Unsettled with DH’s disclosure of income

[ParisianLady]

I will firstly acknowledge that this is a good problem to have but it has been on my mind. I know I might get flamed but I can’t talk to anyone in real life about this.

Essentially I asked my DH the other day what he earned/made last year, and the answer was much higher than I expected. He doesn’t even know the exact number and went off to find out.

We have a really very nice life, 3 kids at private school, lovely house, lovely holidays where we fly premium or business, parties for friends and no money worries. I grew up in a more modest environment so this is wonderful and I know how lucky we are.

I work full time in a really stressful job for my own enjoyment but it is well paid and I enjoy having my ‘own’ money and sense of achievement. I do the usual frugal and sensible things like buy second hand school uniform, buy big packets of meat and split them, put the dishwasher on at night on the cheaper rate, shop of bargains. But I will fairly spend freely on things we need or just want.

My DH recently asked if I could pay for some building work, and when we needed a new car I bought it myself (and was proud and happy to do that). He’s generous but it felt fair for me to pay for these things myself.

Somehow if feels a dishonest by omission of him not to have said what his business was making. I knew it was successful but am just shocked. Not that it materially changes our nice life but why did I pay for the building work for example?

He isn’t hiding anything, he just didn’t think it was worth mentioning and I didn’t ask. But it just doesn’t sit right. Does anyone have any advice apart from ‘talk to him about it’. It’s made me re-evaluate lots of our recent decisions

why are people perplexed by the second hand uniform thing? Private schools have second hand unform shops, the kit list is usually huge & kids grow out of stuff in no time at all. It's completely normal to buy or swap from the shop.

Do you have access to bank accounts?

That would be the main thing for me
If you don't - just ask to be added , if he is honest he will not have an issue with it

I am not sure what kind of money we are talking about but if I were you and the difference would be so big I would feel…weird
Especially after asking for paying for building works.

So as well as the three lots of private education, lovely house, business class flights, no money worries, the OP now drops in that they have a wealth manager and she's still surprised her DH earns a lot of money.

Next she'll be telling us that she knows someone who only earns £100k pa and doesn't know how anyone manages on so little.

How oblivious to the real world can you be?

Because it's one of those paradoxical British class indicators which seems totally counter-intuitive. Rich people with children in private school don't need to prove their social status to anyone, so the cultural norm is to wear your wealth very lightly and to be performatively frugal. As you say, it's considered gauche and rather crass to be in new items because it suggests that your money is new.

At the other end of the scale, people who have grown up in poverty or are really struggling financially don't have the same security of status. If they look poor or shabby they will be actively discriminated against and in this context new clothes are a way of signalling to a very judgemental world that you can take care of yourself and your children.

When I went to a private school many moons ago it was also quite hard to buy uniform from the shop that supplied it. You had to make an appointment, but they were only open 9-5 weekdays, and both my parents worked full time. If I needed any new uniform I would go to the second-hand shop at the school during my lunch break and the cost would be added to my bill.

My children attend/attended l independent schools and second hand uniform just not a thing at their school.
It would be considered very unusual.

I’m actually not shocked! All the families I know with 3 figure incomes all use second hand clothes. My son’s primary has a lovely second hand uniform area - a mum volunteers to wash and iron all the donations- you can pick things up for a couple of quid perfectly pressed off the rack.

Also the mums are wearing second hand too. The Naice area of my city has one designer clothes boutique and two consignment shops!

The profits are not the same as his own earnings so don’t get carried away he might not have as much as you now think and he might have needed to invest the profits/cash made back in to the business.

I think whether it was fair you paid for the car and building works depends on what he has paid that you haven’t. It sounds like he is probably paying a lot more than you in terms of the school fees so likely reasonable

That’s absolutely right. Funny how things work isn’t it?

• i am actually a director of the business

Then you have legal responsibilities that you are not fulfilling by being so passive. And presumably you are receiving dividends too.

The money in the business may have already been taxed (corp tax) but withdrawing money as a high earner will make your DH liable for huge amounts of additional income tax as well. We have left a year’s worth of DH’s salary and dividends in our company (I am no longer a director and don’t take anything out due to my own earnings) so that he can take time off from work in future. Money in the company isn’t your husband’s (or yours) until it is withdrawn.

