Splitwise’s Math Problem

Math puzzle nerds, like me, love the challenge of splitting expenses. Whether it’s roommate bills or a restaurant check, figuring out who owes who what can be a weirdly gratifying duty. (My dream job, as depicted on Portlandia.)

So when I heard about this new app called Splitwise, I thought my skill would be made totally obsolete. Basically, you enter group expenses into the app, Splitwise does all the calculations, and uses your PayPal/Venmo/etc account to “settle up.”

While all you people with real lives and real hobbies probably love this, I was initially reluctant to forsake my beloved spreadsheet matrices. But I caved. I gave Splitwise a whirl at a (delightful!) nine-lady bachelorette party last weekend.

And I have to confess: Splitwise is pretty great. The user experience is intuitive, it’s easy to make different subsets responsible for different expenses, and users do zero calculations to figure out the transaction requirements/amounts.

But, dude. The way Splitwise does this is, to put it in technical terms, inefficient AF:

The way I’ve always done this math is a little different. I basically try to minimize the number of transactions needed. This is probably a relic of pre-Venmo days, when we all actually had to write physical paper checks to one another. Instead of wasting checks for every one-on-one balance, I’d basically say: OK. If I put $541.78 into the “group balance sheet,” but I only owed $225.87 to the group, all that matters is that I get $315.91 back from the group somehow. I give zero craps about who it actually comes from. Similarly, if Joslyn owes $218.87 to the group, it doesn’t matter to her who she pays it to.

So, to balance the cash flow while minimizing transactions, I just MATCH people who owe the group (owe-ers) to people who are owed by the group (owe-ees).

Why does this matter? Some users may have transaction fees associated with their bank account or with the payment app they associate with Splitwise. Plus, all these transactions clog up my Venmo feed, which is normally a very fascinating window into my social network’s financial habits. And also, efficiency for efficiency’s sake!

But I could see why Splitwise does this. For one, it promotes their app multiple times over across multiple Venmo feeds. Free publicity, baby. But importantly, if there’s a stinker in the group who doesn’t pony up? The effect is spread among everyone. For example, if Joslyn snaps and goes off the grid and never settles her tab, five of us share the brunt rather than just Claire.

What do y’all think? Any other bill splitting methodologies out there? Anyone think they can get fewer than 8 transactions out of this scenario? Download the data and explore my Tableau Public workbook.