How to split expenses with your partner – Tips to avoid debt and troubles

how to split expenses with partner

Who should pay the bills in a marriage? You or your spouse or both? Have a talk with your spouse on this subject before you say ‘I do’.

Statistics say that happy couples are the ones who keep money separate and split their expenses fairly. It helps to avoid power struggle and control issues in a marriage. When both the partners have separate accounts, they can spend according to their wish and share the joint expenses happily.

How to split expenses with your partner

Both money and relationships are sensitive issues. You have to handle them carefully. You have to split expenses with your partner rationally. But how to do it? How should you split finances when you earn $30000 annually and your partner earns $300000? Let’s find out.

1. Split bills based on your income: If both of you really want to share expenses, split them on the basis of a specific percentage of your income. For instance, you may decide to contribute 30% of your income towards family expenses.

If you earn more than your spouse, then contribute more towards household expenses than your lower-earning partner.

2. Use splitting bills calculators: These calculators help to split bills as per your income so that each partner pays as per his/her income.

You can get splitting bills calculator online. Just the enter the following details and find out how much each one of you has to pay:

(i) How much you earn
(ii) How much your partner earns
(iii) How much is your total household expenses

3. Decide who will pay what: Sit with your partner and divide the bills amongst yourselves. Suppose, you decide to take care of mortgage and auto insurance. Your spouse can pay the grocery and utility bills. If you’re earning more than your spouse, then select the expensive bills for yourself. This way no one will feel financially burdened.

Be honest and transparent when you’re sharing expenses in a relationship. There is a strong reason behind this. Suppose you’re paying the mortgage and your spouse is paying utility bills. But both of you are not transparent about it. Maybe your spouse can’t cover the bills but she remains silent until the final shut-off notice arrives from the electric company. Now, this may lead to fights, misunderstanding, and ego clashes later.

4. Pay a salary to your spouse: If you’re working and your partner is a full-time parent, then you can pay a salary to her. Don’t get shocked. Just think in this way. Wouldn’t you have paid money for the daycare or the babysitter if both of you were working? Your partner has sacrificed her career to take care of the family. But even she needs to feel happy and satisfied. Isn’t it?

5. Give a bonus: Who doesn’t like to get a bonus or an incentive? Everyone does.

Give a bonus who manages family expenses like a pro. Allocate a specific responsibility to each one of you. For instance, your responsibility is to earn as much as you can for your family. Your partner’s responsibility will be to cut expenses wherever she can. Ask your partner to calculate how much she has saved in the month and give a bonus based on the amount.


Money management plays a big role in a marriage. Those who say it doesn’t matter are either lying or living in a fool’s paradise.

If you’re getting hitched, then buy a splitting bills calculator before anything else. Trust me, this calculator will help you avoid debts, financial troubles, and ugly fights in the future.

How do you divide finances in a marriage? Is there any set rule you follow? How far have you succeeded? Share your ideas and thoughts.

FICO Forums – A new world and a new beginning

joined FICO forums

I’m quite excited to share a good news with you all.

I have joined FICO forums a few days back, and the experience has been truly amazing. I’m too excited.

My experience in FICO Forums

If you ask me, I can tell you one thing. A forum is the best place to learn new things. It’s a platform where common people and industry experts come together in one place. They share their unique experiences and knowledge with each other on various topics. Since I work as a content editor, so I prefer to participate in debt or financial forums. If your interest is in technology, then you can participate at CNET or Techist for having tech discussions.

When I first started working as a content writer, I didn’t have any knowledge about many things. Finance was a new domain for me. I lacked both knowledge and experience. One of my senior colleagues suggested me to participate in forums as a way to gain knowledge. Thank God, I followed his advice. Otherwise, I wouldn’t have survived as a content writer.

FICO Forums is a new world altogether. Moderators are extremely cooperative and helpful. The questions are interesting. Most importantly, in my brief experience, I learned a lot of new things from there. For instance, previously I knew that the ideal credit utilization ratio is 10%. But one of the moderators pointed out an interesting point. The ideal credit utilization ratio is actually less than 8.9% since 9.000001% is also regarded as 10%. This actually makes sense but it never came to my mind. Kudos to the moderators!!!

