To ask how you manage finances/divvy up money?

[MeSanniesareBrannies]

Cross post with relationships. How do you manage finances/divvy up money?

So, background info:

Me: 34, earning just over £60K (less than £20K savings). Unlikely to ever earn more than £90K.

DP: 32, earning £100K + bonus (also has £100K savings/deposit). Earnings upper limit impossible to predict.

My partner and I have been together three years, lived together two and just got engaged. He earns considerably more than me, has always paid for most things and is happy to do so. We’re buying a house (both names) and he’ll be stumping up most of the deposit.

We both work full time in fairly intense jobs, but hours aren’t crazy. We’re pretty even on housework (we’re both a bit rubbish, he possibly does slightly more, we have a lovely cleaner). No kids, but we we want them and I’ll probably stay home for a bit when we have them.

DP wants to chuck all our money (after savings and investments) in a joint account, have equal access and just not worry about it. Having read threads on here, it seems like there’s reasons not to do that? There’s lots of comments about making sure everyone has their own money, ‘ducks in a row’ and is contributing to the household according to income? If you’re long term married and happy with your financial arrangements, what do you do/would you recommend we do?

I can’t imagine ever having money based rows, but as it seems so common, I thought getting ahead of it might be good. All advice gratefully received.

[quote MeSanniesareBrannies]@MinnieMountain Completely joint. Are there concerns around this?[/quote]
There are 2 ways of owning a house, both are 'joint' but they work differently. It's not that there are 'concerns' as such about either option, it's just they are different and you need to choose one or the other.

First option is to own as joint beneficial tenants, this means you are both equal and common owners of the house. The benefits of this are that if one of you dies the other one automatically inherits their share of the house even if there is no will, and also even if the deceased person has unsecured debts (credit card bills or loans etc) the creditors can't come after the house to settle the debts, so if they can't be met from the person's estate (savings or other assets) the debt is usually written off.

The second option is to own as 'tenants in common'. This means you each own a defined share of the house, can be 50% each or can be divided unequally e.g. to reflect one party having brought in a bigger deposit. The main benefit to this kind of ownership is that it allows each person to will their share of the property as they wish, so a common one is to protect their share of the property for the benefit of children in case of a spouse's remarriage (if the property was owned as joint tenants, on the death of spouse A, spouse B would inherit it absolutely and could choose to leave the whole property to their new partner or stepchildren or the donkey sanctuary, cutting out the children of the marriage entirely (you may scoff but it does happen).

So long as you are married, in the event of a divorce the marital home will usually fall into the 'pot' to be divided (either 50:50 or in accordance with need, depending on circumstances) regardless of whether it's owned as joint tenants, tenants in common or even solely in the name of one person (although there are some exceptions). So if you are thinking break-up protection, it doesn't matter hugely either way although I would certainly want at least a stake in the property for form's sake, and if you are going to buy the house before you get married it would be important to either own the house as joint beneficial tenants or if you are going for tenants in common to make wills leaving your share of the property to each other (as otherwise, if one of you died before you got married, the other person's parents or siblings would likely inherit their share under intestacy laws).

When you come to buy the house your solicitor will talk you through the different ownership types and will be best placed to advise you though. You might also want to think about life insurance and/or income protection insurance at the same time as you take out your mortgage, as again in the event of a death or critical illness you would want to make sure the other partner (particularly you if you are the lower earner) was able to pay the mortgage and bills.

Married both paid into separate accounts.

Calculate total household outgoings plus contingency. We have a joint account to cover this. The amount we pay into that is proportional to earnings. Rest is our own and have separate savings. Works fine

@Alaimo “I consider myself careful, DH probably thinks I'm frivolous. He sees himself as careful, I consider him tight.” Made me snort my tea! 😂

Thank you, very helpful.

@maxelly Thank you again! It’s looking like joint beneficial, but we’ll weigh up pros and cons. He already has life insurance with me as beneficiary, and probably income insurance (he’s quite on the ball with that sort of thing). I have nothing. I really should sort myself out!

I like the idea of all in one account and spending freely - I have one DC and since then I've gone down too just 1 day a week so my income has adjusted accordingly. DP now pays all the bills and what I earn is mine to do what I like with however it's not enough and I feel like I'm always asking for extra money for clothes for DC or activities this is given freely, but too save me asking for it I feel would be easier to just have one account out of my circle of friends it's an even spilt what people do.

I would never share money, personally, apart from a joint account to deal with bills. More trouble than its worth.

We are married. I earn more than DH (me £70k, him £45k). We have individual accounts that we get paid into and then pay a set amount (proportionate to income) into joint account to cover bills.
This worked well when we earned similar amounts but now I’m earning more I’m not a sure it’s working so well anymore. When we both had the same amount of disposable we just split things 50/50 or took it in turns to pay (for meals, holidays, things for the kids, etc), but now I’m earning more it’s difficult to monitor and make sure these expenses are split proportionately. I find that I end up paying for things by default because I’m the main earner and then end up spending most of my disposable by the end of the month whereas DH has some left to save. This isn’t intentional but just how it’s worked out so we need to make some tweaks to how we manage our finances.
Just sharing to be open about the potential pitfalls of this approach if your incomes are disproportionate.

Since we got married everything has been in joint names. I understand keeping things partially separate works for some people but that would mean when I was a SAHM he would have had to give me an ‘allowance’ type payment and, well, fuck that. I’m not a child or a bit on the side in a seedy flat I’m an equal.

