What to do when you make more than your partner

My husband and I have been together for almost a decade. And for the majority of that time, we've made the same amount of money.

When You Make the Same Amount, It's So Simple

When you make the same income as your partner, managing your money together is pretty simple. When we were dating, we kept everything separate and paid for ourselves. When we moved in together and then married, we split everything down the middle 50/50. That was it. Nothing to argue about. It was great.

Then we bought our first place together. If you want to learn more about our experience as new homeowners, make sure to check out my New Homeowner Diaries video series all about it.

It's been incredibly chaotic moving into a townhouse from a small apartment and figuring out the differences between being a renter and homeowner. Luckily, we've been in our place for just over 2 months now and things have calmed down quite a bit. So much in fact that we finally had time to sit down and have a good long money chat.

But Things Get More Complicated After a Big Life Change

I'll write a post soon about what the big financial differences are between owning a home compared to continuing renting, but for this post I wanted to focus on adjusting your budget after a big life change.

Buying our first place was a major life change. I'd say marriage was the only thing that could top it. But similar to marriage, we didn't realize how big of an impact it would make on our lives.

It's funny, I still remember people asking me after my wedding if anything felt different. Right after the wedding, definitely not. But 3 years after the wedding, oh heck yes! Everything changed. We started thinking of each other as family. We started making longer term plans together. And overall, we just felt more committed to each other.

The same goes for us becoming new homeowners. Honestly, we just thought that buying a place would mean having more space and finally getting into the property game. Oh how naive we were.

Buying a place has really made us look at our budget and income streams. There's no denying that owning a home, and being on the hook when things break or die, is expensive. We've also got more bills to pay than we had as a renters, and basically our cost of living has close to doubled.

Being Equal Doesn't Have to Mean 50/50

The thing is, my husband's income hasn't doubled in the past year. But for me, since I rebranded back in January, my income has increased significantly. I still have my day job, but so far I've also made 5 figures off my personal brand. I may reveal some hard numbers before the start of the new year, but if you've been a long time reader, you know I've never done income reports (I do like a bit of privacy after all).

With all that to consider, I told my husband that I didn't want to do 50/50 anymore. It wasn't fair that he had to spend a larger percentage of his income on living expenses than I did. I just knew that if something didn't change soon, we would end up arguing about money, and that's something that we've never done before. Sure, we talk about money all the time, but it's always been a big priority for us to never fight about it.

At first, he wasn't really on board. And I get why. This would mean we weren't on the same level anymore and we'd both be acknowledging that I made more. I'll be honest, it was a hard and awkward conversation. I certainly didn't want to hurt his feelings, but I knew in the long run it made the most sense.

Here's How to Find Out How Much Each of You Should Contribute to Joint Expenses

Have any of you ever watched The Joy Luck Club? I remember watching it years ago, and a scene that has always stuck in my mind was the one where Lena explains how her and her husband manage their money. They do everything 50/50 so their love is always equal. I actually found the film (not the best quality) onYouTube, and the scene I'm talking about starts at the 51:20 mark. Their 50/50 system of course causes a lot of resentment down the road because her husband makes 7x what she makes.

I never wanted to be like that couple. Being equal shouldn't mean just 50/50. It should mean looking at your joint expenses, looking at your individual incomes, then figuring out what percentage each person should contribute. Here's the formula we used with some example numbers.

Partner #1 yearly income = $50,000

Partner #2 yearly income = $75,000

Total yearly income = $125,000

$50,000 / $125,000 = 40%

$75,000 / $125,000 = 60%

And that's it. Just look at how much you both make and combine those numbers to find the total. Then divide your individual incomes with the total to find out the percentage each of you should contribute to joint expenses. It's what we now do, and I'm happy to report it's working out really well!

The post What to Do When You Make More than Your Partner appeared first on Jessica Moorhouse.

RELATED: 11 things we spend way too much money on

11 things we spend way too much money on
See Gallery
11 things we spend way too much money on

1. Funerals

Sign up for the free Money Talks Newsletter

According to the National Funeral Directors Association, the average cost of a funeral with viewing and burial was $7,181 in 2014, the last year for which statistics are available. With a vault (which is typically required by a cemetery) the median cost was $8,508. The cost does not take into account cemetery plot, monument or marker costs or miscellaneous cash-advance charges, such as for flowers or an obituary. That's a lot of cash.

