Beyond Money: How Ideologies Drive Household Expense Sharing Strategy
As a couple with comfortable salaries and social background, money was very rarely a challenging topic. But as my household was preparing for welcoming a child, unexpected brain-grilling discussions about money started pouring in and lead me through a rabbit hole of infinite opinions and ethical questions.
It made me question my educational beliefs so much that I went and ask friends an relatives about their household spending sharing strategies and beliefs, in order to extract general patterns that regularly occurs.
Let me walk you through some discoveries I’ve made during that time, and I’ll share some — hopefully — useful tips on how to choose your own strategy without resentment or bitterness from any party involved.
The Basics
For the examples, I’ll take 2 different dummy couples:
Alice and Bob, who have a similar income, but Bob has some capital that Alice do not have.
Lets say Alice earns 3200€ a month while Bob earns 2800€, and Bob owns a 100 000€ apartment.
Jane and Joe, who have a noticeable income difference, and no capital at all.
Lets say Jane earns 2000€ a month while Joe earns 4000€.
╔════════╦════════════╦══════════════╗
║ Person ║ Income ║ Capital ║
╠════════╬════════════╬══════════════╣
║ Alice ║ 3 200,00 € ║ 0,00 € ║
║ Bob ║ 2 800,00 € ║ 100 000,00 € ║
║ Jane ║ 2 000,00 € ║ 0,00 € ║
║ Joe ║ 4 000,00 € ║ 0,00 € ║
╚════════╩════════════╩══════════════╝Let’s say that both couple have 3500€ of fixed monthly expenses (rent, insurance, food, …).
After a first round of “interviews” with some friends that comes from a social background relatively similar to us (middle to lower-upper class), I could extract 2 general spending sharing strategies:
The “Absolute” Split Strategy
This strategy is relatively simple: the total expenses are split in half, each member paying 50% of it. For our examples, each member of the couple would spend 1500€ each to cover the expense.
╔════════╦════════════════╦════════════════════╦════════════════════════╦═══════════════════╦══════════════════════╗
║ Person ║ Monthly income ║ Amount on expenses ║ Percentage on expenses ║ Remaining revenue ║ Percentage remaining ║
╠════════╬════════════════╬════════════════════╬════════════════════════╬═══════════════════╬══════════════════════╣
║ Alice ║ €3 200 ║ €1 750 ║ 55% ║ €1 450 ║ 45% ║
║ Bob ║ €2 800 ║ €1 750 ║ 63% ║ €1 050 ║ 38% ║
║ Jane ║ €2 000 ║ €1 750 ║ 88% ║ €250 ║ 13% ║
║ Joe ║ €4 000 ║ €1 750 ║ 44% ║ €2 250 ║ 56% ║
╚════════╩════════════════╩════════════════════╩════════════════════════╩═══════════════════╩══════════════════════╝This strategy exposes the following key points:
- Each person contributes to the same absolute amount to the expenses
- Each person contributes a varying percentage of their income to the household expenses
- Each person have a varying percentage of their income left to spend or save as they want
The “Income-Based” Split Strategy
This strategy consists of applying proportionality to the expense sharing: each person will contribute to the expenses with the same ratio they contribute to the earning of the household.
As an example, Jane and Joe have a combined revenue of 6000€. Jane contribute to 1/3 of this revenue, while Joe contribute to 2/3 of it. So Jane would contribute to 1/3 of the expenses, while Joe will contribute to 2/3.
