The fairest way to split household bills?

[stripesew]

DP and I currently live in a rented flat and go halves on bills. We are due to move in to a mortgaged house soon and I’m wondering the fairest way to split bills, as at present I am left with a lot more money after bills than DP.

The joint household bills in the new house will be £2300 (including food shop). Our total joint monthly income after deductions is £4630 (this is due to increase slightly in April’s pay but not sure exactly what to).

My share of the earnings is £2550 (55% of household income) and DP earns £2080 (45% of household income).

At the minute our salaries get paid in to our own accounts and we transfer a set amount in to a joint account to cover bills and groceries (both paying the same). We pay our personal bills and petrol from our own accounts.

Should we:

Option A) pay appropriate percentages of the joint bills (ie I’d pay 55%, which is £1265, towards bills and DP would pay 45%, which is £1035) this would obviously leave me with £230 more leftover than DP per month

or

Option B) pay both salaries in to joint account, pay all joint household bills from this leaving £2330 leftover and we both split the £2330 down the middle meaning we both have £1165 of our ‘own money’ at the end of each month

Open to suggestions of any other options!

We do the percentage route, but slightly differently as we have it set up so we both have the same amount left over at the end of each month which we call our allowance. This is enough to save a bit personally each month and splurge out on stuff too. The higher earner puts more into family savings pots.

If anyone earns a bonus that's theirs to do with what they like. If anyone ends up spending quite their allowance on kid shit or stuff for the fam they get a top up from one of the other accounts.

Are you married? If so- why not view all income as the household income and jointly decide where all money should go? Are you a team or just flatmates?

@Beansandneedles that sounds fair! Whilst I’ve been left with quite a bit more leftover while renting I’ve saved pretty much all of it.

So would in our case, would this look like paying the percentages (55% in my case) and then saving my extra £230 per month and then that way we are still walking away with the same each month?

I feel like I can be trusted more to save and not dip in to it than DP!

Do it the other way round. Give each of you a thousand pounds and everything else goes into the pot. When the saved money hits 6xmonthly expenditure, you can use whatever you save beyond that for household treats.

@Jellyx we aren’t married, no. I am better with money than my DP so I think option B would potentially pain me knowing that I earn around £470 more and that half of that would be going to DP to potentially fritter away!

Can you work as a team and teach him about managing finances? Agree that each other has X amount they're 'allowed' to fritter away and just have it as part of the budget?

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Yeah basically. We have a few different savings accounts and are each the account holder for different ones. Theres a disaster fund, long term dnt fund, ah fuck it why not fund. Works for us.

@Jellyx if I’m honest we don’t have great conversations about finances. It stresses him out and he more or less shuts down and prefers for me to just do what I think is best. Before we met he was in a very low paying job and only had around £300 left at the end of the month and I honestly think he is still in the mindset of feeling skint all the time (even though he earns a lot more now).

We are great about communicating about everything else but this is a sticking point!

Thanks @Beansandneedles, we are similar at the minute with our different monzo pots. We have recently set up a joint monzo account with a few joint pots.

I think this may be the best way forward for us as then we will both have the same amount of ‘fun money’ at the end of each month whilst still saving

I know you're not married(yet) but one of the number one causes of divorce is conflict about finances.

You're now in a financial arrangement together (buying a house!) - so I'd recommend doing the hard work and getting on the same page about finances.

We did the percentage split for the 7 years we lived together before children, it meant that sometimes I had a bit more money and other times he had a bit more.

Once children came along we do equal personal spends after bills are paid, I earn about 10k a year more than him at the moment but we both end up with say £500 each after putting money into the joint account for bills/food. Once we had children it seemed more of a 'family money' situation

You could set up extra 'pots' like car to cover MOT/service repairs 'chrisas and birthdays' 'holidays' 'home improvements' 'savings' and then less worrying about him frittering away your money

Pay all of the bills. Then each have £500 a month to spend then the rest goes into a savings account for extra expenses or to buy new things for the house. You have £500 to save or spend as you please, DP has £500 to spend or fritter as he wishes.

I’ve been with my partner for 15 years and we sort the money just like you do currently OP. I feel like essential bills should be 50/50 - it just seems fair to have to pay equally for essentials like water, gas and your roof over your head. Treats/days out/extras are then usually funded by the higher earner in our house.