There is yet another interesting point I came to know recently. Previously, I knew that our credit score doesn’t increase when we pay off charged-off accounts. But that is wrong. If the credit utilization ratio is high or above 100%, then your credit score can increase after paying off charged-off accounts. When you pay off charged-off accounts, the credit-utilization ratio drops. This helps to increase your credit score.

The forum members, moderators, and the entire community are quite friendly. The discussions are quite interesting. So far, the experience has been good. Let’s see what’s in store in the future.

The sign-up process is quick and easy. If you want to know more about various aspect of credit score, I would recommend you to register at FICO forums. You can post your questions there. I’m there to answer your questions. Plus, you can get new insights from the the community leaders and valued members.

A new beginning and I’m quite excited

I have decided to actively participate in Fico forums. In my brief stint at this forum, I have learned one thing. I’m still new in the financial domain, and there is a lot to learn. This is just the beginning. Hopefully, I’ll be able to explore new areas of the financial world through this forum. Fingers crossed!!!

Just to let you know. I’m participating in Fico forums with this id – stacyishere4u. You can check my posts and profile there. Got 2 Kudos already. Yay!!!!

Do you participate in any financial forums? How is your experience? Share your feedback here.

Americans racked up average $1054 over the holidays

Americans racked up average $1054 over the holidays in 2017. All thanks to holiday shopping. According to the report published by MagnifyMoney, 68% of frenzied shoppers used credit cards for holiday shopping, a figure higher than 2016. 17% of shoppers used store cards, 9% of consumers took out a personal loan, and 4% borrowed a payday loan during the festive season.

How much Americans have to pay

If Americans pay $25 every month, then it will take 5 months to clear their holiday debt of $1054. Plus they will pay an extra $505 in interest, which is 50% more than the original spending. The average amount of holiday debt increased by 5% in 2016. But this is just the average. Almost 18% shoppers incurred $2000 of debt. Most of consumers didn’t plan or expect to borrow so much but the lack of proper financial planning lead to problems.

49% of consumers expect that they can pay off their debts in 3 months. 51% of consumers feel that they it will take more than 3 months to clear their holiday debts. 10% of consumers feel that they can only pay the minimum amount, which means it will take more than 5 months to eradicate their holiday debt.

Another lingering problem

Though most consumers used credit cards for holiday shopping, some used payday loans for holiday purchases. Payday loans are costlier than credit cards due to their high interest rates. Some payday loans have 500% interest rates. Can you imagine that? I know many people who have closed their bank accounts just to get rid of payday loans. Payday lenders directly debit money from consumers’ accounts every month, and they keep on doing that till the loan is completely paid off. Unfortunately, the interest is so high that most consumers are unable to pay off the amount. Hence, lenders continue to withdraw the amount.

How can Americans tackle holiday debt in 2018?

Where there is will, there is a way. Americans can get out of debt in 2018 itself. All they need to do is use a few strategies. For instance, they can refinance their credit card debt with a debt consolidation loan or a balance transfer method.

Balance transfer method is good as long as consumers pay off the full amount within the introductory period. If they can’t, then they have to pay double interest on the accrued amount. This is why many financial experts warn consumers against credit card balance transfers.

The other option is the debt consolidation loan, where consumers can replace their existing credit card debt with a single loan with low interest rate. This option is good when the interest rate is low and the loan term is short. If the loan term is long, then a consumer has to pay a big amount in the long run. It isn’t beneficial.

So what’s the viable option? If you ask me, I’ll say it’s the debt consolidation program where consumers can pay as per their affordability without any added interest or penalty. I mean, they can sleep comfortably since they have to make a low monthly payment due to reduced interest every month.

Wait! I’m not finished yet

Consumers should check their credit report diligently since that makes a direct impact on the credit score. They should find out what’s there on their credit report to avoid unpleasant surprises later.


Do you need to save money when ditching debts?

save and pay off debt

Simple mathematics suggests that we should pay off debt before saving money. In general, paying off debt is a long battle. For instance, it takes 10-25 years to pay off student loans. Should you focus all of your energy only on paying off debt for so many years, or should you save money and pay off debt simultaneously?