Here is the updated sheet for this strategy:
╔════════╦════════════════╦════════════════════╦════════════════════════╦═══════════════════╦══════════════════════╗
║ Person ║ Monthly income ║ Amount on expenses ║ Percentage on expenses ║ Remaining revenue ║ Percentage remaining ║
╠════════╬════════════════╬════════════════════╬════════════════════════╬═══════════════════╬══════════════════════╣
║ Alice ║ €3 200 ║ €1 867 ║ 58% ║ €1 333 ║ 42% ║
║ Bob ║ €2 800 ║ €1 633 ║ 58% ║ €1 167 ║ 42% ║
║ Jane ║ €2 000 ║ €1 167 ║ 58% ║ €833 ║ 42% ║
║ Joe ║ €4 000 ║ €2 333 ║ 58% ║ €1 667 ║ 42% ║
╚════════╩════════════════╩════════════════════╩════════════════════════╩═══════════════════╩══════════════════════╝This strategy exposes the following key points:
- Each person contributes different absolute amounts to the expenses
- Each person contributes the same percentage of their income to the household expenses
- Each person have the same percentage of their income left to spend or save as they want
The “Share-all” strategy
This strategy is actually the hardest to grasp, because when people explain it, they use very ideological or moral/ethical terms, such as “what’s mine is ours” or “we share everything”, but this do not explain what this practically means in terms of money flow from income to personal and joint spending. But it usually consists of multiple things:
- The household share a banking account where they put all their revenue
- The expenses are payed from this account
- The remaining money is shared between shared spending (holidays for instance) and personal spending of both members, often times in a really “intuitive” way: “we trust each other with our spending”
╔════════╦════════════════╦════════════════════╦════════════════════════╦═══════════════════╦══════════════════════╗
║ Person ║ Monthly income ║ Amount on expenses ║ Percentage on expenses ║ Remaining revenue ║ Percentage remaining ║
╠════════╬════════════════╬════════════════════╬════════════════════════╬═══════════════════╬══════════════════════╣
║ Alice ║ €3 200 ║ €1 950 ║ 61% ║ €1 250 ║ 39% ║
║ Bob ║ €2 800 ║ €1 550 ║ 55% ║ €1 250 ║ 45% ║
║ Jane ║ €2 000 ║ €750 ║ 38% ║ €1 250 ║ 63% ║
║ Joe ║ €4 000 ║ €2 750 ║ 69% ║ €1 250 ║ 31% ║
╚════════╩════════════════╩════════════════════╩════════════════════════╩═══════════════════╩══════════════════════╝This strategy exposes the following key points:
- Each person contributes different absolute amounts to the expenses
- Each person contributes to different percentages of their income to the household expenses
- Each person have the same absolute amount of their income left to spend or save as they want
This last point might be misleading, as it creates the illusion that all the money that remains will be split in two so that both members can spend it as they see fit.
In reality, couples usually spend this remaining money together on stuff the household needs, holidays, joint saving accounts, etc… Personal expenses are seldom discretionary, and there usually is a tacit rule to spend equally on goods.
Putting money aside for a personal saving account is usually frowned upon when I mention it to couples using this strategy.
The “mix-them-all” strategy
Some couples mix those strategy together depending on their beliefs and their income.
For instance, some couple implement the absolute split for rent, but income based strategy for remaining expenses such as leisure or food.
Other would keep some personal money on the side for contribution to a former household for instance, but share all of the remaining money with the new household.
How to explain the disparities in the strategies?
When people expose the reasons why they chose a specific strategy, it is almost every time the same reasons that arise: it’s either for “equality” or “fairness”, whatever that means.
My hypothesis is that this “equality” or “fairness” is an expression of underlying philosophical beliefs in the realm of work, merit, and their relationship to income.
Let me illustrate how I think some beliefs shape the way we consider an expense spending strategy:
Belief n°1: income is proportional to the effort (or merit) of work
People believing that income reflect the effort and merit one puts in their work will then consider that earning more or less money is a matter of personal “choice” (how much one invests in one’s career).
In that sense, the absolute split strategy seems the most “fair”. Indeed, one’s “decision” to earn less money should not impact how much the other member of the household contribute to the household. It expresses the sense of equality in the context of individual responsibility.
Belief n°2: income inequality does not depend solely on the effort or merit
For people having this belief, a lot of other factors such as chance and social background can impact one’s income. In that context, asking someone who earns way less to contribute more in proportion of their income to the expenses can feel “unfair”.
Indeed, if someone did not choose to earn less, they should not be “punished” by paying a bigger share of their income to the expenses (and thus having a smaller share of their income left). It expresses a need for distributive justice in the household.
