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Joint finances v. individual accounts for DP and I?

(12 Posts)
ThePartyArtist Mon 10-Mar-14 16:30:31

I'd like to ask others' advice about whether DP (unmarried) and I should start having a joint account for all / some of our income?

Currently, we rent our home (although we are hoping when my currently job search pays off we'll buy our first house). We currently pay our half of the rent separately (out of our individual bank accounts) and for all bills, the direct debit is in one of our names and the other person transfers half to cover their share.

I earn more than DP, and also have considerable savings, which are in ISAs and savings accounts in my name (and which for simplicity I'd keep this way).

Unfortunately, he constantly has less money in his account than we'd like. We are managing fine, but it means for example that he hesitates more often than I would over booking trips away and buying luxuries. In the past I have occasionally lent him money (short and long term) so he can afford to pay his half of our holidays. Out of principal he would never let me pay FOR him, so we continued to split these things equally with me loaning him his half for as long as needed. He has never taken advantage, always repaid promptly, but it has at times felt like a bit of a cloud hanging over us, knowing he's repaying a debt to me for things we've enjoyed together.

Money - or the imbalance in how much we each have - is constantly an issue. I find myself torn between paying for him / loaning him his half OR going without myself when it comes to treats I'd like to have with him (holidays, theatre etc.) I always tell him that it's more important to me that he has a sensible and trustworthy attitude to money, than how much he earns - as his salary may vary (as may mine) but a sensible attitude and honesty about money / debts is the fundamental thing.

If we had a joint account I would not worry about him splurging - more likely I'd worry that he still wouldn't see it as 50% his money, and would therefore feel guilty spending. Also would I feel guilty spending when half of it is his and out of necessity he has a more frugal attitude? However part of me thinks that as this is a longterm relationship and I have every intention of a strong future together, it's silly not to pool our income.

I would be interested in others' advice on whether we should take the step of having our first joint account together.

pepitoincognito Mon 10-Mar-14 16:38:21

hi OP. We were you 8 years ago - now we're married with a child on the way - see my AIBU/greedy thread in money matters for the next step we're going through grin

When we moved in together, we set up one account, in which we put the same amount to cover bills, holiday money, and a little joint saving - you can agree between you what it should cover. Anything that wasn't a bill, we discussed if we would spend it. Yes, our holidays got less flashy, but we felt rich because "the joint acct" was paying for our holiday, not us out of our income that month. This was a big enough first step for me. I didn't want to fully merge finances when we got married, it is only now, that we have a child coming that I am getting around to the idea.

pepitoincognito Mon 10-Mar-14 16:39:13

we still had our own savings, pensions, assets separately. we took it very slowly to start rather than throwing everything in at once.

PinklePurr Mon 10-Mar-14 16:43:19

When I was with xh we had a joint account for all household bills, but we also had separate accounts.

We each paid a set amount in to the joint account each month to cover all the bills, and have a bit over for emergencies.

Then anything we wanted for ourselves we paid for out of our own accounts.

ThePartyArtist Mon 10-Mar-14 16:51:15

It seems quite a lot of people have a joint a/c which bills and mortgage come out of, whilst everything else is done individually. Essentially this has the same outcome as our current arrangement - although the bills aren't out of a joint a/c we do split 50:50 (always - they're direct debits).

It's only this year that we have opened a joint a/c - which we each put £20 a month into, to pay for a big party we're having later in the year. Apart from that we're completely separate.

I wonder about practicalities of starting small as suggested by pepitoincognito - what would be the next step for more joint finances?

ChablisLover Mon 10-Mar-14 16:53:48

Joint accounts for groceries only

Everything else is separate and we pay on a %age basis based on our net income. E.g. He earns more than me so he contributes more to the bills.

Seems complicated but is straightforward enough.

BrownSauceSandwich Mon 10-Mar-14 17:27:36

We pay all common essentials (mortgage, utilities, insurance, household maintenance, vets bills - all agreed at the outset) out of joint account. Each of us pays in a fixed amount each month, which could be based on one of three models:

1. Equal contributions - this is what you currently do. Works fine for housemates, or early stages of cohabiting couples.
2. Equal ratios - if you earn twice as much as him (ie: 2/3 of household income), you pay twice as much to common expenses (ie: 2/3 of total). You'd also have twice as much personal spending money left over, which might make him feel less like he's taking advantage.
3. Equal spending money - you work out total household income, how much is leftover after common expenses, and split what's left 50/50. This is ideal for a partnership where incomes are very different, but contributions to the household are equal. Eg: one partner earning the money, the other SAHP.

My husband and I are on strategy 2, which works perfectly for us at this stage of our lives. We both work FT in similar jobs and do equal shares of household management. He earns a bit more, for a more stressful job, so he contributes a bit more, and has a bit more left for himself. I wouldn't swap, so I reckon it's probably fair enough!

ilovepowerhoop Mon 10-Mar-14 17:32:32

we have all money in the joint account - all bills and spending come out the account. We trust each other not to go spending on silly things and if it is a big purchase we will discuss it first e.g. new tv/holidays, etc. We do have a sole account each but not much money on them. I used to get the child benefit paid into mine but dh earns too much now so we dont get it any more. Dh works but I dont.

WillieWaggledagger Mon 10-Mar-14 17:43:58

when we rented we each paid a proportion into the joint account for rent/utilities/food etc. proportion was related to amount earned (he earned more), but he also paid in more because my commuting costs were considerably higher than his given that we lived very near his work. he did have more spending money than me and was able to save, but he tended to pay more for holidays and meals out etc

once we bought a house and so had a joint large asset, we switched to brownsauce's equal spending money method - everything into one pot (the JA), and we each take out the same amount for our own clothes/hobbies/socialising/non-joint gifts etc.

this coincided with my salary increasing to the same as his, but this was coincidence; we would probably have done the same anyway. we both work FT

joint expenditure comes out of the joint account, so as well as mortgage/bills/food also joint socialising like meals out

it seems to be working well. i like to have the privacy of my own spending for things like his christmas present so keeping that separate works for me

WillieWaggledagger Mon 10-Mar-14 17:47:54

we don't have children and aren't married btw, but if we did have children and spent anything on them it would come out of joint spending

we have savings in our own names, but as long as we are still together we consider them joint when we look at the total of our savings. obviously not if we split up

Suzietwo Mon 10-Mar-14 18:19:12

We have totally separate finances. Un married w 2 children. House in my name only. Works for us.

justwondering72 Tue 11-Mar-14 18:34:34

My sis is in your situation , living together, stable and no kids. Her DP earns a lot more than she does. The way they work it for treats us that she tells him what she can afford , and if he's happy to match that, fine. But if he wants to go for something more luxurious then he pays the difference for both of them - like a bigger hotel room or a more expensive meal. No idea if that would work for you.

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