The simple answer is – it depends.

Why you should save money and pay off debt simultaneously

The reasons are simple and clear.

First, you need money to pay off your debts fast. If you opt for debt settlement, you have to save money before the negotiation process starts. If you opt for debt management, then you need to save money for making the monthly payments.

Secondly, you need to set aside money for building an emergency fund. An emergency fund is a must when you’re in debt since it can help you cover unforeseen expenses. You can’t depend on credit cards anymore since that will only increase your debt problems.

Your mini emergency fund should be between $1000 and $2000. This would help you cover your short-term emergency expenses.

Examples of short-term emergency expenses

  1. Unemployment
  2. Car repair
  3. Special days like birthdays and anniversaries

Set a goal to create an emergency fund that is enough to cover your living expenses for 3-6 months.

Fresh debts are a menace when you’re already in a financial crisis. When you have money in your savings account, you can easily cover your immediate expenses, avoid high-interest payday loans, and credit card debts.

Do you want to pay off debts as soon as possible? If so, then you have to make additional payments on your debts. And, it’s only possible to make those extra payments when you have savings. In debt avalanche method, you need to make extra payments on the high-interest debt. Likewise in debt snowball method, you need to make additional payments on the smallest debt till it is paid off. It will be tough to make those extra payments without saving money.

Lead a frugal life when you’re in debt since this will help you save money gradually. Cut off cable, cook at home, move to a smaller apartment, get rid of your second car, use CFL bulbs, host potluck parties, buy in bulk, avoid late fees, insulate your walls, adopt a minimalist wardrobe, borrow books from a library, stay healthy, find free entertainment, sell your unnecessary goods, drink water, travel frugally, save gas, sun-dry clothes, and quit smoking.

Retirement planning and debt repayments – both are equally important. So you need to save money to build your nest-egg too. Save money and contribute more toward tax-advantaged retirement savings accounts like 401(k), IRA and Roth IRA. You shouldn’t ruin your financial future just to pay off your debts. Try to increase your contribution rate by 1% every year since this will increase your retirement savings considerably.

How to save more and pay off debt fast

Have you saved an adequate amount already? If so, then you can invest to earn a higher return on your money. Consult a financial adviser and invest wisely since one wrong financial move can ruin you.

The stock market can earn you 4%-5% return on your investment after deducting taxes and fees. Calculate the interest-rate you’re paying on your debts. If it is less than 4%, then focus on investments over debt payoff. For example, auto loans and home loans. These are low-interest loans.

When you should give 100% focus on repaying debts

Forget about saving money when you have high-interest and non-tax deductible debts. Pay off your debts as quickly as possible to save on interest.

What if the interest-rate on your debt is between 5% and 7%? In this case, you can invest your savings and pay off debts simultaneously.

It is better to get rid of payday loans and credit card debts fast since these are high-interest debts. Some lenders charge 600% interest-rate on payday loans and push borrowers toward a deep ‘debt pool’. Try to get rid of payday loans quickly. Check out your state payday loan laws. Find out if payday loans are legal in your state. If your lender doesn’t have a license, then pay only the principal amount. Join debt forums to know about the strategies to pay off debt.

The final verdict

The final verdict is loud and clear. You have to watch out for the ways to save money while you’re paying off debts. You have to save money for buying a home, giving good education to your kids, building your nest-egg, and so on.

Try to strike a balance between saving money, investing and paying off debts. For instance, if you have transferred your outstanding balance to a 0% interest card for a short period of time, then it’s a golden opportunity to invest and pay off debt. Make sure you earn an amount that will help you pay off the debt before the new interest-rate kicks in.

You can pay off your low-interest debts fast and increase your contributions toward retirement savings plans. Once you pay off your low-interest debts, you can pay down your high-interest debts. You can use other strategies as well. It’s your choice. As long as you’re progressing financially, it’s fine.

What do you feel? Do you feel that it’s a horrible idea to save money while you’re paying off debts? What’s your opinion? Think and let us know.