We pay bills proportionate to what we earn, calculating it so that we both have roughly the same disposable income left over.

We get paid into our personal accounts and transfer our portion of the bills/mortgage into a joint account (inc some into savings at the same time).

This means that I pay out around £1000 per month more than DH but this feels right to us. It would feel odd for one of us to have more money than the other.

You really need to be able to talk about this properly. What happen if you earning gap increased a lot or what happens if one of you become infirm or gets an inheritance. What about bonuses.

What happens if you split up or have kids

You NEED to talk about this stuff.

In your case I'd keep the extra money but spend it on joint holidays.

We’ve done it all ways. When he moved in with me I asked for half the rent and a bills contribution. Then we rented together and we split the bills 50:50. Then when we moved to our first mortgage split by salary %. Then when we had children put it all into one pot and kept £400/month each for our own spends. (Clothes, presents for each other etc). Each method worked well for that stage of life. But communication was key.

We do a variation of B. All paid into joint account, we each take £400 into our own account as 'fun' money, then what's left goes into joint savings.

I'd agree, but sometimes it takes a long time. You're both adults and have to work together on these things. My husband and I have been together nearly 10 years, married for 5. We own a house and have two children. We traditionally handled finances in very different ways. I'd say we finally got a hold on our finances this year. I tried things his way, we tried a middle ground and now we're doing things my way and the savings are finally growing. It's taken me that long to slowly change the course of his financial river. Had I done it earlier we could be in such an incredible space right now. But I'll settle for now rather than never!!

Another thing to take into consideration is the deposit have you both put in 50% or is it different amounts? If it's not 50/50 then that needs to be taken into consideration and make sure it's tied up legally should you split

I would probably look to have a higher % of joint money so that it can cover unexpected things and you can have shared savings as a bit of a buffer for house related things.

Every set up is different... I'm on my second time round as is DP we have 2 kids each and one together so our approach is different to a non blended family. We've never argued about money, DP does have more disposable income than me, although i can make mine go a lot further! It's more complicated for us as we have our own houses with different levels of equity...

Yes the house deposit was 50/50 and I still have £30k in savings (which will be treated as joint savings for things like furniture, emergencies etc). We will build up some additional joint savings too.

This probably seems like a drip feed, apologies, however we are expecting a baby later in the summer. I have factored in ‘baby costs’ to the £2300 bills however now I realise it would probably be more sensible to both be left with the same amount at the end of the month and save a bit more.

I have money saved specifically to fund the lower/no pay part of my maternity leave too

OP in the kindest way you're not married so your £30000 is YOUR money and shouldn't be put in a shared pot. Great to have as an emergency fund, but it's your emergency fund.

Make sure you also split any mat leave finances and it's not just left to you to fund. Maybe your £230 can go into the mat leave pot. Don't forget anything that's put in place now will have to be implemented should you reduce your hours or become a sahp (which id strongly advise you not to if you're unmarried).

The mortgage should be split 50:50 as should any notable home improvements.

I would make paying into savings a 50:50 joint "bill" too.

Then the rest of the bills do the 55/45 split.

I would save the rest of your higher left over money in your own account.

Saving to cover your mat leave and future nursery bills is going to need dedication from you both.

As your DP is crap with money what he's left with for "spends" needs to be a level where if he blows it every month does not cause resentment.

Thank you @WoodBurningStov, he doesn’t have access to my savings and I’m very sensible with my money so would only allow it to be spent on things that we actually need and can’t finance from our leftover ‘fun money’.

I won’t be reducing my hours so will continue working full time.

@RandomMess that makes sense. To be honest I’ve maybe been a bit harsh saying he’s not great with money. I think because I’m quite strict with my money, anything less than my standard of money management seems a bit rubbish to me! Up until recently he was spending quite a lot on going to the football etc however he knows this will have to be scaled right back due to not having as much money and also the baby coming.

I think it would be sensible for us to perhaps both be left with, say, £800 a month for ‘fun money’, petrol and personal bills and put the rest in to savings.

I think it’ll take a bit of trial and error to see what works best