This belief might lead the couple to choose
Belief n°3: everyone always contribute the same effort to the household
Some people consider that everyone contribute the same to the household, and that income is just one part of it. For instance, someone can work part-time and earn less but contribute more to child caring or housecleaning. The point can also be made that it’s because one member of the household decided to stay home more that the other could focus more on their career. Everything is a joint effort.
In that case, the share-all strategy could make the most sense, because whatever “actual” money one brings to the household, they contribute the same and thus should benefit the same from the household revenue. Thus, they should have equal right to the benefits of the household.
This strategy expresses the need for equality in the enjoyment of the household’s money that comes from the same investment in the community.
We could go even one step further in this equality in the enjoyment of the money by considering special needs of the members. If one member of the household for instance has medical condition that requires additional care, it could be taken into account and considered as a household expense, because they did not choose to suffer this condition.
In that way, it is an embodiment of the primary communist slogan “From each according to his ability, to each according to his needs” (adding also the pleasures on top of the needs). (https://en.wikipedia.org/wiki/From_each_according_to_his_ability,_to_each_according_to_his_needs)
Those are just some beliefs and philosophical stances I tried to shine a light on, but the choice of one strategy over another can be the result of a lot of different moral and justice stances, such as:
- Pragmatism vs Idealism: Ideally, everyone should contribute the exact same amount (absolute split), but in reality, the large differences in income make it impossible to do so without one feeling dispossessed.
- Utilitarianism vs Deontology: contributing proportionally (income-based split) maximizes the “happiness” of everyone involved, but goes against the intrinsically “moral” act of sharing the same absolute amount.
Some intriguing examples
I’ve selected two situations for which I feel like the sharing values of the couple are clearly expressed by keeping a strategy at whatever costs or on the contrary choose to change strategy to adapt to the situation (which is a philosophical direction as well, to consider the budget strategy dependent on the current situation of tyhe household).
One member goes on parental leave
Let’s imagine that Alice goes on parental leave and suspend her professional activity. She now earns only 400€ a month (parental leave allowance). Bob in the contrary focuses lots of energy on his career and now earns 4000€ a month.
If the household sticks with the 50/50 split, Alice is in trouble, because she does not have neer enough income to pay her share (1500€), let alone money to spend for herself. So this strategy goes out the window.
If the household sticks with the proportional rule, Alice is also in an uncomfortable situation:
╔════════╦════════════════╦════════════════════╦════════════════════════╦═══════════════════╦══════════════════════╗
║ Person ║ Monthly income ║ Amount on expenses ║ Percentage on expenses ║ Remaining revenue ║ Percentage remaining ║
╠════════╬════════════════╬════════════════════╬════════════════════════╬═══════════════════╬══════════════════════╣
║ Alice ║ €400 ║ €318 ║ 80% ║ €82 ║ 20% ║
║ Bob ║ €4 000 ║ €3 182 ║ 80% ║ €818 ║ 20% ║
╚════════╩════════════════╩════════════════════╩════════════════════════╩═══════════════════╩══════════════════════╝As you can see, she has only 82€ remaining for her personal spending or saving.
Potential solution: Bob can pay Alice a “salary” for the child caring job, and Alice would then re-share part of that salary to the household, and keep the rest for her.
But this comes some awkward moments such as deciding on how much Bob should pay Alice for the job (average salary for child care-taking ? an additional one because Alice is the mother thus more invested ? or on the opposite, less money because it’s more enjoyment with your own child, …).
This is usually the kind of event in a household life when a change of strategy is made, to move into a Share-all strategy, because it is far easier to setup for such income disparities but similar effort and investment in the household.