How would the new rules for FAFSA form affect you?

how fafsa rules affect you

Good news for all the parents and high school students. The Free Application for Federal Student Aid, also known as FAFSA form will be available 3 months early this year. This means you can apply for financial aid from October 1, 2016.

This new change will have a big impact on the high school students and their families. Here’s how.

1.You can easily give all the financial information: You can use the figures from your 2015 income tax return when applying for 2017-18 financial aid. This means you use your ‘prior-prior’ tax information instead of estimating your income, which you have probably done in the previous years.

As per The Department of Education, 2 million Pell-eligible students couldn’t apply for the financial aid last January 1 due to the complex timing with tax filing.

2. You can avoid getting selected for verification: The IRS Data Retrieval Tool makes the filing process simple and easy. You can directly import the numbers into your FAFSA form and thus avoid getting subjected to verification. In the previous years, one-third of applications were subjected to verification. Hopefully, this figure will drop significantly with this tool.

3. Your child can file for FAFSA when applying for colleges: The three months early availability of FAFSA will be beneficial for mostly low-income students since it prolongs the filing period for most colleges and gives counselors more time to guide students.

4. You may come to know about financial aid awards sooner: One of the reasons to change the timeline is to help colleges inform accepted students about financial aid awards promptly and give them more time for making the final decision. It is tough for the students to decide on a college by May 1 after receiving award letters in April. This year, the situation will be different.

A few colleges will send award letters quickly while others may stick to the same timeline. If students don’t have no clue about when they can possibly get financial aid package, then they should contact the school.

And, finally,

Have your financial situation changed lately? Are you worried that your 2015 income tax return doesn’t reflect your present financial scenario? If so, then just submit the FAFSA and visit your child’s college once he’s been accepted. Give your recent financial update and request for a professional judgment review.

Should you break up with your boyfriend since he has student debt?

Aww! This is a tricky question since lots of things are at stake – your financial state of affairs, your relationship and your future. But should you dump your boyfriend just because he has lots of student loan debts? Should you get out of the relationship?

If you ask me, then my answer would be to not to get out of relationship just because of this reason. Don’t leave the hand of your boyfriend simply because he is in financial trouble. Rather, try to find out the answers to these questions.

How is your boyfriend dealing with his student loan debt?

What is your boyfriend’s attitude towards his student loan debt? Is he too casual about it? Is he taking various steps to pay off debt? Is he taking careful steps so as to avoid getting into fresh debt problems?

An individual with a positive mindset will take all the possible steps to get out of debt. He will spend less than what he earns. If your boyfriend is trying his best to resolve his debt issues, then don’t leave him. Rather, suggest tips that can help him to pay off his student loans as soon as possible.

I would rather be with a person who is drowned in debts and making additional payments to attain financial freedom than a man with zero debt but not saving a penny for the future.

Is the situation too bad?

Don’t get scared by the figure. Rather, look at the broader financial picture. How quickly can your boyfriend get out of debt when both of you put an equal effort towards it?

Put together your income, debt and expenses. Find out which assets can be sold and how much you can potentially save by living together. The overall financial picture may not be as dull as you think.

Last but not the least

Are you compatible with your boyfriend? If it is a long-term relationship, then you would know the answer. Are you stressed out just because of the financial issue or are there other problems too? See, if you have compatibility issue with your boyfriend, then step back. But, if you’re simply scared due to debt issues, then I would suggest you to give a second chance to this relationship.

Financial compatibility is important. This implies that both of you should have similar financial values. This is why you need to discuss how your boyfriend is dealing with his debt problems instead of focusing on the fact that he has debt. Look at the broader picture. Think how your financial life would be like after marriage. These little things will give you a clue if your relationship would work out.

The highs and lows of debt consolidation – Is it ideal for you?

Hello guys! As promised in my article, I’m back with my post on highs and lows of debt consolidation. In this post, I will cover on the ups and downs of debt consolidation. This means I’ll explain the features that deserves a thumbs up and thumbs down. Also, I’ll tell you when debt consolidation is an ideal debt relief option because like wine it’s not for everybody.

Highs and lows of debt consolidation

By now you already know that debt consolidation is not a myth. It does exist in reality and rules the financial world as well. But is it ideal for everyone? What are it’s highs and lows? Let’s have a look.


