AIBU to think that this financial arrangement make sense or is way too complex?!

(66 Posts)
ComposHat Mon 29-Jul-13 18:03:13

Right here goes....

Just got married and both DW have roughly similar incomes (I am doing a PhD and have bursary, she works full time)

Until we got married, we had totally separate bank accounts (for a variety of reasons, but mostly because we have very different attitudes to money and spending habits. One saver and one spender)

Both of us world feel resentful of the other if the finances were totally shared, they'd be mutual accusations of 'running through the money and having nothing left to buy milk' or 'being deprived because the other is a tight bastard.' Neither of our approaches to money is right or wrong, just different and not reconcilable. We'd both feel our independence was being compromised and for us, everything in a joint account, isn't really an option.

Equally it is becoming a faff with joint expenses,such as the weekly shop. rent and utility bills, as we have to keep constant track of who owes who what.

So this is what I've come up with.

Our wages/bursaries continue into our personal bank accounts.

We each pay the same amount into a joint account for food, bills, rent/mortgage, council tax etc. (say £450 each) at the start of the month.

Whatever is left at the end of each month in the joint account is then transferred into a joint savings account.

That way we have three lots of money

1) Our personal accounts (our own to do with as we like)
2) The joint current account (for day to day purchases)
3) The joint savings account for expensive long term purchases such as furniture or as a 'rainy day fund'

Does this seem a bit convoluted and over elaborate? DW seems to think it will be harder to keep track of what money was where and making sure there was enough in each account.

Any thoughts or alternatives would be gratefully received!

jkklpu Mon 29-Jul-13 18:06:25

It does sound a bit complicated, tbh.
Why not each transfer the same amount to a current account and a different amount each to a savings account? That way, you'll know you're saving something and it won't depend on having anything left at the end of the month.

DontmindifIdo Mon 29-Jul-13 18:11:28

that's how we do it, make sure the joint account is enough to cover the bills, I'd say for the first few months, don't transfer out the excess, keep it in there to build up a float incase there's a big bill and you won't have to worry in the same way that there's enough in there to cover the bills.

Each of you will only really have 2 accounts to keep track of, you your personal 'fun money' (which you can spend as you like without worrying the other one is over spending/what the other one thinks of your spending) and the joint account which is for sensible things. We have a rule we don't pull cash out of the joint account, so we can always track any purchases from it.

I don't see that you'd regularly need to check the savings account, surely you'll just dump money in there and not touch it/look at it unless it's for something big like a holiday?

ThingummyBob Mon 29-Jul-13 18:12:32

Neither convoluted or over complicated imho.

Seems like a perfectly sensible way to deal with the two different attitudes to spending.

eurochick Mon 29-Jul-13 18:13:02

Sounds fine to me and we do similar.

We worked out roughly what our monthly expenses were and added a bit as a cushion. We then divided that roughly in proportion to our salaries. We pay that amount into the joint account each month, by standing order. Everything else is in our own accounts and ours to do with as we wish, although realistically, we would discuss any really big financial decisions.

We haven't bothered with a joint savings account as interest rates are so low it doens't seem worth the bother of moving the money, but we leave the extra in the joint account and use it to pay for things like pieces of furniture, one off house maintenance and if there is enough, holidays.

ComposHat Mon 29-Jul-13 18:13:36

jkklpu I take the point, but we don't know how much we will be able to save at the start of the month (if anything at all)

We are not on the breadline, by any stretch, but say a bigger than expected gas bill that month, it wouldn't leave us much money to play with.

StrangeGlue Mon 29-Jul-13 18:16:29

I think it sounds sensible. Is she worried about the savings account eating into the amounts you have in your private accounts?

If so it should be easy to work out more precisely what your joint compulsory expenditure is and then set a negotiated lump for savings. For example: rent is £200 each, food is £150, water is £10 elec and gas is £40 tv license is £6...

You just need to decide whether eating out is budgeted or personal expenditure etc.

