, I really do need it.
As a person who used to work in retail, I am properly ashamed of myself for the hassle.
At the end of every month, I tally up both of our receipts for qualifying purchases – mostly food and cleaning supplies, plus anything we thought fell into the “throw it in with the groceries” category – and divide it by two. Whoever paid less than that amount owes the difference to the other person.
This system is great because it’s so flexible. It can scale down to accommodate roommates who sometimes want to split cleaning supplies and the occasional Chinese food order, or scale up to accommodate more expenses if you just aren’t ready to open a joint account.
If you think this might be a good system for you, here’s what you should keep in mind going into it – and before you go any further, grab this handy spreadsheet to help you split your expenses with someone else. It’s got all the formulas done for you and everything!
Will you split everything 50/50?
With roommates, this might be a moot point, but if you’re dating someone, it’s worth talking through. Does it make more sense to split things 50/50, or do you want to take other things into consideration?
For example, if one of you makes a significant amount more than the other person, will that impact how much you each contribute to the total bill each month? Or maybe one of you prefers to eat exclusively caviar and gold flakes for breakfast. That person might contribute more to cover their (entirely absurd and probably not even that tasty?) food choices.
What will constitute a “grocery” or a “consumable”?
We tend to go with the flow on what constitutes a split-able expense. All of our weekly groceries are included, but any supplies for The Boyfriend’s home brewing or my baking are considered separate. We’ll toss in any cleaning supplies, and sometimes throw in the odd dinner out. That said, such a flexible system might not work for everyone.
If you think going with the flow could cause problems, make a list ahead of time as to which purchases each person can expect to split with the team, no questions asked. That avoids any “But I thought my breakfast caviar was COVERED!” issues. (I’m really married to this example, it turns out.)
Who manages the process?
Receipts kind of need management. They’re not the most easily-kept-track of things, and in a system like this, each person needs a way to keep track of their receipts that works for them.
Beyond that, I’ve found it works best to have one person in charge of keeping the process on track, i.e. gathering up all the receipts once a month, tracking down any strays and doing the final tally. Shockingly, as a personal finance blogger, I enjoy this process, so I take the lead on our grocery tally every month.
What oversight does the other person want – if any?
I’m lucky that The Boyfriend has total faith in both a) my mad calculator skills and b) my desire not to slowly steal $0.10 from him here and there. That said, every month when I walk up to him and announce what he owes me, I always offer him a look at the pile o’ receipts and the final calculations. Without fail, he couldn’t care less, and waves me away without ever looking at them.
Direct quotation from the Boyfriend,
“I have better things to do.”
That might not be the case in every situation, and even in our very trusting situation, I still think it’s important to check in and make sure everyone involved is comfortable with exactly how involved they are. Have this chat when you get started, but for maximum comfort, bring it up every so often just in case. You never know when someone might get suspicious that you’re playing a very long con and stealing tens of pennies a month from them.
You just never know.
How often do you “settle up”?
The reason we went with a monthly tally is that it’s uniquely suited to our situation. Not only do I rent from The Boyfriend, since he’s a fancy-pants homeowner and all, but I’m also the Head Grocery Shopper in the household. He takes care of so much of the home maintenance, since he owns the place, that this was a way I felt like I could really contribute to the household.
What this ends up meaning is that at the end of every month, I have spent the bulk of our $600-ish monthly grocery budget, and purchased the vast majority of our consumables. He usually ends up owing me a sizeable balance, and we just subtract that from the rent I owe him for the next month. It sounds complex when I write it out, but we’re in such a good groove that it works for us.
This is probably not a widely-applicable set up, so my best advice here is to take a look at what makes your situation unique, and work with it. How can you put together a system that is uniquely suited to making your life easier, while still keeping all the money stuff on track?
Just do that.
Actually, that’s a pretty good recap of how I feel about personal finance, so it bears repeating.
How can you put together a system that is uniquely suited to making your life easier, while still keeping all the money stuff on track? Just do that.
If that involves sharing your groceries, or your home, or your money with someone else, how did you manage it? Did you run into anything else you’d suggest for people who are just getting started, or thinking about it?