Yours, mine and ours: how a three-pot budget works

The three pots at a glance

A pot is an idea, not an account. It can be a joint account, a category in a budget app, or the bills one person pays and the other pays back. The next steps show both ways.

How to set up a yours, mine and ours budget

1. Decide what is shared

Write the list together before any math. Common shared costs are rent or mortgage, utilities, internet, home or renters insurance, groceries, and anything for a child or pet. Things only one of you uses, like a phone plan, a student loan or a gym, usually stay in that person's own pot. Dates, trips and gifts sit in between. Pick a side for each and write it down.

2. Pick how to fund ours

Add up the shared list, then choose how you each cover it.

• 50/50. Each pays half. It is simple and suits two similar pays. When pays differ it takes a bigger share of the lower one.
• By income. Each pays the share of the total that their take-home is of the two together. The bills then weigh about the same on each pay. The guide to splitting bills by income works it through, and the calculator does it for your numbers.

Both are fair if you both chose them. The comparison of seven ways couples split money covers the others, including pooling everything.

3. Choose where ours lives

There are two ways, and each has a cost.

• A joint account. Each of you sends your share on payday and the shared bills come out of it. It is the easiest to run. Two facts to know. The CFPB says that, in most cases, either owner of a joint checking account can take money out and can close it alone. The FDIC adds up a co-owner's share of every joint account at one bank and insures that total up to $250,000, counting the shares as equal unless the bank's records say otherwise. More on the joint account page.
• No joint account. Whoever has the bill pays it from their own account. Once a month you add up who paid what, compare it to what each of you owes, and one of you sends the difference. Your accounts stay your own. The cost is the tally. See paying a partner back.

4. Set a monthly settle-up

Pick a day, such as the first Sunday, and do it then. With a joint account the settle-up is just checking that both transfers landed. Without one, it is the one payment that evens out who paid what. A fixed day is what keeps it from turning into a running favor.

A worked month: $5,200 and $3,400

Say one of you takes home $5,200 a month and the other $3,400. Together that is $8,600. Your shared costs are $3,000: rent $2,000, utilities $250, internet $70, groceries $600 and $80 of renters insurance and shared subscriptions.

With a joint account, each sends their amount on payday and the $3,000 of bills come out. Nothing else to do.

Without a joint account, say each of you pays shared bills from your own account. The higher earner pays rent and utilities ($2,000 + $250 = $2,250). The other pays internet, groceries and the $80 of insurance and subscriptions ($70 + $600 + $80 = $750). Together that is the $3,000. By income, the higher earner owes $1,814 and has paid $2,250, so is owed $436. The other owes $1,186 and has paid $750, so owes $436. One $436 transfer at the end of the month settles it.

What goes in each pot

• Ours: the shared list from step 1. You can add shared goals here too, like a trip, a house deposit or an emergency fund.
• Mine and yours: everything else. Phone, clothes, hobbies, a gym, lunch with friends, gifts, and each person's own saving and investing. This is the part with no questions asked. In our view that is the point of it.

How to handle a cost that is partly shared

Some costs are not clearly one pot or the other. Pick a split for that one cost and leave the rest alone. Say car insurance is $160 a month on a car one of you drives most days. You agree 75% to the driver and 25% to ours, since the other sometimes uses it. That is $120 from the driver's own pot and $40 from ours. Keep these exceptions few. In our view, the more there are, the harder it is to see whether the whole setup is fair.

What to do when one person earns more

You have two main choices, and they are about what you want to be equal. Fund ours by income and the bills take the same share of each pay, but the higher earner still keeps more ($3,386 against $2,214 in the example). Fund it 50/50 and the dollars are equal, but the lower earner has less left over. A third choice is to pool both pays, pay the bills, and split what is left evenly, so each of you keeps $2,800. None of these is right for everyone. It comes down to what feels fair to the two of you.

When the pots change

The setup holds only while the numbers behind it do. Rerun the list and the shares at each of these:

• Moving in together. Start the shared list from scratch. Rent, utilities and a first grocery month will show you what ours really costs.
• A baby. Childcare, diapers and a bigger grocery bill join ours. If either pay drops while one of you is on leave, the shares may need to move.
• Buying a house. A mortgage, taxes, insurance and repairs replace rent. A repairs line in ours is worth considering.
• One of you stops working. Funding by income would put everything on the one who earns. Two options to talk through are pooling both pays, or giving the person at home a fixed amount for their own pot. Neither is a default.

We would also check once a year, and whenever either pay changes.

The trade-offs, plainly

• More admin than one pot. With everything in one account there is nothing to split or settle. Three pots means a list, a share to calculate, and transfers every month. If ours is a joint account, either of you can also empty it (see step 3).
• It needs a settle-up habit. Skip a month and the tally gets harder to rebuild. A fixed day helps.
• You have to agree on the list. What counts as shared is a real conversation, and it will come up again.
• It gives each of you room. You never have to explain a purchase from your own pot. That is the upside, and what some couples choose it for.

This is one way to do it. Pooling everything is simpler, and it may suit you better. Pick the one you both want to live with.

Run your own numbers

The fair split calculator takes both take-home pays and your shared bills and shows 50/50, by income and pooled side by side.