The Household Spending Plan

Couples get into a lot of trouble when they lose sight of what belongs to whom, and how -- or whether -- to account to each other for it.

Basically, there are three different sets of expenses: yours, his and the house's. Household expenses are those the two of you have in common, the ones (unlike your haircuts or his greens fees) that benefit both of you.

How do you find a fair way to apportion those expenses? Fifty/fifty, you might say immediately, and many couples do it that way. But for many that may not be reasonable.

This is where Jerry Mundis' books have been eye openers for me. No matter how much you'd like to think you are, the two of you are not the same. You do not necessarily earn the same income or have the same responsibilities. One of you may have children, one may not. One may be in a profession where the earning potential is limitless. One may be in teaching.

To create a plan with integrity and fairness, one that takes both of you into account as individuals, that respects both of you, you need to acknowledge any legitimate discrepancies between your incomes.

"A legitimate discrepancy is one that results from the realities of life rather than from underearning -- yours, your partner's or both," Mundis writes. If you out-earn him 4 to 1 (or more), you may need to take on more of the household expense -- maybe even 80 percent to his 20. (The reverse, of course, is also true.)

Mundis also suggests assigning a dollar value to household work and figuring it into the equation. This is where it may get juicy for some of us. List everything each of you does around the house. It's important to recognize that your time is as valuable as anyone else's, no matter how much each of you might be able to command for it by the hour out in the workplace.

If the two of you decide not to work equal numbers of household hours, you'll need to calculate the financial value of those hours so that the one who's doing more can be compensated.

You can get a good idea of what they're worth by looking at want ads in your newspaper to see what kinds of wages are being paid for these services.

If you're doing more of the housework, here's where you may finally get to feel valued for it. Mundis gives the example of a couple whose household expenses are $2,000 a month. They apportion their expenses equally, at $1,000 for each. Each owes a total of 83.8 hours of household tasks per month, but Kelly does $645 of Peter's work as well as her own. This means Peter contributes $1,645 in actual cash toward the month's expenses, and Kelly contributes $355.

The beauty of this arrangement (besides the fact that it acknowledges the monetary value of managing a household) is that if one person refuses to do any of the tasks, he or she can either contribute the appropriately larger share of cash toward the household fund or hire someone to do the work.

Mundis calls this approach of having two personal spending plans and a household spending plan the "rule of three" and says it makes for greater peace and happiness in relationships. The arrangement makes it clear what money the household needs and what is left over for personal expenses. "It provides both partners with a sense of privacy and independence, and it helps an underearner gain a more accurate vision of his or her real circumstances," he says.

The last is something some of us may not want to look at, but believe me, it's there, playing out in the relationship. Going through the process of creating the household spending plan ought to put you on better footing with each other.

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