  1. You get a monthly payment plan that is easy to manage
  2. You don’t have to spend dollars for paying penalties
  3. You have to pay only what you can afford
  4. You only have to manage one bill every month
  5. Your credit score will become better later


  1. Your debt doesn’t go away instantly
  2. You’ll pay more if repayment term is too long
  3. Collection calls will be less but creditors can still call you

Is debt consolidation ideal for you?

I can’t say ‘yes’ or ‘no’ simply because your financial need is different from mine. And my financial need is different from Mr.X. To put it in simple words, debt consolidation is ideal for you when it meets your financial needs.

When debt consolidation suits you

  1. You’re eager to reduce your interest rates
  2. The monthly payment plan suits your budget
  3. Collection calls become less
  4. Penalties are waived off
  5. You’re perfectly fine with the tenure of the program

When it doesn’t suit you

  • You want to reduce the outstanding balance
  • You want to get out of debt within 3-4 months
  • You wish to get rid of debt by paying a lumpsum amount
  • You wish to apply for new credit cards or mortgage
  • The company offering the consolidation program is not trustworthy
  • You have secured debts like auto loans and mortgage.
  • You have tax debts

Most popular ways to consolidate debts

Typically, you can consolidate debts in 3 different and unique ways and these are:

  • Debt consolidation program – This is ideal when you get an affordable monthly payment plan.
  • Debt consolidation loan – This is ideal when you want to replace your credit card debts with a new loan at low interest rate.
  • Credit card balance transfer – This is ideal when the credit limit on the card you’re transferring the balance is higher than the total balance.

What else you need to know

Debt consolidation is only a temporary solution to a huge problem. As per the Gallup survey, in 2014, an average credit card holder has $5142 of debt and 3.7 credit cards. If you add mortgage, auto loans, student loans; then the total debt amount will be even more. In this kind of a situation, debt consolidation will seem to be a viable solution. But if you look into the matter little closely, then you’ll realize that debt consolidation is not the permanent solution.

You need to find out the root cause of the problem. You need to change your spending style and lifestyle. And last but not the least, you’ve to live as per your means.

This was my take on the highs and lows of consolidation. Do you’ve any other point I missed out? If yes, then do share it with us.

Debt consolidation – Does it really exist or is it a myth?

Chances are high that you’ve heard loads of things about debt consolidation such as:

  • “Debt consolidation leaves you with only creditor instead of many”
  • “Debt consolidation is actually bad as it leaves you with a loan”
  • “There is nothing called consolidation. This is basically DMP”

When I started working as financial writer, trust me it was really a tough time for me. The first few weeks went into differentiating debt consolidation from debt settlement. Initially, I used to feel all the debt relief options apart from bankruptcy are the same simply because most of the websites only talked reducing payments. In fact there was a time when I really thought debt consolidation does not exist in reality.

Debt consolidation – A fact or a fiction?

Well, after writing tons of articles on debt consolidation, I can confidently say now that it does exist. Yes, I won’t deny the fact that there are lots of similarities between debt consolidation and other debt relief options. But, one single factor makes it unique. Before I go into the similarities and dissimilarities, let me explain you how debt consolidation actually helps people with poor finance management skills.

Debt consolidation – A new creditor kicks out existing creditors

Debt consolidation essentially gives you a single monthly payment plan through a loan or a program to repay your current debts which could be personal loans, utility bills, credit card debts, etc. The interest rate you’ve to pay will be much less and the repayment term will be really flexible.

How is debt consolidation different from others

Debt consolidation – Here you get a single and affordable monthly payment plan to pay off your multiple bills.

Debt settlement – Here you have to pay only a fraction of the total amount. This essentially means that the principal amount will be reduced.

Debt management – Here credit counselors give you a budget-friendly monthly payment plan with low interest rates.

Similarities between the 3 debt relief options

  • Collection calls will be less
  • Penalties and extra interests won’t be there
  • Less possibilities of lawsuits and wage garnishment
  • More savings in the long run

And the most popular award goes to…..