The worst time to shop for a funeral is after a loved one dies, when grief can affect judgment. The single best way to avoid unnecessary costs is to be clear on your funeral wishes — or better still, make arrangements for your funeral — well in advance so your loved ones don't have to worry (which tends to lead to overspending). Either way, the costs can be far less than that average if you follow some tips:

  • Know your rights as a consumer: The Federal Trade Commission regulates "funeral providers" under The FTC Funeral Rule. The requirements mandate that funeral homes provide a list of prices, and that customers are not required to buy all funeral-related products from the home that is coordinating the funeral.
  • Shop around. Because the law allows you to BYOC (bring your own casket), shop around. Where? Try Costco. While the NFDA says a casket averages $2,395, you can get a casket from Costco for $950 — delivery to the funeral home included. But there are many other discount options online.
  • Get cremated. In 2015, 49 percent of deceased were cremated in the United States, compared with 45 percent who received traditional burials. (The other 6 percent were not accounted for.) That's up from a cremation rate of under 10 percent in 1980. The NFDA puts the average cost of a funeral with viewing and cremation at just over $6,000. But in reality, opting for cremation makes it possible to avoid many costs — including embalming, viewing and burial — as Everplans, an online service that helps people make estate and end-of-life arrangements, explains here. Moreover, the site points out, cremation makes it easy to hold the memorial at a later date, in a way that is affordable and convenient for family to come together.

For more, check out: "How to Manage the Cost of a Funeral." 

Photo credit: Getty

2. Weddings

It's madness: The average American wedding cost $31,213 in 2014, according to a survey by wedding website The Knot.

Sign up for the free Money Talks Newsletter

Many people set out to be frugal, but fail once the planning gets underway — and the wedding industry gets its tentacles into them. So the first and single most important step to preventing overspending is to stop and think: What will make the occasion fun, memorable and meaningful for you and your guests — versus what is just a costly tradition or expectation? Then have a conversation about where you could better spend the thousands of dollars you save. Travel? Downpayment on a house? Or — if you're a parent who is ponying up the wedding costs for the couple — retirement? Setting aside the option of eloping, there are any number of ways to save:

  • Buy a second-hand wedding dress: Go to sites like Preownedweddingdresses,com to see the vast array of hardly worn finery.
  • Limit the floral arrangements: Flowers are nice, but they can run up a huge bill, and then they die.
  • Trim the guest list: Remember, the costs of food, decorations, drinks, table arrangements goes up as you add guests. So keep the wedding numbers down. You can always throw a huge barbecue for everyone you know later.
  • DIY DJ: The Knot survey says a reception band will cost about $3,000, while a disc jockey will run almost $1,000. You can simply program your favorite music on an iPods and then hire someone (or even asking a friend) to push the right buttons at the right time. Search online for "DJing your wedding," and you'll find all kinds of detailed advice.
  • Cut the cake. Specialty cakes can run into the hundreds of dollars. But really, how many weddings have you been to where everyone raved about the cake? Skip the specialty baker and buy your cake from your local grocery chain.

Want more ideas? Check out: "15 Ways to Save on Your Dream Wedding." 

Photo credit: Getty

3. Diamond rings

You'll notice we didn't mention engagement and wedding rings in the Weddings section. That's because jewelry is an overspending category unto itself — and diamonds may be the most marked-up item on this list. But like funerals and weddings, buying diamonds is fraught with danger because it's yet another emotional purchase. If we try too hard to save money, we feel like we're being cheap.

But here's a secret: Diamond prices are often negotiable, even at major chains like Zales and Kay Jewelers. So while it's important to know the four C's of diamonds — carat, color, clarity and cut — the biggest lesson you can learn is to haggle. If your local jeweler or national retailer won't come down on price, they'll often be willing to upgrade the setting for a discount or even free.

By the way, there are no wedding police: You could decide to get an opal, a ruby — or an agate — in your engagement ring. But if you go with expensive, first read: "8 Tips to Tackle the Terrifying Task of Buying Jewelry for Your Love." 

Photo credit: Getty

4. New cars

Money Talks News founder Stacy Johnson lives in a beautiful house on the water, and there's a 30-foot boat docked out back. But he's never, ever bought a new car. This is what he says:

When it comes to buying cars, the vast majority of people I've known over the years approach the subject with no imagination at all. They simply do what the commercials tell them to and what their friends do: trudge down to the nearest dealer and buy a new car.

Instead, he's bought used cars for as little as $5,000. How? He avoids car lots. "A few years ago I bought a 1994 Cadillac Fleetwood Brougham from a 91-year-old lady," he recalls. He suggests asking around — friends of friends seem to value a fair price and honesty. He also consults websites like Kelley Blue Book or Edmunds to establish a value. And finally, he gets the car inspected by a local mechanic. It might cost $50, but it can "save a ton of headaches and bills down the road," he says.

