We are lucky enough to live near lots of family. This means that we always have someone to turn to if we need an emergency babysitter or want to borrow an extra mattress. We also find that we tend to incur lots of shared expenses, particularly with my sister-in-law and her family, who live just a few miles away.
We’ll pick up items for each other at the store (“You’re at Costco? Would you mind grabbing me a box of baby wipes?”) or splitting the cost of a gift (“Let’s get our father a bottle of the Framboise he likes for his birthday”) or purchasing items for each other’s children (“I’m in the store looking at the board game my daughter wants for her birthday. Should I buy it for you now so you can give it to her as a gift?”).
This flexibility is undoubtedly convenient, but trying to settle the accounts was always murky. “The bowl you bought me was $40, but I paid $100 for our shared gift certificate which comes to $50 each, so that’s more or less even.” A new shared expense would arrive, and we suddenly could no longer remember whether a purchase from a few weeks ago had already been covered in some previous “settlement”. Or, one of us would write the other a check only to find three days later a new expense that required another check for a similar amount to be written in the other direction.
A couple of years ago, I convinced my sister-in-law that we should do away with this “in our heads” system and set up a Google Doc to track costs.
Each time a family purchases something, they enter it into the spreadsheet, along with whether the expense is shared (both parties are expected to contribute half of it) or one-way (one party bought it for the other with the expectation of being paid back).
The spreadsheet then keeps a running tally of who has spent how much, and which family is owed which amount:
If the amount owed by one family crosses $100, they will actually go ahead and cut the other family a check, but in the two-and-a-half years we have been using this system, we have only needed to do it a handful of times. Costs really do even out in the end.
The beauty though is that the spreadsheet takes all of the guesswork, fuzzy math, and poor memories out of the equation. It’s clear, it’s fair, and it’s easy to use.
Another holiday season just drew to an end, and lots of new entries went into the spreadsheet, but no actual money has needed to change hands. And not having to sort out all of the receipts is priceless.