The Share-all strategy would lead to the following situation:
╔════════╦════════════════╦════════════════════╦════════════════════════╦═══════════════════╦══════════════════════╗
║ Person ║ Monthly income ║ Amount on expenses ║ Percentage on expenses ║ Remaining revenue ║ Percentage remaining ║
╠════════╬════════════════╬════════════════════╬════════════════════════╬═══════════════════╬══════════════════════╣
║ Alice ║ €400 ║ -€50 ║ -13% ║ €450 ║ 113% ║
║ Bob ║ €4 000 ║ €3 550 ║ 89% ║ €450 ║ 11% ║
╚════════╩════════════════╩════════════════════╩════════════════════════╩═══════════════════╩══════════════════════╝As you can see, and as prescribed by the strategy, Alice and Bob would end up with the same remaining money to spend, which is more money than Alice earns from her parental leave.
One member starts a business
Let’s imagine that Bob is bored of working 9 to 5 as an employee, and wants to start a business on an idea that he’s passionate on for a long time now.
Obviously, the business needs some building time before it potentially brings money home, so for the time being, Bob earns 400€ (minimal allowance or entrepreneurship incentives). Alice in the meantime got an increase an now earns 3500€.
Again, if the household sticks with the 50/50 split, Bob is in deep shit and cannot pay his share. The same with the proportional rule, which would leave Bob with close to no money for personal expenses.
And the option of Alice paying Bob a “salary” does not make sense here, as Bob is not working for the household.
Moving into a Share-all strategy of some sort is then mandatory. But the couple’s vision on the situation will impact how they run the strategy in the long term.
A note on the Share-all strategy
As mentioned earlier, the way I described the share-all strategy can be a little misleading, and not represent exactly the way couples implement it.
In reality, I’ve never seen a couple actually split the remaining money and move it to their personal accounts. Most of them consider this option would be a slide from the “share-all” mindset. But when I dig deeper into their beliefs, most of them do believe both of them should enjoy the remaining money equally, they just don’t want to split it.
The way the couple makes use of the remaining money after expenses is very diverse. Here are the three rough strategies I’ve stumbled upon while investigating those cases:
- Each member uses the remaining money for discretionary personal spending with a tacit rule that the spending should be roughly equal. Then they put everything left in a joint savings account (either for long term saving or for lets say holidays saving)
- Each member uses the remaining money for discretionary personal spending, and everything left goes back to the person financially contributing the most (let’s say the husband in case of a stay-at-home mom).
- Each member can use the money for discretionary personal spending, but there is a tacit rule that the person contributing the most should be able to spend more because they contribute more.
If you’ve been paying attention, you will notice that the last 2 strategies are actually breaking the “share-all” mentality, and are more income-based strategies in disguise.
In my opinion, the vision of the Share-all strategy is also to guarantee that whatever their income, both members have the same spending and saving opportunities. This can be critical when thinking about separation. With the share-all strategy,
A note on child care giving and house-making
In many cultures, child care and house-making are traditionally viewed as a woman’s responsibility. This perspective is supported by various statistics showing a significant number of women taking up these roles, often more than their male counterparts. While this arrangement can seem like a choice, societal pressures and expectations often subtly coerce women into these roles. These societal norms can lead to significant disparities in career progression and income for women.
For instance, it’s widely observed that income inequality often widens after childbirth, primarily affecting women. Additionally, women frequently find themselves in a position where their career growth is stunted, leading to long-term financial impacts.
Given this context, it seems crucial to address these disparities in a household expense sharing strategy, particularly post-childbirth. An equitable strategy should aim to mitigate the financial impact that child-rearing and house-making responsibilities have on women. By consciously acknowledging and compensating for these societal pressures, couples can work towards a more balanced financial dynamic. This approach not only supports fairness within the relationship but also acknowledges and begins to counteract the broader societal issue of gender-based income inequality.
Impact of Capital
In exploring how couples manage their finances, I discovered an intriguing aspect: the role of capital in shaping expense sharing strategies. Interestingly, in many cases, capital disparities between partners are not a primary concern in their everyday expense sharing.
However, when capital directly influences the couple’s expenses, as in the case where one partner owns a house that the couple lives in, it becomes a significant factor in determining how expenses are shared.
The handling of such situations varies widely among couples. I summed up 3 strategies here:
The Equity Exchange Strategy:
Commonly, the partner who doesn’t own the house might live there rent-free but take on full responsibility for certain household expenses, like utilities or maintenance. This approach seems to balance the benefit of free accommodation with an equitable financial contribution. However, not all couples follow this pattern.
