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?

You need to get married.

I absolutely would not be doing this because it means you won't have access to your own money. You have no idea how he's going to be about sharing his personal money. Even if you have free access to his accounts he can still see what you're spending and comment on it if he's going to be like that.

My maternity pay was pretty standard, my husband took over all household bills and the mortgage. My MP was my own to spend. I have a few bills I pay like phone bill, pet insurance and car insurance.

What a worrying time. Especially the guarantor situation.

I assume he has a general sense that a new adult is now contributing to the household so their income is all ‘spare’. No thought to the reality of trying to live on that little money.

Where are his debts from? Why does he think he can now start paying them off? What is changing? Is he ready to live thriftily now? Do you have his existing child? What’s his attitude to being a father of that child?

You have debts too. Why not prioritise them?

If he is supplying your housing you do need to contribute. Half bills inc food and half the baby’s costs are going to take up nearly all your MA though. I’d be putting £500 into that family pot in your situation. His plans to pay off his debt are irrelevant to that. If the extra help with bills helps him with increasing payments then great, but anyone who has built up that level of debt and only pays the minimum tends to be poor with money.

Don’t give up work. He cant afford to support the life he already has let alone a 2nd family.

As others, not being married here is absolute madness, sorry.

We are married, but aside from splitting all household bills we keep our own spending money so I can tell you what we did (we earn about the same though so no unfairness)

For maternity we worked out what all our household outgoings were first. We then added my SMP to his salary, and removed the amount we needed for household bills and essentials. The remainder we split between the same amount of 'pocket money' each and our joint savings account. When SMP stops then our joint bills and pocket money will come from his salary + those joint savings.

Personally I would say his debt and Child maitence should come out first of his own salary. Then both yours and his income goes into a joint account. You both get the same money each month for "personal fun money" and then you use the joint account for joint food shopping etc. then what's left you split for your own savings.. he then can choose to over pay his debt. I wouldn't be letting his debt become "family money" unless your married and have a chance to take back 50% of the house equity etc if you split.
Currently he is suggesting you save nothing, whilst paying off his debt and mortgage and then if you split you have no savings but he has reduced his debt and also has a property he owns! You need to have some of your own savings. He needs to understand maternity leave isn't leisurely being off work and you shouldn't be expected to be the one who is penalised for this by having no money of your own to spend.

"Although I don't believe it makes sense for me to be saving whilst he is incurring interest charges for the debt"

If you were married then ok. But in this scenario this is absolutely not your responsibility and you should not be contributing to his debt imo.

You need your savings.

Even if your partner manages to reduce the debt payments, he doesn't really earn enough money for you to be a SAHM.

Whole situation needs a rethink.

He wants to use you as a cash cow to pay off his debt, while you have to give up work and significantly reduce your income and career prospects while you have his child?

he's showing you who he is.

Agree!

He wants you to pay off his debt when you’ve known him for less than two years and he earns enough to have been playing that off more than the minimum: Absolutley not. You would be crazy to do that. Lots of good advice already.

Do not give up work in your circumstances

The debt is barely under control if he's only making minimum repayments. You paying it off when you're the lower earner with no/fewer assets is crazy, and it's even worse that he's asked you to do this on maternity leave.

Your idea of continuing to pay proportionally excluding the mortgage (I think about 17% for you on MA) would be much fairer and has the advantage that your partner has already agreed to that set up because you do it now. Also, check you will be splitting childcare fees proportionally too when you do return to work.

It does make sense to have savings while you're partner has debt because he isn't sharing his assets, and his idea of 'fair' is a set up where he controls all of his income and all yours too.

It's god he wants to pay off his debt. You should together write down his and your outgoings, allocate amounts for food, travel, baby expenses , the amount he wants to put on his debt. Then see what disposable income is left and split it.

So for example

Bills 1000
Expense (food etc) 1000
Debt 500
Total 2500

His earnings 2300
Yours 750
Child benefit 100
Total 3150

Leaving 650 disposable income so £325 each pin/save money

You could either open a joint account so everything is in the same pot or keep separate accounts and make a list of the expenses that come from his account and your account. So for example

Dp account
Earnings 2300
Expense 2200
Remainder 100

Your account
Earnings 750
Child benefit 100
Expenses 300
Remainder 550

So in order to have £325 each you would pay £225 into your dp account.

These are examples obviously.

Also you need to think about your pension. do you both have pensions? If you stop working will your pension stop?

If you become a sahm you need a private pension.

