There is a common misunderstanding – in my opinion - that often comes up regularly on Mums Net around fairness in finances. It makes the mistake of mistaking equality and equity.
Equality states that the fair thing is to split things equally: bills, food, mortgage, etc. split down the middle. It’s fair surely as everyone is paying the same thing?!
The trouble is that doing that doesn’t allow for reality or nuance. It speaks only of money. It puts money up there as the most important, and really the only thing that counts. In doing that it puts the higher earning person in a relationship in a stronger, more powerful, and ultimately unfairly advantaged position.
Equity in a relationship understands that money is not the only thing: that some work less, earn less, but bring other things to a household, to a relationship and family. Childcare for example. It is about creating fairness and support. (It also realises, what many try to hide, that earning more doesn’t actually mean very much. It doesn’t elevate that person or mean that they work harder or are better than someone who earns less. Generally it isn’t a signifier of anything other than that that person is in a well-paid area).
Equity says that money should be pooled not split. Person A might earn £60k a year and person B £35k. But that shouldn’t mean that person B ends up with less. They both put in what they earn and then they decide how to manage that. You might save some jointly. And you might divvy up the rest and each take that as your own (to save or spend as you wish).
Here’s an example of each, (figures made up) with person A earning £3,500 a month after tax and person B £2,500, and their monthly outgoings on shared expenses (bills, mortgage, food etc.) being £3,500:
Equality: Both put in for half the bills, so £1,750. After shared expenses, Person A has £1,750 remaining and Person B has £750. Person A has an extra £1000 more each month to do with as they want than person B.
Equity: Both pool their money, with £6,000 going into a pot. From that pot £3,500 goes on fixed monthly outgoings. Of the remaining £2,500, £1000 goes into joint savings (holidays, house, etc.) or joint spending (days out etc.) and each then take £750 for their own.
I know which I think is fair.
I often wonder what happens in relationships when things are done based on equality (split half the bills and keep the remaining). Does the higher earner get to go on more expensive holidays? Do they wear better clothes and go out more, while the lower earner struggles? It seems bizarre. Surely a relationship and certainly a family is about love and support. Why create a divide? My money is something I earn for the family, as is my partners. We don’t view it separately, we work to survive and to have a shared and happy existence as a family. We share the joys and we share the burdens.