Proportional Budgeting for Couples

For many couples finding a fair way to split the bills is a major concern. What makes it hard is that it is common for incomes to vary greatly between a couple as different industries, experience, and negotiation skills can create a huge gap. Going 50/50 on bills can be a financial burden on one person. One solution that has worked well for many is proportional budgeting.

What is Proportional Budgeting? 

Basically proportional budgeting is taking one’s income relative to the total and allocating expenses accordingly. Let me show you an example.

Family Income

Let’s say we have a two income family, one is a teacher and working part-time while finishing up a degree. Their take home income may look like this:

  • Person 1: $2500/month
  • Person 2: $1400/month
  • Total Income:  $3900

When they tally up their bills the total comes out to $3100/month. Looking at their income relative to the total we see that:

  • Person 1 brings in 64% of the income.
  • Person 2 brings in 36% of the income.

That means for the joint account, Person 1 deposits $2496 and Person 2 contributes $604. If they had split the bills 50/50, then Person 2 would have nothing leftover each month.

Proportional Budgeting with Our Finances

We feel like proportional deposits are a more fair way to handle the bills for us personally. We’re currently using proportional budgeting to determine how much each of us puts into the joint accounts. It’s been adjusted a bit as our finances have changed.  Originally the deposits were based on the ratio of our income to the family’s total income and were both deposited into joint checking. The rest was used to pay for gasoline and eating out.

We’ve now modified it that my husband’s portion goes towards the joint checking for necessary bills and my portion goes towards paying debts, savings, and investing.

Thoughts on Proportional Budgeting

I’m curious to see how you handle your finances. Do you split the bills or do you use proportional budget?


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