It’s really difficult to decide which option is the most popular one. There’s really a tough competition between settlement and consolidation. Some people criticize settlement hell of a lot but yet it is a very popular option. Read more at – What makes debts settlement such a popular option

But this doesn’t mean that debt consolidation is less popular. Facts like (a) positive impact upon your credit score (b) one monthly payment lead to the increased popularity of debt consolidation.

Most popular debt consolidation myths you can find in the web

  1. Myth 1: It drops your credit card balance almost by 50 percent.
  2. Myth 2: You’ve to pay an upfront fee for consolidating your bills.
  3. Myth 3: Debt will stay with you forever if you don’t consolidate.
  4. Myth 4: Consolidation loan and program are basically the same.
  5. Myth 5: Debt consolidation is really bad for your credit

Few words more on consolidation

Be it debt consolidation or anything else, don’t come to any conclusion just by watching a commercial on TV. There are lots of ins and outs of debt consolidation which you probably are not aware of. There’s still lots of confusions and misconceptions which I will cover in detail in my next post. Besides, debt consolidation is not ideal for everyone. I’ll explain that too. Just have a little bit of patience.

Meanwhile, if you’ve some questions regarding debt consolidation, then ask me. I’ll be happy to help.

What makes debt settlement appealing in spite of many flaws?

“Don’t go for debt settlement as it drops your credit score. And don’t go for debt consolidation as it is a scam as well.”

You must have read these lines 100 times in 1000 articles spread in the web. But why do people still go for these options? Why don’t they reject these options altogether? Why do people still go for settlement?

What makes debt settlement an appealing option?

Well, the actual answer is that debt settlement helps to dissolve delinquent accounts fast and this is the biggest pros of this debt relief option. Other than this, there are some other positive side of this option as well and these are:

  1. Debts finally go away from your life without making you bankrupt.
  2. You don’t have to get involved into dirty negotiations.
  3. You only have to pay a fraction of the total outstanding balance
  4. Collection calls and harassment will be less since settlement companies will tackle everything.
  5. Once you enroll into a debt settlement program, the chances of getting sued is reduced.
  6. Creditors will feel less inclined towards wage garnishments.
  7. Late fees, penalties, over limit charges will be gone.

What about the credit score factor?

There is no doubt that debt settlement makes a dent in your credit score. You’re not paying the full amount. Credit scoring models view this negatively. That’s why you’ll see a drop in your credit score. But, there is yet another factor you need to consider and that is:

By the time you go for debt settlement, your credit score has already taken a hit due to missed or late payments. So, a few more points will hardly make a huge difference.

Having said that, there’s is yet another thing which I need to discuss in details. And that is how much will your credit score suffer. If your credit is really in a good shape, then you’ll see a bigger drop in your score. But, if your credit is not in a very good shape, then you’ll see a small drop in your credit score.

Is there anything else that affects debt settlement’s appeal?

The only other factor that is coming into my mind is the tax consequence. Anyone who has settled debt and saved more than $600 is bound to face tax consequence. But tax obligations will not be there in case of bankruptcy.

Is debt settlement more appealing than other options?

Well, this is a controversial question since all the debt relief options have positive and negative sides.

Debt relief options
Debt settlement
Fast debt relief
Credit score drop
Debt consolidation
Easy payment plan
May have a long tenure
Court supervision
Credit damage & asset liquidation

Now if you get into a comparative analysis, then a few points will come before your eyes and these are:

  1. Debt settlement drops your score but much less than what bankruptcy does.
  2. Debt consolidation doesn’t affect your credit score but may make you pay more in the long run.
  3. Bankruptcy can help to dissolve debts within 3-4 months but will remain on your credit report for 10 years.

It is really not easy to make a decision since one wrong decision will cost you dearly. You’ll not get everything at one time. So, my suggestion for you will be to analyze all the appealing and unappealing part of all the options before making any decision.

Debt settlement is certainly more appealing than bankruptcy. But is it more appealing than debt consolidation? This is the bigger question. I’m throwing this question to you guys. What is your opinion? What do you feel? If you’ve debts, what will you do? Will you choose to settle debts or will you think about consolidation?