What counts as a shared cost

You will be able to sort household spending into shared and personal costs.

Daniel's mother turns sixty this year, and the family is planning a dinner at a Chinese restaurant for forty people. Daniel's share, as one of three siblings, comes to about S$900 in this example. He assumes it comes out of the shared account, since it is a family event and Hui Min will be there. Hui Min assumes it comes out of his own money, since it is his mother. Both assumptions are reasonable. The trouble is that neither of them said theirs out loud until the bill arrived.

A split, equal or proportional, only works once you agree what it applies to. This lesson sorts household spending into three piles: costs that are almost always shared, costs that are often personal, and costs that need a rule you write down.

Costs that are almost always shared

Some costs exist because you live together, and couples almost always treat them as shared:

The home: rent, or the mortgage and anything paid towards it in cash Conservancy charges, property tax and home insurance Utilities, internet and any shared phone plan Groceries and household supplies Savings for joint goals such as the flat, a renovation or a child

If a cost would disappear when one of you moved out, it is probably shared. These go on your list first, and most couples agree on them without much discussion.

Costs that are often personal

Other costs belong to one person. Their own phone plan, their own insurance premiums, a course they are taking, their clothes, a hobby, and repayments on a debt they brought into the relationship are usually paid from personal money.

The one that needs a clear decision is support for parents. Many couples treat each partner's allowance to their own parents as personal: Hui Min pays her S$500 and Daniel pays his S$400 from their own accounts. That keeps it simple and avoids comparisons between the two families. Other couples share it, on the view that both sets of parents are now family to both partners, and pay both allowances from the shared account.

Either choice is fine. What matters is that it is a decision. If the allowances are very different in size, sharing them can feel unfair to one partner, and keeping them personal can squeeze the partner whose parents need more. Module 5 returns to this when it looks at supporting ageing parents.

Costs that need an explicit rule

Then there is a middle group where couples most often clash, because each person has a different default and nobody has said theirs out loud. Gifts to each other's families, such as birthdays, Chinese New Year red packets, Hari Raya, Deepavali or Christmas, weddings in the extended family and milestone dinners like Daniel's mother's sixtieth. Holidays, especially when one person wants a more expensive trip than the other. Eating out, particularly when one of you does it far more often. Pets, cars and big one-off household purchases.

For each one, agree a rule rather than deciding case by case. A rule can be simple. "Red packets and gifts to either family come from the shared account, up to an amount we agree each year." "Holidays are shared at the cost of the cheaper option; anyone who wants an upgrade pays the difference." "Meals out together are shared; meals with our own friends are personal." Once a rule exists, the S$900 dinner is an easy question.

CPF counts too

If you buy a home together, much of the purchase price and the monthly instalments may be paid from your CPF Ordinary Accounts rather than in cash. It is easy to forget, because the money never passes through a bank account you look at.

That CPF is a contribution, just as cash is, and it should go on your records. Each partner's CPF statement shows how much they have used for housing. If one of you pays far more of the mortgage from CPF, that person is putting in more, even if the cash split looks equal.

There is another reason to record it. When a property bought with CPF is sold, the CPF used, plus the interest it would have earned had it stayed in CPF, generally has to be refunded to each owner's CPF account from the sale proceeds. The CPF Board's website explains how this accrued interest works and lets you check the amount for your own property. Keeping track of who has paid what, in cash and in CPF, makes the split fair now and makes any future sale, or the division discussed in module 8, much clearer.

Hui Min and Daniel will pay for their BTO flat partly in cash and partly from both their CPF accounts. They agree to note each person's CPF contribution once a year, alongside their cash contributions.

Before you can calculate anything in lesson 3.4, you need the full list. Go through a typical month of spending, including the irregular costs that come once a year, and decide for each one which of the three piles it belongs in.

List your household costs and mark each one shared, personal or to be discussed.

Course

• Money as a couple and a family