If one of you is a real spender savings is a good idea else you'll never get a holiday/sofa etc

trinity0097 Mon 29-Jul-13 18:16:48

That's kind of what we do, wages into personal accounts, money transferred to joint account for household expenses. Also wise to pay one twelfth of annual (or less frequent) costs into a savings account, e.g. £30 a month away for car servicing, £20 for Xmas, £5 for house insurance, £100 to replace cars etc... Keep it all in one account, but track what is in each pot via a spreadsheet or similar.

RatUpADrainpipe Mon 29-Jul-13 18:16:49

No, it doesn't sound convoluted to me - it sounds like a sensible solution to your dilemma.

However, I would leave the leftovers in the payment account for about 6 months, then transfer it to the savings account. That way, if an unexpectedly high bill comes in, you can pay it without hassle.

Doesn't sound too complicated at all. Great idea.

chocoshopoholic Mon 29-Jul-13 18:22:46

This is exactly what we do. Top tip of where we fell down was forgetting to factor in annual expenses into the monthly transfer (car mot, tax and insurance!). Now we add in all the expenses, and how much we would like to have ready to spend on a holiday into what we're transferring in so there are no surprises.

We do the same but the joint account always has a buffer in there in case an unexpected expense comes up. We also tend to slush any extra left in our personal accounts into savings at the end of the month. Obviously if one of you is a saver then you may want to keep the leftover money separate.

hermioneweasley Mon 29-Jul-13 18:25:14

Sounds sensible to me too

CMOTDibbler Mon 29-Jul-13 18:25:40

We've done that for 16 years now, though we leave money in the joint account as a buffer.
Works great for us, and we never argue about money

Trills Mon 29-Jul-13 18:25:52

1) Our personal accounts (our own to do with as we like)
2) The joint current account (for day to day purchases)
3) The joint savings account for expensive long term purchases such as furniture or as a 'rainy day fund'

That sounds perfectly sensible, as long as it is arranged so that:
# both #1s get the same amount of money
# you both agree what #2 and #3 are for, and how much goes into them

We find it pretty easy to figure out how much #2 needs (rent/water/internet/gas/electricity don't change unexpectedly, and we estimated an amount for supermarket shopping).

HazleNutt Mon 29-Jul-13 18:29:34

sensible, but you also need to discuss what will happen if you are no longer earning similar amounts, or if one does not have any income for a period of time.

ArtemisKelda Mon 29-Jul-13 18:34:12

Compos this is exactly what DH and I do and it worked really well when we earned around the same. Now I earn less, I put less into the bills / groceries accounts and he puts a bit more in. It means that I can buy what I want with my money, he can do the same with his.

ComposHat Mon 29-Jul-13 18:34:43

Thanks everyone, good to hear that the consensus is that we aren't making things more complex. I think the 'buffer period' before transferring it over is sensible.

I think three months would be sensible as a buffer, someone said up thread, it would never be saved and would be all gone. The car tax/insurance/repairs which are the 'big sum' payments will keep coming out of my account as DW can't drive.

We agreed to work it so we both had exactly the same spending money each, the the rest into joint.

Over time, perhaps you may just need to tweak the detail - eg if one of you becomes a SAHP or goes part time for example.

But having the principle established from an early on makes life way way easier!

ComposHat Mon 29-Jul-13 18:37:39

sensible, but you also need to discuss what will happen if you are no longer earning similar amounts, or if one does not have any income for a period of time

Yes, that is a bridge to cross, my funding runs out in a few years time and the writing up period doesn't have funding. I have some savings, so will be able to use them for my 'share' of the groceries etc. Not sure if much would be going in the saving account for about 8 or 9 months.

Tigresswoods Mon 29-Jul-13 18:37:42

Sounds exactly what we do. It's worked for 10 years. Just need to regularly review how much goes in to the jt account to make sure there enough in there.

ComposHat Mon 29-Jul-13 18:46:20

Am I right in thinking that, you can get the bank to clear the remaining balance at the end of the month into a separate account automatically?

whois Mon 29-Jul-13 18:54:05

Not complicated at all and is a very sensible approach. Should work really well while you earn similar amounts.