But if you're dead-set on a new car, consider more than the price. Also take into account resale value, fuel efficiency, repair record and the cost of insurance. 

Photo credit: Getty

5. Food

Sign up for the free Money Talks Newsletter

So you don't cook much or well, and you don't have the time or space to grow your own fruits and vegetables. You can still save money on food. Here are three quick and easy suggestions:

  • Eat smart when eating out. Of course, the unhealthiest food is often the cheapest. So if you're both healthy and price-conscious, skip the soup and salad — they're not only expensive for what you get, they're not nearly as good for you as you think.
  • Buy smart when eating in. If you don't like to cook, at least make meals with healthy ingredients that are easy to handle. Here are 11 ideas, from beans to brown rice to frozen whole turkey.
  • Don't be bored/scared of cooking. You can save big and still eat well. If you can read, you can cook.

Photo credit: Getty

6. Clothes

Kanye West made headlines a few years ago, not for releasing a new album, but also for selling his own clothing line that featured a $120 white T-shirt. Guess what? He sold a lot of them. The fact is that we've all overpaid for clothes because we liked the label. So there's a good starting point for saving on clothes: Don't buy brands, unless you're absolutely certain you're getting the quality you're paying for. For more, check out: "10 Tips for Saving on Clothes." 

Photo credit: Getty

7. Private school

Of all the items on this list, none is harder for scoring a deal than private schools for your K-12 kids. First, you need to find one close to home. Then you need to figure out the best way to compare prices and services. Finally, you want to pursue financial aid. Here are three good places to start:

  • The National Association of Independent Schools. It represents 1,700 institutions nationwide — including religious and boarding schools — and it has a Parents' Guide with tips for everything from visiting the school to landing financial aid.
  • PrivateSchools.com. This website is about financial aid, plus details on scholarships, loans and vouchers. It also has a search function for nearly 30,000 schools.
  • Time magazine and The Week. In 2007, Time published a controversial story about a study that disputed whether private schools are really any better than pubic schools. In 2013, The Week did the same. Read them before you decide to spend thousands a year in tuition for something you can get free. 

Photo credit: Getty

8. College

While experts offer all kinds of conflicting college advice, they seem to agree on one thing: Spending more than you can afford to attend a big-name school isn't smart. Like buying clothes, you need to look beyond the pricey labels. Start by checking out the U.S. Department of Education's College Affordability and Transparency Center and the College Scorecard, tools introduced by President Barack Obama in 2015. 

Photo credit: Getty

9. Workout gear

Sign up for the free Money Talks Newsletter

You can easily spend $100 on a pair of name-brand leggings to wear at the gym. And it's possible that the hype is correct — they make your butt look cute. But you could instead buy a very similar pair of leggings at Ross Dress for Less, Kohl's or other discount clothing stores for a fraction of the price. (I just got a very nice pair for ten bucks at the discount Grocery Outlet in my neighborhood.) And, really, at the end of the day, it's the workout that will make your butt look cute. You won't need a pair of overpriced pants to do that. 

Photo credit: Getty

10. Insurance and warranties

We've all heard the expression "Better safe than sorry." But you can spend a lot of money insuring yourself against any possibility, and insurers prey on fear. But many things that can go wrong can be fixed for less than the premiums. For example, cellphone insurance: There are often cheaper alternatives.

The same goes for extended warranties. Consumer Reports has always been skeptical of them, pointing out that your credit card may already provide an extended warranty.

For more, read: "7 Forms of Insurance That Are a Waste of Money." 

Photo credit: Getty

11. Credit cards

Sign up for the free Money Talks Newsletter

This item has the potential to rack up big savings with just a few minutes of your time. But too many of us sign up for a few credit cards and never look back, paying high interest on a balance or a large annual fee. Or we cut them up because we think those pieces of plastic got us mired in debt.

But credit cards, wisely used, can help you claw your way out of debt. Reward points are like free money, and balance transfer offers can reduce your interest rate to zero for many months. The problem is finding the right card. A good place to start comparing rates and benefits is the Credit Card section of our Solutions Center.

Have you overspent in one of these areas because tradition or emotion or other people's expectations got the best of you? Share your experiences on our Facebook page or in our cool new Forums

Photo credit: Getty


More from Jessica Moorhouse
10 Questions You Need to Answer Before Getting a Mortgage
Why My Husband and I Don't Combine Our Finances
How I Conquered My Fear of Talking to People at FinCon 2016

Read Full Story