DH and I are not wealthy, we have enough to meet our needs. Finances are discussed generally every couple of months generally. We do not go into detail, just how much savings, keeping an eye on regular outgoings, making sure neither of us feels resentful over what we each pay for plus what goes into the joint account. The conversation is casual when having a cup of tea or walking.

i promise not a stealth boast

Of course not, dear. As my mother used to say, "I believe you, thousands wouldn't."

@ParisianLady why did you sign as a director of the business and then not engage with it at all?

Well, I know the first half of that answer. You signed as director of the business so that as a family you pay less tax. That's fine, the perk is available so I fully respect you using it.

What I don't understand is you coming along to complain that you don't know anything about the financial situation, when it turns out you're a director of the business! Unbelievable.

How about you pull your finger out and actually inform yourself of your responsibilities and the business for which you have official responsibility?

It sounds like you are annoyed that you had to buy the car and pay for the building work now you’ve found out he has more money than you thought, but are trying to convince yourself you don’t mind. Proud and happy to buy your own car? Holy moly we live in different worlds! What do you think most other people do that don’t have wealthy husbands!

I understand not sharing finances if it is a marriage later in life, with step children involved, or if you don't plan to have kids at all.

To me, it still seems strange not to have completely joint finances if you have three children and a household together with a family and a home that is completely shared. I know people do it, but to me it seems more natural to put everyone's money in one account and think of it as family income, not as one person's and another person's.

I think your confusion and surprise come from this dissonance- one part of your brain naturally thinks everything should be shared completely, even though that is not how you have chosen to live.

I think for women it’s really important to know about the finances even if you aren’t “in charge” of them. I would want to know what your husband draws out of the business and also his profit share, and have full transparency over income and outgoings as a family. Otherwise you are vulnerable in the event he becomes unwell or you split up as you won’t know how much your lifestyle costs or what assets and income you have.

So what happens to outgrown uniforms?

The other factor is that private schools uniforms will probably be better quality and have logos and be of a colourway that's unique, so not plain grey/black/blue that can be sent to the local charity shop and bought by anyone.

So it stands to reason that it's bought and sold second hand where possible, because why wouldn't you? It's indistinguishable from new so I don't even understand the 'status' argument.

The 'new clothes' period from recent history was an anomaly. Before fast fashion and consumerism, almost everyone bought and sold lots of things second hand, people advertised in the local paper, used jumble sales or had a stall at the school/village fete. It wasn't even overtly due to environmental concerns, it was just something most people did, which makes the oft said 'my Gen X/boomer parents are killing the planet' comments from 'young people' laughable and hypocritical because they exhibit levels of consumerism that appear very wasteful from our perspective.

I love how you’ve made your job sound OP. “Love having my own money”. Elsewhere you suggest you’re on at least £400k a year yourself (given the £180k per year tax bill).

Honestly not convinced this isn’t a massive wind up.

@EmeraldRoulette

I don’t receive any dividends from the business. At least not that I’m aware of, it wouldn’t make sense for tax reasons (or that’s what I was told at least)

I’ve been much too passive. I can see that now. He isn’t hiding anything but I haven’t asked and I’ve trusted it all to the accountants etc. I am going to take steps to remedy this.

There is no tax dodging. It’s all UK accounts, proper investments, tax paid fully as it should be.

Well, quite!

The way my son went through trousers and games kit, no way was he getting all new. Also some uniform stuff lasts really well and it's really not very good to not pass it or sell it on.

OP is bringing home something like £18k a month herself.

Yes, business income is not the same as salary/dividends, which will be minimised for tax efficiency. What's left in the business is there for your future. Your own income, OP, is more accessible in a way. If you wanted to restructure things so that he funded more of the big expenses now, you could sit down with him and work out the tax implications of him taking a higher salary/paying out more dividends etc to see whether the "swings and roundabouts" are worth it.

That was a one off exceptional year. I don’t earn that every year.

I have never claimed to have a low income, I’ve been clear that I earn well and know he did too. It’s simply that the amount is 3 times what I expected, but as others have pointed out money in a company isn’t money in the hand and I’ve been too passive, and will take steps to be more informed.

I don’t. I bring it lots but not that much.

That was a one off event a while ago, not annualised earnings,