This is exactly what DH and I used to do pre-DC and we had similar salaries.

jojane Mon 29-Jul-13 19:03:51

I would see the car as a joint expense as both of you will be getting the benefit ie going shopping, trips away etc

ComposHat Mon 29-Jul-13 19:07:51

Yes, jo DW is yet to see the merits of this!

To be fair I mostly use it for getting to and from University (and for research trips) and most of the amenities such as supermarkets etc are walking distance. If we are going on a trip, she might cough up for some petrol.

RobotBananas Mon 29-Jul-13 19:08:42

Looks fine to me!

I'd go further and have 2 joint accounts though. One for bills, mortgage etc - the things that don't change each month... Then another one for food shopping and other day to day expenses. That way, if the food account is running a bit low you're not going to spend money earmarked for the mortgage.

Works for us

formicadinosaur Mon 29-Jul-13 20:02:13

When you have kids you may want to look at paying everything into a joint account and leaving yourself with the same amount if money in your personal account. 200 a month or what ever.

SmiteYouWithThunderbolts Mon 29-Jul-13 20:04:44

That's exactly what we do at the moment. DH has his wages, I get tax credits and child benefit. We each pay a proportionate amount of the household bills into a third account out of which the direct debits are paid. Whatever is left over we spend as we see fit and at the end of the month, if anything is left (ha!) it goes into savings.

Makes perfect sense to us!

Mouthfulofquiz Mon 29-Jul-13 20:05:35

We do that and it works great!
Same amount of spending money each, same amount into the joint account for bills and the rest of hubby's wages go into savings.

DontmindifIdo Mon 29-Jul-13 20:19:48

We've always kept cars out of the joint account bills, but then we had one each, but I'd suggest if you are hte only one to use it, you can only call your car costs 'joint' bills if your DW's rail/bus costs also come out of the joint money.

I'm currently on mat leave, DH has taken over paying my share into the joint account and when my SMP runs out, he'll be also transfering money to my personal account so we have roughly the same 'fun' money each month.

IMO keeping an account just for bills and food and the your own accounts for personal, fun spending, means you have a much tighter control on your actual costs of running the house/family, people who do it this way are far less likely to get to the end of the month not knowing where all the money went. At the end of the month, you might have overspent earlier in the month so run out of 'fun' money each, but you can do the supermarket shop still and not worry about it.

Blondeshavemorefun Mon 29-Jul-13 20:20:41

exactly what we do apart from transferring into savings account - tbh interest is so crap its not really worth it moving pounds over

what we also do is when joint account is a bit healthly then buy £100 prem bonds, so still kinda saving but also could win a million and can cash in if car blew up and needed money asap

pianodoodle Mon 29-Jul-13 20:36:49

That sounds sensible for your circumstances.

We chuck everything in one joint account here but we pretty much have to just to cover essentials! Would be nice to have an extra account for savings - maybe some day smile

MsVestibule Mon 29-Jul-13 20:49:16

This sort of arrangement works well when you're both earning similar money, and doesn't sound convoluted at all. However, if one starts to earn more money than the other, e.g. one of you goes PT to look after children (sorry, not making any assumptions!) and/or the other starts to earn more due to a promotion/new job, than it's unworkable IMO.

We've always worked it that all income goes into a joint account, and we each have an equal monthly SO from that to our sole accounts. That way, we always have the same amount of 'frittering away' money, regardless of who earns more. Of course, some people believe that if they earn more (for whatever reason), they're entitled to spend more, but that's for another thread!

marriedinwhiteisback Mon 29-Jul-13 20:59:16

I don't know. when we got married I earned more than dh and he agreed to pay half of all outgoings. When I gave up work when ds came along dh was still earning less than me but we had enough and I laid out and gave him a bill with the receipts at the end of the month. He took over all the bills and I billed him for food shopping, petrol, general spends (I am naturally careful and had a little bit of my own money).

I went back to work when the youngest was 5. I earnt a minute fraction of what I used to - still do. Now I pay for extras for the children, kitchen stuff, linen, and my clothes - oh and I pay to run my car.