Also you need to check national insurance credits. You get them during maternity but not sure after that. If you don't get them you will need to pay voluntarily to be entitled to state pension

So you wouldn't have any personal spending money at all and would rely entirely on handouts from him? That would be a massive No from me.

And as everyone else says, don't become a SAHM or even go part time after maternity leave unless you're married. You would be making yourself financially vulnerable.

Why has he got such a large debt? Has he been transparent about how that happened?

You are in a vulnerable position and he is taking advantage

You are putting yourself in an incredibly vulnerable position.

It doesn't sound like you can afford to be a sahm in your current situation. And definitely not if you are not married and only together for 18 months.

You either need to get married and see if you can afford being a SAHM after pooling in all your money, or you need to return to work and split the childcare costs.

No. Do not do this.

You know what will give you more money if you want (which I wouldn't advise) to stay home longer?

Not paying off his debt, and saving the money instead.

If he's contending that you can live off 160/month, then that 740/month gives you 3x the maternity leave (of course you can't live off 160/month though - that's ridiculous).

If by his plan he still has 600 left over, then he should use his money to pay down his debts, not yours.

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

Oh stop with this. The guy had sex without a condom, he's responsible for his actions.

He's quite keen to share his other responsibilities with you tho, isn't he OP? Not so much his privileges.

Partnership? Not when it's all on his terms.

@ana32 - under no circumstances let him take your money. You are not married. You have zero rights beyond child maintenance when this prince among men leaves you high and dry. Run don’t walk away from him - take your baby away from this loser.

No, no, no.

Do not become a SAHP if you are unmarried, and do not combine your finances and start paying towards his debts. If the relationship breaks down you have zero rights - he can sling you out with no notice and he'd be left with his secure house and a reduced debt that you've been helping him pay off. Meanwhile you're homeless, jobless and left holding the baby.

His debt is not under control if he's only making minimum repayments. Whilst it's sensible to want to pay it down, he can't have it both ways - by expecting you to treat his debt as a shared responsibility but also keeping his mortgage out of the equation so you have no claim on his house.

In your shoes I would keep your finances separate, ensure that you have childcare in place to go back to work - which should be a shared expense - and focus on making sure you can manage financially on your own if push comes to shove.

If he is in persistent debt (which it sounds like) then there is a big chance the credit card limit will get cut after paying it off. You could be left having reduced your debt but not having any spending power.

also don’t pay off his debt, it’s his not yours

This. OP he is using you. I suspect he is only supporting the idea of you becoming a SAHM because he has no intention of chipping in to nursery fees.

Please do not put your maternity allowance against his debt you will ne left with extremely little, plus he claims he'll cover stuff but how long before he's raising an eyebrow at costs of baby clothes and toys and suggesting you buy these out of 'your money'.

If he wanted to truly share finances and support you he'd have asked to marry him, sorry

Wow. What a mess. DH and I are married but he's never suggested I pay off his CC bill. That's insane.

Number 1 to do is get married, and if you don't, give the baby your surname.

I would personally pool resources but the fact that your DP thinks it's acceptable to ask you to use your MA to pay off his debt is worrying. I know it doesn't matter where the money comes from but the household income would be significantly reduced. And what happens when you want to go out for coffee or to soft play? Will you need his permission to go?

Don’t marry a man who is happy for you to £160 spending money while he has £600.

It does make sense to have savings while you're partner has debt because he isn't sharing his assets, and his idea of 'fair' is a set up where he controls all of his income and all yours too.

Also, if you split and you're not married, you have no right to anything much in the way of "marital" assets. He would have to pay CSA for his child but that would be reduced because he already has a child.

So you'll need your savings.

Agree with this, it’s basically pooling all your money and allocating it to bills, food, household essentials (cleaning products etc), baby essentials (nappies, wipes, milk, equipment, clothes, this also needs to include what you’ll spend taking care of baby eg travel and baby classes these are NOT your personal expenses), an equal amount of fun money each, then savings then debts.

What he is asking you to do is basically pool all your money but then he is deciding how much is allocated to each expense when you both need to realistically look at how much things will actually cost then what is left gets paid off the debts.

Personally if you’re pooling incomes I’d want some protection over my finances. I would never pay someone else’s debts or mortgage without something in place. Get the house put into joint names. Do this before your income drops on mat leave. Also have your own separate savings account and save as much as possible before/during mat leave. I’d also carefully consider reducing hours after mat leave, ensure you can still save and contribute to a pension.