I’m a 28 year old secondary school teacher in Victoria where I earn $87,000. I’ve been renting with housemates for the last two years, and have just moved in with my partner. My partner works as an engineer, and earns $125,000. We both have some HECS debt, and she has $6,000 credit card debt on top of that. I don’t have any debts outside of HECS. I’m not sure how we should be splitting our expenses. My partner does earn more than me but also has more debt than I do. How should we go about this?

- Jordan

Firstly, Jordan congratulations on moving in with your partner.

It’s an exciting step to be taking and there’s no doubt an important money conversation - in fact multiple money conversations, to be had with one another to communicate your money expectations.

Combining households is a bit like trying to decide who controls the TV remote.

It’s tricky, but totally doable with the right conversations and mindset.

You’ve got a couple of factors at play here: different incomes, HECS debt, and your partner’s credit card situation.

But by communicating your financial values and goals with one another, you can find a way to work towards your shared financial goals, and your individual financial goals.

First off, how do you want to split the expenses? Here are a few approaches people use:

1. Merge it all

This means you treat both your invokes as one household income. It’s a “what’s mine is yours” approach. 

All your money goes into one account, and you pay for everything through it.

That includes your shares and individual expenses.

This requires both of you to be 100% on board with shared financial goals.

2. Split shared expenses 50/50

This is pretty straightforward—split all shared expenses down the middle and pay for personal stuff yourself. 

Easy to track, but it can feel lopsided when one partner earns more.

3. Splitting expenses by income 

This is the most common approach for couples with differences in their income like yourself. 

You split your expenses based on the portion of your income. 

So in your case, as your partner brings home almost 60% of the income, they contribute 60% to the shared household expenses - and you’d contribute 40%.

It’s all about fairness based on what each of you can comfortably contribute.

It keeps things balanced without anyone feeling like they’re over-stretching..

Setting goals to tackle debt

Choosing how to split expenses is only one part of the puzzle.

But Jordan, you and your partner have an added complication of the fact that she has a bad debt on the books.

It’s important to be supportive, but that doesn’t mean you have to adopt the debt yourself.

One thing that’s often overlooked when it comes to working through these sorts of tough questions with a partner is goal setting.

Yes, we know, it sounds daggy, but setting collective and individual financial goals together can be the difference between being financially healthy, and unhealthy in your relationship.

That means, you setting financial goals for yourself, your partner setting financial goals for themselves, and the two of you setting financial goals together.

For example, your partner's individual goal might be to repay the credit card debt.

You can then sit down and plan together how to tackle that debt. 

Perhaps you’ll refresh your budget, and allocate a certain amount per month to slowly repay the debt. 

Bottom line: there’s no right or wrong way to do things around here.

It’s about constant communication and checking in with each other on what feels fair and comfortable.

Finances, like relationships, aren’t one-size-fits-all.

You’ll figure it out together—just make sure you’re both steering the same ship!

All the best Jordan and don’t forget to celebrate those little financial wins along the way!

‍

Note: All information contained in the Flux app, www.flux.finance, www.joinflux.com, app.flux.finance and any podcast of Flux Media Pty Ltd (ABN 27 639 804 345) is for education and entertainment purposes only.

It is not intended as a substitute for professional financial, legal or tax advice. While we do our best to provide accurate information, we accept no responsibility for any inaccuracies that may be communicated.