Splitting Finances

[Lydiaz]

DH and I currently put both our wages into one account and all are outgoings come out of that. Sometimes though, finances are a bit of an area that perhaps causes some resentment.

So, if we didn't pool everything into one account and we kept our finances separate, what is a fair way of doing so?

For context, DH earns significantly more. He does have more outgoings, however. I work PT but do so to look after our child three days a week.

We aren't likely to change our current set up but just wondered what it would look like if we did. Not sure if there's an element of BU in here or not but wasn't sure where else to post.

I would work out all the essential household expenditure & divide it proportionally. If your dp earns 3x what you do then spit outgoings 75/25.

Loans & credit cards should be paid out of what's left, unless the purchase was for the household. Car loan us a bit like that- if one person wants to splurge out on a top of the range motor when a cheaper option is still adequate then that person pay the repayments

We have all joint bills coming out of joint account. We each transfer in a set amount at the start of the month (was 50/50 now i out in slightly more as i earn more). Rest stays in our own accounts and covers our personal bills and spending/savings etc.

We are getting married next year and have an 18month dd, we will never fully vombine our finances

What percentage would be fair for him to put in to joint finances and what percentage would be fair for me to put in?

How do I work it out if it isnt a standard 50/50 split and is anything other than 50/50 unfair?

Would I be correct in assuming your DH feels resentful very probably because in his view is he earns the lions share but doesn’t get to spend what he sees as “his share”?
If this is his view then he obviously doesn’t value your contribution to family life and doesn’t see that you working part time to look after your child enables him to earn that money so that’s a problem.
On a practical level we find the easiest way is to put all money in the joint account for all household expenses and split what’s left in to our own personal accounts.

As you're effectively working unpaid when looking after your child, I think it's very hard to find a fair way of splitting finances that doesn't penalise you for doing so. Assuming you're both happy with that decision?

Of course if I was wrong on that assumption I apologise but I think you need to sort out the reasons for any resentment as well as a practical way for you to split money.

IMO it's only fair to keep your finances separate if you both work full time and have equal housework and childcare responsibilities.

We don't have a child but we put the same amount into the joint acc each month for bills and then the rest is kept separately in current accounts

He needs to contribute at least three times as much money as you do, since he earns three times as much. You could also argue that since you are contributing the bulk of the child car (and, I guess, other household duties), he needs to match that by his financial contribution.

But also, you need to consider the impact of separate finances on family life. It's no good if, for example, one person can afford lovely luxury holidays, but the other one can't, because presumably you want to holiday together. Or even if one of you always wants to go out to expensive restaurants, but the other one only has the budget for a McDonalds. I think separate finances only really work if you are both prepared to (a) be generous and (b) feel a bit hard done by. Otherwise, you're better pooling it all as 'family money' and letting it go.

If we actually split 50/50, I'd be £130 short putting towards joint outgoings. Would also have an additional £150 personal outgoings that I couldn't afford to pay. So I'd be -280.

We have never had joint finances/accounts and never will! We are responsible for certain bills each, eg I will pay the electric bill, he will pay the phone bill. I pay for the TV license, he pays the window cleaner. Spread out over the length of a year it works out equally.

I wouldn’t take the above approach. I would:
Pay all income into one account
Work out all fixed outgoings (mortgage, childcare etc)
Agree an amount for joint savings (maybe short term for Christmas / insurance / holidays and long term for house improvements / possible boiler replacement)
Budget for all other outgoings (together - agree how much you want to spend on food / petrol etc)
See what’s left and divide between the two of you for personal spending. This might be £40 a month or £150 a month. If it’s lower then you expected then look at the above steps and see ways to save there. If it’s higher then you need then save more for holidays.
This way you both have equal personal spending power and can chose what you do with it.

How much more does he earn? What are your joint and individual outgoings?

I would always split it so you had the same amount of disposable income leftover which I suppose is the same as pooling resources. I mean, how can you be someone’s life partner and expect them to have a lower quality of living than you?

When DH and I met I earned twice what he did, now he earns much, much more than me. But I can’t travel for work or take jobs far away and have to favour softer, fuzzier companies which give me the flexibility to WFH if my 11yo is ill and allows me to be home every weekend. I still work way more than full time but if I went full on career focused I’d be on the train to London at 6.30 every day and would never do a school run.

All this to say that I think sharing resources compensates me for all the behind the scenes running of our family I do (including organising finances) because I couldn’t fly to god knows where mon-thurs, or be on calls until 9pm like DH often does.

I don’t think I’ll ever catch up on pay now and that’s fine by me as we are a team and I know I’ve always pulled my weight. Ever since we decided to be a family everything has always been ours. We even make sure our pension contributions are even!

I would do the same as mustardseed

The issue is presumably thay you would each le to have some spending money to use as you like without justifying what you have spent it on.

Add your wages together, deduct off the outgoings, some savings etc (don't worry about how it is split) and see how much is left over then agree an amount that you each transfer out of the joint account each month to spend as you like. Depends on how spendthrift you are but you could have £100 each a month or however you decide.

I think the main issue is that there isn't any left over for us to have some money for ourselves. We can't even afford to put any in to savings at the moment either. DH still contributes to his pension via the workplace pension thing but I earn so little now that the £20 a month that used to go into my workplace pension before I went PT is now £0.

Before having a child, we had enough left for a small amount of savings and a personal allowance of £100 a month each. We have none of this now. Even the £100 a month each wasn't quite enough to cover hair cuts, clothing, birthday and Christmas presents, etc.

In that case you need to factor this in to how finances are split so that together you're saving and also have enough to create a small pension for yourself or pay in to your workplace pension. This could otherwise leave you vulnerable should you spilt further down the line or should be become financially controlling. You'll end up with little income in old age whilst he will have much more.

If he earns more because you are working part time to look after his children, don't split your finances! Unless maybe you agree he will pay you an hourly rate for all the work you do in the home...

Are you living within your means? Is one of you spendier than the other? Is there an area that you know you’re overspending in? This isn’t a case of how to share finances, it’s a case of ensuring you have enough income to cover your outgoings.

If there is no money left over you have to both accept this or look at ways you can cut back on expenditure or earn more. This is often the reality of having a child in the years where childcare is necessary. Do the sums work if you go back to work full time and pay for childcare? Are there things you can give up/cancel/cheaper options? Are either of you spending unnecessarily? A friend of mine was amazed when she realised she was spending nearly £200 per month on coffees and lunches while at work. Go through spending thoroughly and see if you can make savings.

Are you missing out on an employer contribution to your pension because you’re not contributing? The law has changed on this and your workplace should have offered you a pension unless you’re on a very low wage.

For context, DH earns significantly more. He does have more outgoings, however. I work PT but do so to look after our child three days a week.

Tell him if he wants a 50:50 split, then you either need to go back to work fulltime, or you dont

If there's no money left at the end of the month then it doesn't matter how you split it!

What's the real problem here OP? Is he putting pressure on you to work full time and you don't want to? Or is he happy with the idea of you working part time but pissed off with the reality of it (ie less money)?