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How do you sort out finances in a relationship?(31 Posts)
I've been with DP for 4 years but this is our first long term relationship for both of us so I'm just looking for opinions and ideas about the best way to do things.
When DP and I started going out, we were both students. We moved in together after 2 years. We currently have an arrangement where I pay for the food shopping and he pays the bills. Back when we were students and didn't pay council tax (and pre-recession fuel increases), this worked out at a 50/50 split. We are in a very fortunate position in that we don't have to pay rent or mortgage payments (DP's very wealthy grandparents bought him a flat).
Now we are both working full time, though I do a standard 9-5 and DP does 9-6 with an hour or so of work from home in the evenings. DP earns twice what I do (2.5 times what I earn if he gets his bonus - we're both fine with this as we are motivated by different things). As I get home first, I do all the cooking. I've also always done most of the cleaning as DP is quite messy.
Just wondering how finances work, especially if one person earns a lot more than the other. It hasn't caused any issues yet, though DP has suggested an expensive holiday later in the year. It's not such a big deal for him, though it is quite a large amount for me. So, do people split things 50/50, or as a percentage of their income? Do you take into account domestic duties when dividing up money? Would you have a joint account if you're not married?
Joint account, all monies in, bills, mortgage, saving etc come off, half each of what's left.
DH often earns more than me but I do more of the domestic stuff, so not going to start totting up 'that's mine, this is yours' . That way lies madness.
It really depends on you both individually, if it was me and ex in that position we wouldn't have a problem paying for the other person to go on the holiday, we were pretty open about cash and if one didn't have it and the other did, well we shared, ex did earn loads more than me as well.
Can you discuss this with him, if he is happy to subsidise you on this occasion, ie you pay for your holiday and he provides the spending money? You really need to say to him if you can't afford it.
perfumedlife - so you would have both salaries going into a joint account? Rather than just each paying in enough to cover bills?
Savings is an area that we disagree on. DP is not extravagant on a day-to-day basis, but put all of his savings a few years ago into a nice car. He intends to do the same again later this year, which I don't really agree with (we live in London, he would only use the car a couple of times a week). He argues that cars are his passion, he wants to have a nice one whilst he's young and DC-less. I would argue that its better to save for a rainy day or put it into investments for the future.
When DH and I first moved into together before we married we paid an equal amount into a joint account to cover bills, but that was fine because we both earned the same.
Once we got married this turned into all income going into the joint account and each of us taking out our individual spends for the month i.e. money for clothes, lunches and going out but the rest of it being joint.
I would discuss the holiday with him and say that you will find it hard to pay 50% and see where that takes you. It's great that you are discussing it at this stage, before you are married, off on mat leave and suddenly wondering why your DH expects you to pay 50% of the bills with your savings.
Yes op, because what's left is an equal split. If I paid in half the costs, same as dh, he would be left with much more disposable income than I, even though I do all the domestic stuff. How do we work out the value of what I do? I see what his is valued at, in his payslip, but who decides what my contribution is worth? This way seemed natural to us. And anyway, if we divided bills evenly, and I ended up skint and he wasn't, he would give me money. We are a unit.
We have worked like this since we moved in together, so it's not just since we married or had ds.
Well, not moved in together, but since we bought our first flat together.
DH moved into my flat before we were engaged and he gave me some money each week. Once we moved into a house together we got a joint account and everything went in there. We still have a joint account but I also have a separate account which dh pays money into so I can food us all and run my car. He knows what he has left and I know what I have to last the month.
Jobs wise we both muck in and do what needs doing. I tend to do all the ashing and cooking but on a weekend dh will put a wash on or cook if I don't fancy it.
As soon as we got married (23 years ago) we opened a joint account and everything goes into that - at first we earned more or less the same but I am now a SAHM - we are lucky because we have very similar views on money and have never 'argued' or fallen out about money issues (plenty of other things to argue about ) - we are both quite frugal and save a lot for pensions etc (boring) but I never feel I have to 'ask' my DH if I want to spend something on myself - likewise he doesn't have to 'ask' to spend on his hobbies. I know we are also lucky that we do not have to live on the breadline.
Sorry, rambling a bit but I would hate to be in the sort of relationship that has to discuss every bit of spending down to 'who earned the money'. Equally a friend of mine would automatically 'match' everything her DH spent on himself with a purchase of equal value - regardless of whether she wanted or needed anything - they are no longer married .
We have a joint account for all household stuff but keep other money separate - both of us have our own current accounts, which our salaries go into, and then we pay standing orders from them into the joint account. When we first married DH paid more in than I did as he earned more than me (a lot more - I was still a student), and I didn't want to make everything joint as I have extravagant tendencies and went overdrawn pretty regularly, so didn't want him to be effectively paying for that.
