Genesis Hinckley is an outspoken personal finance influencer and entrepreneur, perhaps best known for working to educate and inspire low-income communities about financial literacy and building personal financial freedom.
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She recently posted a reel on Instagram about a subject that can be pretty touchy — splitting bills with family and friends. Whether it’s a night out or a common pool for a big expenditure like a gift or family vacation, there’s a difference between equal and equitable. Here’s Hinckley’s take on different ways to split expenses.
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Keep the Peace
Before getting into different methods for splitting expenses, Hinckley said her “overall objective was to just keep the peace,” which underscores how tricky mixing family, friends and finances can be.
She offered the scenario of splitting a $1,000 expense between four family members and the different ways you could approach the issue.
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Method 1: Split Based on Willingness To Contribute
One way to pool resources is based on how much each person feels good about contributing.
However, Hinckley is quick to point out that “one person may have to eat most of the cost.” A big upside of this method, according to Hinckley, is that it gives people more control, as they’re free to contribute as much or as little as they like.
Method 2: Split Based on Income
Another option is to split large bills based on how much each person earns. This approach is “a little complicated,” according to Hinckley, as it requires knowing everyone’s salary — information some may not be comfortable sharing, even with family or close friends.
Then, you’ll have to do the math to determine percentages and how much each person should chip in. Though it has downsides, Hinckley stressed this is the most equitable option.
Method 3: Split It Equally
An “equal, not equitable” arrangement would be to split the bill equally. In Hinckley’s example, each family member would be responsible for $250 of the $1,000 total, regardless of their income or willingness to contribute.
Though not the fairest method, Hinckley said it has the benefit of allowing everyone to feel good about the amount they contributed.
Talking With Your Family About Money
Hinckley wrapped up the Instagram reel with some personal insight. As the daughter of immigrant parents, she said it’s important to offer more support to your family when you’re able to. Being able to lighten the financial burdens of the people you love, Hinckley said, is “why we work so hard for our money.”
She pointed out that many people are struggling, so turning to family for support is an important and necessary skill to build. And if you’re better off, consider sharing the wealth. One person who may be in a better financial situation and willing to help out more is “a blessing,” Hinckley said.
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This article originally appeared on GOBankingRates.com: 3 Different Ways To Split Expenses, According to Financial Influencer Genesis Hinckley
