# Explain to me the percentage method, please?

posted 4 years ago in Money
Post # 3
Member
9150 posts
Buzzing Beekeeper
• Wedding: November 2013 - St. Augustine Beach, FL

@LadyBlackheart:  Take your monthly salary and add it to his monthly salary.  Then take your monthly salary and divide by the total salary you both make each month.  This will give you the percentage of total monthly salary you make each month.

Ex: H makes 2000 per month; W makes 2500 per month

2000+2500=4500

2000 divided by 4500=44.4%

2500 divided by 4500=55.6%

Therefore, H would pay 44.4% of the monthly combined bills/expenses.  W would contribute 55.6% of the monthly combined bills/expenses.

Further example using same income as above:

Total monthly bills/expenses equals \$3000.

\$3000 x .444 = \$1332

\$3000 x .556 – \$1668

H would contribute \$1332 to bills/expenses.

W would contribute \$1668 to bills/expenses.

Post # 5
Member
9150 posts
Buzzing Beekeeper
• Wedding: November 2013 - St. Augustine Beach, FL

If you check out the percentage of personal income each person is contributing to pay for bills and household expenses, it would be 33.3% for W and 33.4% for H.  That’s much fairer than making each person responsible for 50% regarding of their income.  both parties end up with leftover money for personal bills/expenses and savings.

Post # 6
Member
9150 posts
Buzzing Beekeeper
• Wedding: November 2013 - St. Augustine Beach, FL

@Asia:  Thank you.  I was worried my math wouldn’t add up properly so I checked everything twice.

Post # 8
Member
9697 posts
Buzzing Beekeeper

@LadyBlackheart:  I personally feel that dividing things this formally and rigidly feels too much like a business arrangement. We just pay for what we feel like paying for depending on who has more money at that particular time. I make slightly more than FI now and my earning potential is also much higher. That doesn’t mean I will be paying for everything. Money is “our” money regardless of where it is kept or spent. I think you just need to find something that works for you, i.e. dividing bills by type, paying for entertainment, etc.

Post # 9
Member
2644 posts
Sugar bee
• Wedding: September 2012

Well the percentage method means that you each put in X% of your income towards shared bills (utilities, rent, groceries, etc.), Y% towards joint savings (wedding, home, vacation, etc.), and then Z% is left for each of you to spend or save how you see fit (spending money, personal bills such as car payments or student loans, personal savings).

You’d have to look at your bills and do some math to figure out what percentages are appropriate though.  If you each put in 50% of your income, will that cover all of the bills?  Do you want to save 10%, 15%, 20%?

Post # 10
Member
9956 posts
Buzzing Beekeeper
• Wedding: December 2012

The other Bees have described the Percentages method well…

If you both make the same amount of money the split is 50/50… if one makes 2x as much, then the split is 66/33

Still though, as an Older Bee (and someone who lived this way for over 20 Years) that there are issues… MAJOR ISSUES

I would NEVER use the Percentage Method again… it looks good on paper, but isn’t fair in reality

I learned that lesson the hard way !! (Divorce and \$ 100 K in debt, kind of way)

http://boards.weddingbee.com/topic/how-do-you-handle-everyday-finances-as-a-couple#axzz2bIQyHaFB

I am now much more a Joint Finances kind of gal… BUT a method where all the money is equally divided.

So that there is money for Expenses, Savings, and Spending Money… each partner receiving an equal share.

Couple Responsibilties, Couple Accountability, and Personal Freedom.

A Marriage is supposed to be a Partnership… NOT A BUSINESS DEAL.

Hope this helps,

Post # 11
Member
1159 posts
Bumble bee
• Wedding: May 2014

@LadyBlackheart:  We don’t use the percentage method, in fact I have never heard of it until now.  I agree with PP be aware of the unfairness that could be percieved.

We just put all of our money into the same bank account and pay our bills.  It is much easier, and we don’t have discussions on who paid for what or how much.  It would just IMO lead to arguements over nothing.

We do everything jointly.  I think to make things so precise is okay if both parties understand that fully.  But it is something I would never do.

Post # 12
Member
505 posts
Busy bee
• Wedding: March 2013 - Callanwolde Fine Arts Center

I feel that the percentage method works well when you live with your significant other prior to marriage. It helps keep the money separate in case you end up breaking up and neither party feels cheated because they are paying for everything.

After marriage, we put all of our money into joint accounts. I think this is a better option after marriage since you’re a unit and it helps change the conversation from my money and your money to our money.

Post # 13
Member
850 posts
Busy bee
• Wedding: June 2013

I’ve seen people run into problems with the percentage method when big expenses come up. It just leaves the door open for the person who pays more to feel like they “own” more, which can then turn into feeling like their opinion about how money should be spent matters more.

Then there’s the problem of the person who makes more, obviously has more spending money every month. Where does that money go? Ideally, it should go to savings, but if unexpected expenses come up, the person who makes more will be more likely to take care of those surprises, which could lead to further resentment.

Post # 14
Member
1810 posts
Buzzing bee
• Wedding: April 2011

You’ve gotten all kinds of responses on the percentage method but I just want to make a couple of comments.

You don’t necessarily have to have a joint checking account after marriage. It doesn’t make you more or less of a unit. If you and your boyfriend (or husband once you’re married) have different spending styles, for example, that could lead to more arguments than keeping separate accounts and using the percentage method.

My husband is a SPENDER and will spend until there is \$5 in his account (after bills and savings are paid). If we shared an account, that would stress me out beyond belief! I don’t like to let my account get that low, even if I have funds in savings.

Also, everything does not have to be percentage based. For example, your monthly bills and savings could be percentage based, but saving for a big purchase or vacation does not have to be percentage based. It can be a joint effort based on whoever has the money can save it.

And it’s all a negotiation. So if you start using a specific method with your boyfriend and it ends up creating resentment or not working as well as you had hoped, just tweak things until they work.

Post # 15
Member
1550 posts
Bumble bee
• Wedding: June 2013

rent+groceries+tv+internet+pets if you have any+electric= say 1600

Your income divided by joint income = percentage you make

So say you pring in 3k a month after taxes and he brings in only 1k.

you earn 75% of the total joint income so you pay 75% of the joint expenses.

1600 x .75 = 1200

remainder is what he pays – so 400 in this example.

Before DH and I were married we did this – he paid everything and then i wrote him a check when I got paid. (half each time). It worked great for us because we didn’t need to think about it. So we could both plan for our set expense each month. Electric bill varied so we just figured what the average was but if it was a good amount more consistently then we refigured the amount.

Post # 16
Member
5273 posts
Bee Keeper
• Wedding: October 2009

The breakdowns you have above are similar to what we did too.

I will say though, that my husband and I lived together for over 3 years prior to marriage, and until we broke down our expenses by percentage we always argued about money. For couples that are not married, I think this is the most fair way to share expenses, and in my own experience it worked out very well.