We have never had a joint account. I earn one tenth of what dh earns and he probably doesn't spend more than me on personal stuff.

I don't think it has anything to do with earnings; I think it has everything to do with attitude to money and it works for us because neither of us is extravagant.

saintava Mon 29-Jul-13 21:18:13

We did a similar thing when we both worked before DC, worked out the costs of the house and car etc and then put an equal amount into a joint account. Now that I stay at home with the DC, DH pays the full amount into the joint account as it saved changing all the direct debits over and I buy the food with CTC etc. It worked well for us.

Any extra in the joint account was just left in there to build up in case of washing machine breaking down etc, and although our council tax is paid over 10 months, we pay the same amount in every month of the year as it gives us a little extra if we need it, like when DD1 broke the washing machine last year (I have no idea how).

A few years ago we used the extra we'd built up to pay both car insurances in one go rather than monthly instalments and we saved paying interest on the insurance, we just divide the amount into 12 monthly amounts and increased the payments into the joint account. Saves us a couple of hundred pounds a year.

adagio Mon 29-Jul-13 21:35:02

Here is what we do:

Budget the joint account for all DD's and a set sum for car insurance, tax, tyres etc; home insurance. Standing order for the savings into joint savings account each month. This is not real savings per se, this is money we expect to spend each year for the big ticket items.

When we earned the same, we paid same into joint account. When we earned different, we paid proportionally into joint account, and now I am on Mat leave I don't pay anything in, the DH covers the lot.

We then put the variable costs - so food, supermarkets etc all on one credit card which we pay half each of each month - always paid off in full, on a cash back card. Again can vary the proportion each pay dependent on earnings, and this credit card is ring fenced for 'joint' only stuff. Currently using the mat pay to cover this.

We also each have our own credit cards should we want/need them. We each have our own personal accounts and savings accounts, which we can do what the heck we like with - but worst case we know the bills are covered from the joint so we would never be homeless, and no one gets the hump if the other blow a ton on a good night out (well, thats obviously not me anymore since DD arrived but you get the idea!). It also means presents are genuinely a surprise and cost is genuinely unknown - I like that element particularly for e.g. my 21st and 30th where I am sure he pushed the boat out, but I will never know the details :-)

adagio Mon 29-Jul-13 21:36:31

basically, what saintava said then!

Somethingtothinkabout Mon 29-Jul-13 22:07:44

We do this too. We worked out (well, I did, with a trusty spreadsheet) what we need to cover mortgage, council tax, gas/electric/sky/tv/phone/internet/all insurance. It came to £1300, so we put £1350 in the joint account. We both put in a proportion of our salaries to cover that meant we both have the exact same amount left in "fun money".

This way we were both able to budget ourselves, and anything left from our fun money we save in our own accounts, anything left in the joint account runs over as a buffer the next month, and hopefully as a contribution to holidays.

Sometimes if we are making a big joint purchase we split the cost 3 ways, we each pay a third and the joint account pays a third, makes us feel like we're getting a bit free!

saintava Mon 29-Jul-13 22:56:27

adagio great minds and all that! smile

Most of friends seem to have different ways of handling their finances, I think it's interesting how as a group we all do things differently but are all happy. Really shows I guess how there is no right or wrong way, just what works for each couple

WafflyVersatile Mon 29-Jul-13 23:05:28

Sounds fine to me, but savings are best put aside at the beginning of the month. If you leave them to the end there is nothing left, especially if one of you is a spender.

Be clear on what comes from the joint account and what doesn't but accept that if someone buys a paperback from the supermarket when doing the weekly shop it is no big deal.

We do it slightly differently. All income goes into a joint account, because we consider all money to be jointly owned. But, money is transferred by standing order from the joint account to our two personal accounts, we each get the same amount of 'pocket money', and it's ours to do with as we wish; save it, spend it, fritter it away, whatever we want. If a surplus builds up in the joint account, it is transferred to a joint savings account, but this doesn't happen every month.

