It says that 39% of the surveyed cohabitating couples don’t split all costs in half. Then it says “What is possibly more concerning is 37% feel like their relationship is financially unequal.”
But that’s just a factual restatement of the earlier stat. Apparently there are 2% who believe they have some edge-case situation that makes up the gap.
It isn’t clear why this is “concerning”. It isn’t a claim that 37% of people think their financial split is unfair or inequitable.
The article goes on to quote/endorse experts recommending that people split by relative income. That seems like a bad idea, bound to cause conflict, especially because disposable income isn’t linear.
The way to handle that, whether in a romantic partnership or among friends on a trip or out to dinner, etc., seems simple and evident to me but for some reason I don’t see it mentioned much. Maybe I am missing something? Let me know why this is a bad method:
The person who had the lowest ceiling on what they are willing to pay — usually this is the person with the least ability to pay, but not always — sets the price. If there is only one other person, as with a romantic couple, the other person agrees to match that price, and they live that lifestyle together, or if the second person wants more then they are responsible for 100% of the additional cost unless the first person agrees to carry some of that in exchange for getting the better deal via the second person.
Imagine doing this by blind bid. So, you and your partner are planning a trip to New York. You are sort of frugal about hotels — you’d rather spend your money on Broadway shows and gifts for your family — but you do have some flexibility and you do enjoy luxury a little bit. It just isn’t worth as much to you as the market for hotels has set.
So you write on your bid paper:
I will pay $100/night all-in with fees and taxes for a hotel, and 20% of anything above $200/night (for the both of us), up to $150/night from me.
And maybe your partner writes:
I don’t want to stay in a mediocre hotel, so I want us to pay at least $400/night total (all-in), ($200 each if we split), and if you let me pick the room I like, I might go up to $500/night just from myself.
So what happens?
This means that your partner has asked for a $400 floor price. You suggested a $200 floor price. But you agreed that the extra $200 will be covered by you at 20%.
So you will pay $140 and your partner will pay $260.
You partner looks for rooms for $400 and finds some nice ones but prefers some that are even fancier.
Your max price is $150. You’ve got $10 of headroom that’s 20%, so that lets the price go to $450: $150 from you and $300 from your partner.
In other words, you wanted to split $200 and would pay 20% up to $50, so another $250, so you set a ceiling of $450 for the hotel room.
Maybe that is good enough.
Your partner may want more, since they had said they’d pay up to $500/night themselves, if they really liked the room.
That’s $200/night above their current contribution.
They find a really good deal on an awesome suite and it’s $600/night total.
You remain at $150. They raise their part from $300 to $450 (still below their $500 personal limit), and book the room.
It may very well be that despite the 1:3 ratio, your partner doesn’t make 3x what you do. It’s hard to have much disposable income for you because so many regular expenses eat up your income, and you’ve also decided to pay down your student loans at an accelerated rate. Indeed, you make $100k and your partner makes $200k, but still, for this particular trip, 1:3 seems the fair way to divide the hotel expense based on everyone’s preferences expressed as willingness to pay.
Or maybe you earn $100k and your partner earns $600k, but they don’t want to get a $700/night hotel room and pay $600 for it, nor do they think it’s fair to get a $350/night hotel room and pay $300 of it, when you could be happy and able to pay at least $100.
Using the bid method instead of a ratio formula: everyone is happy, no?