Struggle, could you not increase your proportionate contributions to the joint account to cover things like eating out and kids things? Obviously it requires you to come to an agreement on how much is reasonable to spend on these or it won't work, but if you really find yourselves in disagreement can you not go back through bank and credit card statements to find out how much you actually spent in a reference period and take that as a guide? This is our system and it works ok, on occasion we've found it running a bit dry if we've been having a particularly spendy month but in that case we each just top it up proportionately from our own accounts (or cut our cloth accordingly and eat beans until the next payday!)

It is up to each couple. We were married for 20 y ears and by the end I earned 10x his earnings but we just put everything in the same joint account. I think we had some savings accounts in own names and I had some shares (he got 100% of those on our divorce but that would have been the same whether it was in separate names or not as we were married).
Had we married when we were older may be I would have set it up with a shared joint account for half the mortgage, half the childcare costs - we both worked full time even with tiny babies, etc expenses.

More importantly we were both careful with money and both wanted the same things - a nice house and to pay school fees and that we should both work full time even with very small babies around.

What will work depends on both your attitudes to money, how you each spend etc. Also depends on the total monies coming in. DH could buy whatever he wants, and I wouldn’t bat an eyelid and vice versa. But that’s because I know he isn’t frivolous, he spends when he needs to and we both prioritise the same expenses eg school fees, investments, mortgage.

I earn anything between 2 to 10 times what DH makes. Everything is joint. (well it's a little bit more complicated as we have different accounts in several countries, but in principle). I think it would be quite challenging otherwise: 'DH, I want to go to Maldives, but your current income only allows camping, so see you in a couple of weeks'?

I can’t see any downsides in your situation to having everything joint. You could always keep an individual savings account too though.

@maxelly that sounds like a good way of managing and would probably help us to stick to a budget for the ‘luxuries’ too. Thanks, will suggest it to DH.

We have the same attitude towards spending and saving so we share everything. Nothing else would work for me in a marriage, especially with children. We discuss big purchases but not day to day spending. We've never argued about money.

Well according to Mumsnet lore:

All his money is 'family money'

You should however have a secret divorce/run away fund.

Any secret funds he has is stealing from the above mentioned family money.

If your DP earns way more then you, splitting of bills etc should be proportional to your relative incomes.

If you earn way more then him bills should be split 50:50 as he needs to pay his way and not be a skinflint

If you move into your DP's home that he has spent the last ten years paying the mortgage on you should be allowed to live rent free. If you have to pay any rent it should come with a % equity share of the property. Obviously if the situation is reversed he is a gold digging cock lodging skinflint and should be told to do one.

what I earn is mine to do what I like with however it's not enough and I feel like I'm always asking for extra money for clothes for DC

it's not 'do what you like' money if you need to spend it on DC's clothes, is it. Having clothes is not really optional in this climate. DC related expenses are family expenses, even if you have separate money.

When me and dh got together 25 years ago we got a joint account . Ever since then we have shared everything . He is very kind and generous and earns well . I stopped working and looked after the children , I cook clean and work part time now but it still works for us. He does the washing and helps clean when he isn't working . He gets big bonuses and they go in our savings. We are a team and share every thing . If we ever split we would split everything too . We started with nothing and have what we have now because I have supported his career and he has supported me caring for his children .

I would never share money, personally, apart from a joint account to deal with bills. More trouble than its worth.

In over 40yrs we have never had a row about money even though it's all in a joint account. It depends on the couple and how they view finances. It works perfectly well if you both have the same attitude to money.

@DillonPanthersTexas

Well according to Mumsnet lore:

All his money is 'family money'

You should however have a secret divorce/run away fund.

Any secret funds he has is stealing from the above mentioned family money.

If your DP earns way more then you, splitting of bills etc should be proportional to your relative incomes.

If you earn way more then him bills should be split 50:50 as he needs to pay his way and not be a skinflint

If you move into your DP's home that he has spent the last ten years paying the mortgage on you should be allowed to live rent free. If you have to pay any rent it should come with a % equity share of the property. Obviously if the situation is reversed he is a gold digging cock lodging skinflint and should be told to do one.

This made me laugh very very hard. 😂

@gunnersgold That sounds lovely.

@stressingmum

I like the idea of all in one account and spending freely - I have one DC and since then I've gone down too just 1 day a week so my income has adjusted accordingly. DP now pays all the bills and what I earn is mine to do what I like with however it's not enough and I feel like I'm always asking for extra money for clothes for DC or activities this is given freely, but too save me asking for it I feel would be easier to just have one account out of my circle of friends it's an even spilt what people do.

This doesn’t seem very fair to me! Clothes and activities for DC should surely be a mutual expense? Not one on which you spend all your money and then go to him for ‘extras’?

I hope this thread helps you find an equitable solution. I’m certainly finding it very helpful.

@MeSanniesareBrannies it is , I'd hate to be with a financially controlling man!

@gunnersgold Same. Particularly as, for many women, there will be the maternity/childcare period, with its attendant reduction in personal income. It must be awful to go through that with a tight or financially controlling husband. Fortunately, I think I’m safe on that front (although I suppose most people think that)!

We do it how your DH suggested.
I paid the house deposit as my DH didn’t have any savings but had a good job where as I wasn’t working.