Journal · Settling up
Who owes whom: settle a group in the fewest payments
Work out each person's balance, then settle any group in the fewest payments. With a worked example.
After a trip, the list of who paid for what can look like a tangle. Ravi owes Mei, Mei owes Sam, Sam owes Ravi... It does not have to be that way. Any group can settle in a handful of payments.
Step 1: work out each person's balance
For each person, take what they paid and subtract their share of the costs.
A group of four spent S$400 on a weekend away. Each person's share is S$100.
| Person | Paid | Share | Balance |
|---|---|---|---|
| Aisha | S$300 | S$100 | +S$200 (is owed) |
| Ben | S$0 | S$100 | −S$100 (owes) |
| Chloe | S$60 | S$100 | −S$40 (owes) |
| Dev | S$40 | S$100 | −S$60 (owes) |
The balances always add up to zero. If they do not, something was missed.
Step 2: match people who owe with people who are owed
Start with the largest amounts and pay them off:
- Ben pays Aisha S$100
- Dev pays Aisha S$60
- Chloe pays Aisha S$40
Three payments, and everyone is square. Without this step, the same group might send each other six or more small transfers.
Why it works
It does not matter who paid whom for which dinner. All that matters is each person's final balance. Once you know that, you only need to move money from the minus column to the plus column.
A rule of thumb
A group of any size can always settle in at most one fewer payment than the number of people. Four friends need at most three transfers. Ten friends need at most nine.
Keep the receipts anyway
Simplifying hides the detail, so keep the list of costs. If anyone asks "why do I owe S$60?", you can show them exactly.
With Perpax
Perpax, coming soon from Goldmend Money, will do this matching for you and show the fewest payments that settle the whole group.
General information, not financial or legal advice. Figures are examples. Check your receipt and official sources.