Splitting finances on maternity leave

[ana32]

Partner & I are struggling to agree on how to split our finances whilst I'm on maternity leave and interested to see how others would. Would like to have a large chunk of debt paid off by the time my pay drops to zero.

Background:

Been with DP for 18 months, not married. I'm 4 months pregnant. DP has a child from a previous relationship. DP has bought a home through a shared ownership scheme, I moved in with him. I earn 26k p.a. DP earns 45k p.a.

I'm employed but will not be eligible for SMP due to dates, should be eligible for MA which will amount to around £740 a month. I currently pay towards the rent & living costs (but not mortgage) in proportion to what I earn, works out at around 40/60 split. I have little outgoings, £50 debt repayment, £30 phone bill but nothing large like car insurance or finance.

DP has around 21k in credit card debt, but under control, and pays towards this each month. He also pays child maintenance in the region of £350 a month. Also has a car on finance, large commuting costs due to fuel. He is also a guarantor for his exes rented flat.

Neither of us have savings.

DP is proposing that we use the MA I will receive, to pay off a chunk of the credit card debts each month. Ideally 7k over the 9 months I'll receive it. Then use his money for day to day spending, rent, mortgage, utilities, food etc. His reasoning is that I will not be contributing to the rent so this is fair?

I think that we need to either pool money, or work out contributions proportional to our earnings so that we are left with a similar amount of money to use as needed. DP disagrees as he is the higher earner, have had to remind him I will be dropping down to a third of my earnings by staying at home.

How would you suggest splitting this so it is fair?

DP has also suggested that we instead each contribute £500 to his debt repayment. This will leave me with £160 a month, which my travel will also come out of.

To add, this will leave him with 600.

Do your income is going to significantly drop on mat leave but he wants to spend it on his debt?

I don’t get it. If your income drops, why will you be using the lower amount to pay off his debt?

Unless your money is all pooled so it doesn’t really matter, it makes no sense.

You have basically no financial protection as it is. Under no circumstances should your limited funds be going to pay off his debt.

Your suggestion is much more reasonable if you are truly a partnership where the role of both is equally valued.

Watch yourself with regards to longer term loss of earnings, earning potential and pension. If anything happens to the relationship you have no rights to any part of his house so you need to make sure you could cope entirely on your own if needs be.

@ShortScot He'd like to use the money to pay the debt off with the view of me not having to return to work after 9 months. Reduced repayments would allow us to free up the money to do this.

@Youmwarayoum I'm more concerned that I will not have ongoing visibility on how the debt is being paid off iyswim? Although I don't believe it makes sense for me to be saving whilst he is incurring interest charges for the debt.

Don’t do this. you wont be paying rent because you are giving birth to HIS BABY.

You are losing some of your own income and pension contributions and promotion chance while he loses nothing.

You have no legal rights to stay where you are , he could kick you and baby out without notice.

I hope you are going back to work full time aftre 6 months and splitting the nursery fees and pick up / drop off and all child related costs in proportion to your income. Don’t even think about going PT, its was too risky for you and baby.

How many children does he have with his ex and how many nights a week do they stay with you ? are you sure he’s paying £350/ month child support?

@Youmwarayoum I'm also concerned that whilst he is saying will manage day to day spending, I'm losing any sliver of financial independence I have left by relying on him to 'top me up' I suppose.

No, you do not pay off his debt. I'd very gently suggest you consider taking bare minimum time possible out of the workforce because you appear to be in a vulnerable position.

Do not pay off your boyfriend's credit card debt.

How has he come up with he gets £600 spends and you with a baby gets £160??
Hes got a cheek though expecting you to have hardly anything whilst paying his debt off,

Do not pay off his debt.
And do not become a SAHM.

If you do ever split, then you will have to walk away with nothing. While he gets to stay in his house with your earnings having paid off his debts. He gains significantly from this arrangement and you make yourself more vulnerable.

If you don't split, you loose all financial independence (to a guy with potentially not great financial accumen given his 21k debts). You are already in a vulnerable position, don't make it worse.

If you are paying off any debts they should be yours. And tbh, he should be paying for pretty much everything while you're on mat leave. Don't pay towards his mortgage (unless he's prepared to let you have a claim on the house), but other bills you could agree to pay proportionally wrt income levels (eg if he earns double, he pays 66% and you pay 33%).

And make sure you have enough that you can start having savings

If neither of you had any children before this baby, you should end up with the same amount of discretionary money.