Ownership Neutral Strategy:
The partners live there rent-free, and the situation do not alter their expense-sharing strategy, based on the belief that property ownership is often a matter of luck or inheritance, and should not benefit the owner within the relationship.
Tenancy Contribution Strategy:
Conversely, there are those who view the non-owner living in the property as a tenant of sorts, requiring them to pay rent. This rent then becomes a part of the couple’s overall expense sharing calculation.
As before, I feel like the choice of these different approaches often ties back to deeper philosophical beliefs about capital.
- If one views capital as a result of personal merit, it might seem logical that the partner with more capital (and thus more merit) should benefit from a smaller share of the expenses. This could be through rent from the partner or a reduced share in other household expenses.
- On the other hand, if capital is seen as largely a result of luck or external factors, it’s argued that it shouldn’t significantly impact how expenses are divided.
- In this view, it might even be deemed fair for the wealthier partner to shoulder a larger portion of the expenses, recognizing that their capital gives them more resources to contribute.
However, these discussions about merit and justice are just part of a broader conversation. Couples’ decisions on how to integrate capital into their expense sharing are also influenced by other core values, such as family dynamics, their definitions of love and partnership, and individual preferences. For instance, some people find the idea of paying rent to their partner deeply offensive, as it clashes with their view of what a committed partnership entails.
I think Capital disparities bring up so many questions and ellicit so many differences in values, mainly because Capital is very counter-intuitive when we think about money redistribution and community dynamics. This is because of 2 fundamental facts about Capital:
- We’re never certain about which proportion of capital is “deserved” by the owner. If it’s an inheritance, then it feel un-deserved, but still your family worked for it, so your “lineage” could be deserving of it. If it’s a capital that you build with your money, you can feel more deserving of it. But you never know the amount of luck that took part in this capital building.
- This capital can create revenue with little effort, making this additional income hard to weigh in in terms of household contribution.
Interesting parallel with taxes policies
Exploring the similarities and differences between how households and states manage finances offers fascinating insights. In this comparison, two key aspects emerge: the approach to income tax and the impact of capital on contributions.
Revenue Tax:
When it comes to revenue tax, there is a general societal acceptance, across various political ideologies, that people should contribute increasingly more to state taxes as their income rises. This progressive tax system is widely seen as a fair approach to redistributing wealth and funding public services.
However, within the dynamics of a couple, I’ve noticed that such an escalating share policy is rarely, if ever, implemented. Couples typically adopt either a fixed amount or a proportionate share method for splitting expenses, but do not increase the proportion with higher income.
Capital Impact
In state policies, it’s commonly understood that those with larger capital should contribute more to state expenses through taxes, focusing on wealth accumulated in property or investments. Surprisingly, in the context of couples, factoring in capital when dividing expenses is unusual; ownership of assets like real estate rarely influences day-to-day expense sharing.
This difference may have multiple reasons. One is that the state accounts for individual needs and disparities — like providing additional support to people with disabilities — which might lead couples to feel less need to adjust their financial contributions based on individual disparities. Another aspect is the philosophical difference between managing finances in a large group versus a couple. States often design policies acknowledging systemic constraints and aiming for redistributive justice, whereas couples emphasize individual responsibility and free will. In a couple, partners may feel they have more direct control over their finances, making them less inclined to adopt a progressively scaled or capital-influenced sharing model.
These observations suggest that the scale at which financial decisions are made (state vs. couple) significantly influences perceptions of fairness, responsibility, and individual choice, offering deeper insights into our financial decision-making processes.
Final Thoughts
Financial harmony in a relationship doesn’t happen by default; it’s cultivated through understanding, respect, and ongoing communication. By delving into the ideologies that drive your financial decisions and remaining open to each other’s perspectives, you lay the groundwork for a partnership that can weather financial complexities peacefully.
Remember, the most effective expense-sharing strategy is one that not only manages the household budget but also understands and respects the belief system of everyone.