These days I earn a lot more than him so pay around twice what he does into the joint account, and I tend to pay for holidays etc (because when I worked in the City I got bonuses of £3-4K per year, and those nicely paid for a couple of holidays, so we got into that habit). Savings are in our individual names, but we view it all as joint and both know what's there.
Sorry, didn't mention housework etc - it's shared pretty equally, I think. Like the money, we tend to keep it separate: for example, he does washing, washing-up and fixing the computer and I do cooking, ironing and
shouting at negotiating with people on the phone.
Sorry, I keep thinking of more things. We have an offset mortgage, which is a joint savings pot (i.e. comes out of the joint current account), and we use that for things like the boiler breaking. Till we had that DH tended to pay for that sort of stuff as he has far more savings than I do (he's older than me).
Everything is in a joint account and we get what we want- luckily neither of us is extravagant. We discuss buying big things like holidays and decide if we can afford it. We both work, me pt but earn only slightly less than his ft plus I have had inheritance etc which I regard as ours.
You do not take who does what in the house into any financial factors.
If one earns more than the other the one who earns more pays more of the household expenses. Generally it should be that you both end up with the same left each to do what you want with.
Everything comes into and goes out of the joint account, and it has been ever thus. We used to give ourselves 'pocket money', but we don't have that luxury any more.
I think some sort of joint account is always the best idea. If one person is responsible for food bills for example there is invariably arguments about stupid things. I know couples who have simmering rage about who eats all the biscuits!
We had a joint account as soon as we moved in together. DH has always earned more than I do - although he had debts back then. 25 years on we have a number of accounts for various reasons and I have more in my accounts than he does. It's all very transparent though and we do know that it's all 50/50.
Been with OH for 10 yrs. Lucky enough that money is not and never has been an issue. We have never argued about money. We have children together.
We have separate accounts. I don't know what he earns and he doesn't know what i earn. This is because it is a non issue. Years ago we divided the bills in half - we still pay these bills. If a new bill comes up one of us takes it on (in turns). We take it in turns to pay for dinners out, cabs, gifts for others, repairs, new things for the house etc. .... For holidays one person pays to book the holiday the other pays for the spending money.
What ever you are left with is yours.
Kinda strange way to do things but it works for us.
Like you, we've lived together since we were students and don't have children yet.
We have a joint account and joint credit card for household expenses, and have worked out how much needs to go in every month to cover the mortgage, bills, food and other household stuff. We each pay half this amount into the joint account, and the rest of our money is our own to spend as we want.
I earn slightly more than DH, so I often 'top up' the joint account if extra money is needed eg: we pay for groceries etc on the credit card which is paid off monthly, so if it's been a more expensive month I put some extra money into the joint account. I would also pay more towards holidays (usually put on the credit card and paid off the following month). There are a couple of things I pay for myself instead of them coming from the joint account. We have individual savings accounts but the money in them is for joint things (we just bought a house so have no savings at the moment!). I'm planning to start a joint savings account for house repairs too.
If I earned significantly more than DH I would expect to pay more into the joint account so we'd have an equal amount of spending money, and I'd expect him to do the same.
We have joint accounts his wage goes into one of our joint accounts and the other joint account is for our tax credits. All bills, rent, CT, food shopping comes out of the Wage account and the tax credit account is for every day living. Whats my money is his money and whats his money is my money.
The thing I find strange about each paying in a certain amount and then the rest is left over to do with what you want is...if you're the richer partner, then your standard of living is much higher than your partners. I would find that very strange, wearing lovely clothes and eating sushi for lunch when my partner's shopping in thrift stores and making a cheese sandwich. Or if I'm socking away money in an investment fund then...what, am I saving for a future where he's poor and I'm rich?
So whether it's joint accounts all the way or one joint account and then private spending, it seems to me that if you're a unit, you should end up with the same amount of spending money as one another.
In your case, OP, I would want an agreed-upon amount going into the joint expenses, an agreed-upon amount going into savings, and then the rest split between you as spending money. If he wants to save up for a car with his part, and you want an extra savings account, fine, but it's got to start pooled.
DH and I have separate accounts, he pays things like mortgage, house/buildings insurance, council tax, water, etc....I pay for food shopping, telephone, broadband, Sky, that sort of stuff. He earns a lot more than me so will pay for holidays etc but we have a joint savings account that we dip into for major stuff (boiler breaking, furniture, car etc). We can then spend whatever is left of our own money on whatever we like.....him=eBay, me=shoes
It works well for us, we still class it all as a whole as 'our money'.
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