I have in the past done it the way you are planning to do it, and although it was OK in the short term, in the long term you have to keep revisiting the arrangement/amounts whenever there's a big shift in joint expenses or a change in one person's income. The way we do it now, what changes is how much 'pocket money' we take. Over the years it has gone up and down, but always equal and always with the joint expenses taking priority.

ComposHat Mon 29-Jul-13 23:44:35

okay I can see the logic of the all in a joint account amd then pocket money each. However I'd feel awkward about asking DW to support me whilst finishing up the PhD. I doubt the suggestion would sit well with her either. I think we are so used to thinking 'my money & his/her money' rather than 'our money' that it wouldn't work.

I understand how you both think now ComposHat but really recommend you start talking about it and thinking about it now - perhaps with the advise of this thread.

What if you DW lost her job for any reason (god forbid)? What will you do when writing up?

Best you don't argue face these questions at the time.

Dp and I do what is written in your op. But I tend to put a lot more in earn more and have more to spend, so our savings is essentially made up of my earnings. I have no savings of my own whereas does to cover the shortfall when he vs earning less (exam time and early summer).

Tbh it has ended up that any income is joint income in our minds, we just happen to keep some in our own accounts because it's easier to keep track of our individual spending and personal budgeting that way instead of puzzling which transaction was mine or his and what it was on.

212VIP Tue 30-Jul-13 08:39:36

That's exactly what we do. Not convoluted. Very straightforward.
Although there's never anything to transfer into the savings ime... ;)

sparechange Tue 30-Jul-13 09:05:06

Sounds sensible, except, would the spender have any money left to put in the savings account?
Because if after a year, it is all from the saver, and then the spender suggests buying something, would they have an equal say?

How about on payday
Set amount goes into the 'household' account, set amount goes into the 'savings' account and what ever is left over, you keep

(also, can you do it as a % of take home pay, to make it fair if one of you gets a payrise or cut?)

Didactylos Tue 30-Jul-13 09:14:37

it sounds pretty sensible
look at how many threads on here are about unequal financial arrangements between partners:

We do something similar for a joint/household account except a sort of proportional sum as theres a bit of a difference between our incomes and it would be unfair if we paid the exact same amount. Set proportion for each of us goes into a savings account too. Personal debts/cards etc are paid off from our individual accounts, clothes, presents etc. So we can both prioritise from our own income without feeling we have to justify ourselves to the other. If theres an issue (mistake on wages, cashflow issue, big purchase, between jobs) we usually have enough in the joint account to cover or the unaffected one will step in with money from a personal account to cover a cashflow crisis

KatyN Tue 30-Jul-13 09:18:23

we do this too.. except we each get the same amount of spending money rather than paying the same amount into the joint fund. that way if one of you starts earning more (or maternity leave - am I thinking too far in advance) it's fairer.

We only have one account though and manage our spending money through a spreadsheet. I felt really unconfortable about having a bank account that my DH couldn't access.

k

UC Tue 30-Jul-13 09:29:08

DP and I have almost exactly that set up. For similar-ish reasons. It works.

bumbleymummy Tue 30-Jul-13 09:54:13

Sounds fine to me.

WilsonFrickett Tue 30-Jul-13 10:03:34

I'm another one who seconds premium bonds rather than savings, certainly while interest rates are so poor. We win around £25 almost every month, which is more than we'd get in interest. And they're a little bit harder to get your hands on the money - you have to do a bank transfer rather than just going to an ATM, which is a good thing in my book!

ComposHat Tue 30-Jul-13 10:58:30

premium bonds - what an excellent idea!

CheeseandPickledOnion Tue 30-Jul-13 12:10:25

That's exactly how me and my DH split things and it worked really well for us.

TeenAndTween Tue 30-Jul-13 12:20:26

I think it is fine, and is how DH and I are set up.

However you need to discuss what if incomes differ, or one disappears. You are a unit, if you have no income during phd write up, your wife or joint savings should support you.
Similarly if 3 years down the line your wife goes on maternity leave, you / joint savings should support her.

