Welcome to Taking Stock, a space where we can take a deep breath and try to figure out what the current state of the economy really means for our finances. Every month, personal finance expert Paco de Leon will answer your most difficult, emotionally charged questions about money. These last two years have forced many of us to reprioritize our finances, and there’s no clear road map for getting through the pandemic yet — but Taking Stock is here to help us figure it out together.
This month, we're talking about how to split expenses as a couple: what it means to share financial responsibilities equitably and how to manage the feelings that inevitably arise from the process.
If you'd like to share your own experience with splitting expenses (good and bad), we'd love to hear from you.
My partner makes really good money, like over $200,000 per year. I also make good money, but I’m in a very different tax bracket — under six figures. I’ve always been really independent when it comes to living and my finances, but when we moved in together, my partner owned a house and didn’t want me paying rent, because I would be paying into their equity. I feel lucky, but also really uncomfortable with the arrangement. Outside of housing, we split bills based on income — they cover about two thirds of everything and I cover the rest, based on our take-home salaries.
Basically, with the way things are, it feels as though I’m indebted to them and should be constantly at their beck and call because they pay for so much. To be clear, they don’t expect that from me — at least that’s what they say. Still, I can’t help feeling that I owe them something and don’t know how to get out from under that.
Their family is also loaded — so loaded that they don’t generally acknowledge their privilege — which makes every money conversation we have really difficult. What’s the best way to have a conversation about money and privilege? Is there a way couples should generally split things? I don’t want to split things 50-50, because that’s beyond my means, but I’m uncomfortable paying as little as I currently do.
Living In A Rich Person’s World
Dear Living In A Rich Person’s World,
Plunging into the world of the moneyed can be disorienting. When you haven’t been accustomed to viewing everything through the lens of having and the risk of losing money, it can be odd to suddenly have this new perspective.
But before you talk about privilege and money with your partner or offer to take on additional expenses, let’s make some considerations.
Build some of your own equity
I can’t be 100 percent certain that I understand the reasons or motivations your partner has, in terms of not wanting you to pay rent because you’d be paying into their equity. However, I can imagine what they might be. During my time as an associate financial planner for high-net-worth folks, we gave our clients this kind of guidance and advice. A big reason is simply to keep things separate, so if you two break up, there is no question about whether or not you are owed any equity in your partner’s home. Since you never paid in, it’s a non-issue.
Regardless of your partner’s motivations, I want to encourage you to use whatever money you’d typically be paying towards rent and consider using that cash to build your own equity. I don’t have insight into your financial situation, and I cannot legally give you investment advice. However, using the cash you’d use towards rent to invest, assuming you can afford it, can be a game changer. Some of the most common ways to do this are through your retirement account, an additional investment account like a brokerage account, or even real estate or a small business. And if you don’t feel like you have enough cash on hand to start investing, start by building up a cash reserve.
By leveraging your available cash, you can grow your wealth. Increasing your overall net worth may give you back that sense of independence you feel slipping away. Even if you’re technically relying on your partner to pay for your housing costs, you’re still using the money you’d be paying toward rent to build equity in a different sense. The longer and more you save, the more substantial the amount of equity you’ll have built up. While the wealth you amass may never eclipse your partner’s family wealth, don’t underestimate how much a healthy net worth builds a sense of independence and confidence.
It might feel weird to think of this as an opportunity, but it is one perspective of your current situation. I’m not trying to plant any distrust between you and your partner. Instead, I’d like to encourage you to view your situation with your eyes wide open and through the lens of money. If this relationship doesn’t work out, put yourself in a position where you won’t be financially worse off. On the contrary, you can be in a financially better place.
Thinking about money and equity within the context of your relationship might be new, and it could be part of the reason why all of this feels weird or makes you uncomfortable.
Splitting expenses in proportion to income is normal
It’s entirely normal for couples with significant differences in income to split expenses proportionally, the way you and your partner are. I encourage you to maintain this split. But if you feel you’re still not paying your fair share, perhaps you can look at some of your shared expenses and offer to take on more.
For example, you could offer to pay for a utility like the internet or the entire grocery bill every other week. As you consider what expenses you’ll take on, what you choose to pay for should be based on what you can afford, what feels fair to you, and ultimately, what you and your partner agree on. So take the time to review your finances before making a decision so you don’t put yourself in a worse off financial position.
Unpack your feelings about privilege and money
Before you sit down to have a conversation with your partner about your feelings, take time to understand what you’re feeling and why.
Money is an emotionally charged topic. People value different things, and that conflict can create friction. These differences are not necessarily a bad thing. Having different opinions and viewpoints can lead to more constructive conversations that pave the way for progress and growth both personally and on a larger scale. I encourage you to share your feelings with your partner, but before you do, understand them yourself.
I can see where you’re coming from when you say you feel indebted to your partner. You’re benefiting from their privilege, and this is very likely creating an added layer of tension and inner conflict.
Privilege is a byproduct of inequality and you’ve become the beneficiary of it by way of your partner. This might make you feel implicated in participating in a system that, prior to your partner, you were a victim and not a beneficiary.
You might never be able to reconcile these feelings, and that’s fine; not everything can be reconciled. Sometimes, we simply have to learn to sit with the tension of two conflicting perspectives at the same time. You can be a good person who benefits from the privilege that you had nothing to do with. And while everyone deserves economic dignity or the ease and comfort of a life that comes with having wealth, the reality is that not everyone gets it.
While it’s important to acknowledge the role of privilege in our lives, I think it's equally important for you to unpack and work through your own feelings about it in your current relationship. And maybe you and your partner can even find ways to use your privilege to make a difference.
Also, consider that the conversation with your partner might not go as you’d like. They may struggle to understand your perspective and if they’re not ready or willing to confront their feelings about finances, you should prepare for that.
Ultimately, it’s essential to understand your feelings so that you won’t feel personally attacked by opposing attitudes, beliefs, or perspectives when you get into a conversation about your partner. Once you know your own and how you arrived at your conclusions, you understand yourself better, and hopefully, that translates to understanding your partner.
It might also be helpful to talk to a licensed therapist if you need help navigating your feelings.
Be on the same team
Talking about money and privilege with a partner can be challenging when there’s a significant difference between your incomes. Try to understand your partner’s perspective; hopefully, that empathy will be appreciated and returned. Approach the conversation with open, honest communication — and make sure your partner is open to the topic before you move forward.
When navigating love and money, the best approach is to try to be on the same team. Be open and find common ground. It’s essential to ensure both of you feel heard and that your feelings and concerns are taken seriously.
Orient your perspective so that you’re both playing on the same team. You may want to vocalize this intention to your partner. When you’re predominantly in a collaborative and not competitive mode of interaction, you’ll have an advantage in navigating prickly topics like love and money.
Your favorite finance friend,