Arguably, since he has a child, his support for that child should come out of his discretionary funds. Unless that fund is large that would be impractical, but that does set the general philosophy.

as an alternative to his proposal, he could pay you half of your lost pay during your maternity leave. Then you each pay your share of household expenses and shared child expenses proportional to income.

Remember that the costs of staying home, things like baby classes, transportation, etc, are all child expenses, not personal expenses. Maternity clothing, also a child expense, not a personal expense. those big giant pads to deal with lochia, child expense.

basically, his proposed financial arrangement is so ridiculous that it doesn’t even deserve consideration. He needs to massively readjust or you need to move out before the baby arrives.

DPs focus on paying the debt off is to reduce our monthly outgoings once my pay drops to zero at 39 weeks. This would ideally allow me to take longer out of work.

I agree we need to plough more money into the debt repayment however I believe he should be paying a higher contribution that will allow me to have some spending money each month. At the moment he is paying the minimum payment each month, we could (and need to) reign in our spending each month and allocate more to this.

I'm unsure of whether I would be better suggesting I save separately so I can continue to pay towards bills once my income drops to zero.

When you say "longer out of work" what do you mean?

I really don't think not working is a risk I'd be willing to take in your shoes. You are making yourself very vulnerable.

Does your DP have any shared parental leave benefits with his job?

Im currently on maternity leave, £160 will not get you far at all. One class can cost £10 at a time! Also, your boyfriends debt is a ‘he’ problem, not a ‘we’ problem. You should not be paying this off at all. You’ve not been together long and a baby puts a huge strain on relationships.

how much are your rent and general household contributions coming to at the moment?

You've been together 18 months and he has 21k debt. Why are you even considering paying off any of his debt?

You have no protection at all. It's his house. You're not married. He would rather leave you and a newborn without anything so he has less debt that he ran up.

Don't make yourself financially vulnerable with a newborn.

If you were married & want to stay at home after maternity, yes makes sense.

If you want to do this, get married asap (registry office in 3 weeks, any party can be lasted) + combine all finances & do it.

Absolutely do NOT do this if you're not married. Keep separate finances & explain that you will be contributing less to the bills than before & he'll need to contribute more.

If it was me I would want to get married and put all the money into the one pot . Then pay off the debt . It sounds like he is living beyond his means and with another baby on the way needs to be a bit more responsible financially .
I wouldn’t be keen to stay at home . Even some part time work would give yous a bit more money to make life more comfortable.

I say this on every maternity finance thread but it's particularly pertinent in your case. Your loss of pension contributions from being on ML and if you return to work PT, is a new joint expense and should come out of the joint pot. You should not be financially disadvantaged by going on ML. You need to work out what else is a joint expense and contribute a % based on your MA payment.

So he’s happy paying the minimum and having spends, but thinks you should sign up to paying more and having nothing or very little, why hasn’t he been paying more for months and months now? And let’s say this plan works, what happens in 9 months?you have no income, and he … gives you £100 a month for you and baby and tells you how generous he is? You need to go back to work. You can’t afford to be a sahm with this man. That’s a lot of debt and he should have tried harder to pay it.

This is excellent advice. You cannot be a SAHM if unmarried.

Personally (and I say this as a newly SAMH who loves it) I wouldn't take the risk of marrying someone who seems to be trying to use me to pay off debts with no awareness they're bad at money management and are leaving me in a really vulnerable position if we split. That doesn't seem like the actions of a responsible partner or good future husband!

Adding to the chorus of you cannot be a SAHM if you are not married.

I'd also say that you can't be a SAHM with this man at all if this is his idea of a fair deal. It is completely one sided and totally unreasonable. He is essentially asking you to pay his debts that you are in no way responsible for and survive on a pittance.

You need to return to the workforce ASAP and he needs to be paying bills on a 65 him 35 you split. This includes childcare. Do not agree that you will pay childcare while he pays the mortgage unless you are added to the deeds. The house is his so he needs to pay the mortgage. The baby belongs to both of you so you need to share those costs.

I’m assuming it was a joint decision freely entered into by both of you to have a baby.

If so, you are taking a financial and career hit by having a baby for both of you. That needs to be factored in to any decision over money.

You should not be in a worse position by having the baby for both of you.

It’s also hard to comment because you don’t say when and how his £21k credit card debt was incurred. Thats a huge amount to have racked up - did you have any part in it? If so then yes be involved in repayment but if it’s his fecklessness don’t touch it!

At the moment he is paying the minimum payment each month,

This is madness! You are both in need of some strong financial education.