I would suggest putting in proportionate to your income (so now you both put in the same). And also putting in a bit more to build in the buffer you need for your phd write up, and later children ( planned or otherwise.

I also think car should come out of joint, it is a household necessity (to enable you to get to work).

tomverlaine Tue 30-Jul-13 12:26:44

we have the same - although we put in a disproportionate amount (which has varied over the years). You may want to consider joint credit card as well for big one off expenses.
Also make sure you know what joint expenses consist of- eg can you buy birthday presents from it?

AnythingNotEverything Tue 30-Jul-13 12:38:48

Sounds sensible to me. It's actually probably simpler than how we do things, but DH is a spreadsheet geek.

I think separate spending money is key if you have different attitudes to money. DH would check his statement every day, whereas I'm a bit more laissez-faire, and keep a rough track of spending in my head. I never go over my mogul budget, but it drives him mad that I don't know how much money is in my account! It also means I can buy gifts and haircuts without having to justify the cost, and he can do the same with golf.

chubbymomie2012 Tue 30-Jul-13 12:41:24

I think it sounds sim,e enough. infact might be tempted to steal the blue print!

ComposHat Tue 30-Jul-13 12:49:34

steal away chub

Alohomora Tue 30-Jul-13 13:00:39

Sounds entirely reasonable to me. I'm a spender, DH is a saver, we have debt to pay off and are saving for a house deposit. He earns about twice what I do.

Wages go into our own accounts, monthly money to cover bills/petrol/rent goes into shared account (what each person pays is calculated percentage wage as he earns more).

It works for us and means I curtail my spending. If we go out we share the bill, though - I always get confused/impatient when we go out with friends who live together and there's kerfuffle cause one person doesn't have enough change for their coffee and the other won't cover it.

nkf Tue 30-Jul-13 13:02:42

If you do the joint pot, separate fun accounts, how dovyou pay for going out to dinner together?

EllieQ Tue 30-Jul-13 13:03:05

That's exactly what we do - we have a joint account for all household costs (from mortgage to pet insurance), and a joint credit card which is paid off in full each month. All household shopping (groceries, house stuff, joint entertainment eg cinema tickets) go onto the credit card (except bits of top-up shopping like bread or milk which would be paid for in cash).

We've worked out how much needs to go into the joint account to cover monthly expenses, including a monthly amount for anything that's paid quarterly/ yearly, and the average monthly amount on the credit card, and after payday we each pay our share into the joint account (currently 50:50 as we earn the same, but has varied).

This works well as we know that whatever is left in our own accounts is our own money to do whatever we want with! If there is a more expensive month on the credit card, we can put extra money across at the start of the following month to make sure there is enough in the joint account to cover it.

If we have children and there are far more monthly expenses, we might switch to pay going into the joint account and 'personal cash' being moved from that into our own accounts, to make it easier.

EllieQ Tue 30-Jul-13 13:04:26

nkf going out for dinner together would probably come from the joint account, unless one of us was treating the other eg: Birthdays.

Viviennemary Tue 30-Jul-13 13:05:36

That sounds fine to me. It is a bit over-complicated but it can still work as long as you are both earning similar amounts and have more or less the same fixed expenses like travel to work and so on. When it doesn't work and causes resentment is when one person earns vastly more than the othe partner and both partners have to pay equal share of expenses. Not on.

pizzaqueen Tue 30-Jul-13 13:10:00

This is exactly what me and DP do. Works well for us.

DontmindifIdo Tue 30-Jul-13 14:26:43

NFK - dinner together for us, is either the joint account or one of us treating the other, or if we're paying cash, go halves. More often than not DH treats me as although we set it up to have roughly the same 'fun money' each month, he gets paid for overtime so often will have slightly more than me, but then he puts more in our savings account, so we normally end up spending the same on ourselves. (We didn't set the budget to include bonuses or overtime on the grounds that neither are garenteed money, we tend to save both, unless we have specific big things to get with them, eg. DH bought an annual rail ticket with his last bonus, the one before he stuck on over paying on the mortgage.)

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