To think DH’s idea of pooled family finances is too extreme

[Namechange20222022]

DH hates the idea of separate finances, not only within the household but also with his parents. They live on another continent but their money is ours and ours theirs, there is no distinction on who pays for large purchases/flights to visit each other and any other expenses while travelling etc, meals out, holidays etc. I’ve gotten used to this over the years.

However we now have DC who, via my side of the family, have been exposed to the idea of having their own money. DH hates the idea of ‘my money’, even inter-generational. And strongly believes as an extended family everything should be shared and it’s all collectively ‘our’ money (richer or poorer..).
He wants DC (7 and 5) to be taught the same principles but I think this may be difficult.
By contrast my parents have separate finances, bank accounts, I grew up with my own pocket money etc.

DH doesn’t mind DC being given cash (though he’d prefer not at this age) but he doesn’t want them to think it’s theirs alone and they should be happy to share it with the family.

It’s not a new thing though is it, it’s very common in Indian families. Often this pooling of wealth means they’re able to buy businesses without loans, houses etc

We have a combined household income of about 40k and I wouldn't be concerned about buying myself a few clothes from h and m. If you really need to do that then you are probably spending outside your means on other things, I would suggest.

If you had shared finances you might be better off if for example someone helped you out with a bigger deposit for a house,or you could buy a car outright instead of on finance? Or they could veto unwise spending decisions meaning you wouldn't be in the position of not being able to afford new shoes despite being a high earner.. I can see how it would work well, obviously it is open to abuse but looked at from the other point of view the idea that one sibling could be wealthy while another is scraping by (common in the UK) is also not ideal. I guess it depends on your attitude as to whether you want to take that risk.

I think for the op's children, they are growing up in the UK, their other grandparents are entitled to give them money. It sounds like op's own parents are at the other extreme as not many parents charge rent to their 16 year olds or want to split bills for a meal out with their children. Ultimately hopefully there's a middle way retaining control of individual finances but being generous towards family.

How is it controlling if we are living together as an extended family and we all think it’s easier to not separate out me finances. I’m very happy with the setup between the adults, I think I actually benefit and have more disposable income than if I’d kept my own finances through the ups and downs of all these years.

my only issue is navigating our DC’s attitudes as they grow up, and managing DH’s unrealistic expectations that they will happily be part of this type of arrangement with us arrangement and won’t want to have their own separate money.

You must have quite a high disposable income to be able to do even that though.

one of the reasons we have a good disposable income is because of the support from PILs. Aside from using all their savings on DH’s uni fees so he has a decent career, I don’t think we could both work in the full time demanding roles we have without their support for up to 6 months every year (incl 6 weeks holidays and mine and DH’s busiest periods at work.). They pick up DC from school, cook dinner and do laundry etc. We have saved a fortune on childcare over the years due to them being around at home for several months at a time. It’s so much more difficult to juggle everything when they are not here and I don’t think we’d both be working in the roles we are with young DC if we had to do it 12 months.

Op Im curious, you and DH have individual accounts your salaries go into. What percentage, or how do you decide how much gets transferred to the joint account?

Whoops, don't know why thats massive

one of us transfers money when it runs low, whoever has the most spare in their personal account usually. decide how much based on what direct debits are due to go out, e.g. council tax and utilities.

We have individual accounts that salaries go into and some bills come out of, but don’t see those as separate money from the joint account. There is no percentage.

Is this a reverse?

So nobody is really keeping track of who's paying what?

You are being far far too trusting and you need to be keeping an eye on how much you are putting in the joint account. I bet its more than your fair share.
My advice is to open a savings account in your name and make sure you have some savings should it all go belly up. Look after yourself because nobody else will.

And I definitely do not think the children's money should be getting spread around. There money should be theirs and theirs alone.
It really isn't right for money one set of grandparents to give them money for them to be forced to give it to their other grandparents.
Morally it's not right and Legally its probably questionable

I understand your curiosity, I think we tend to be suprised and amused when we realise that practices, routines or rituals that seem so natural and obvious in the way we do it, are handled differenly in other cultures. To answer your question, I come from a country in South Europe, and across all social-ecomic brackets really. The wealthier don't need their offspring to contribute, and those who have less feel sorry for the fact that for their children will be even harder to find a suitable housing and want them to protect their earnings. It is highly unsual for a parent to charge anything to their children, I have never heard of any family there with such arrangements, and I am by no means living amongst the wealthiest. It is also often the case that children will live with their parents well into their 30s, even after they have been working for quite some time. Buying a house is very difficult and parents' approach tends to be to try as much as they can to help their children to buy a house by enabling them to save the money they earn for a deposit. It is a very communal culture, so children are also likely to bring groceries, pay for things here and there, but this is not something that is asked and no one is doing the maths on how much was spent by child A or B. Children will also help their parents in many other ways beyond economic, and the whole family enjoys the benefits of proximity. And later in life often children will help parents economically if they are in need when they retire, have health problems, etc, and will not be expecting anything back. There is also the other side, boundaries are very blurred, parents (and rigthly so) will always have many opinions and aim to to influence their children towards the choices they think are best, and so on. Please note that I am not saying that one approach is preferable to other, and on reflection, should not have used the word 'insane', I just used it I suppose to reflect how suprised I was when I first heard about it first time here, but I also think it reflects the british culture of promoting independence and self-sufficiency. Like everything, the way families perceive and behave will be highly impacted by the context in which individuals developed.

Setting them up to fail because quite frankly they’ll never meet a partner that is also happy to do this!

@cass5 I just don't see how working class people, can basically keep another adult without them paying some into the house. Thinking of my friends parents tradesmen, admin workers, bus drivers, labourers, factory workers, school dinner lady, shop workers ordinary working class wages.
Would those sorts of Italians keep their kids free of charge?

That all sounds quite nice for you, although I know it wouldn’t work for me! What happened when bil divorced? I assume he divorced since I think you said he’s single and you also described the wedding?

Given your parents attitude to money it is very clear any money gifts from them are for your dc, not a family pot. I think that is not a decision Dh gets to make, it would be extremely controlling to ban your parents from giving them money or force your dc to share gifts. If your siblings give them money they would probably think similarly. I would never charge a 16 year old rent so given your dhs view I can see how he would think that totally not ok, which must be a little challenging.

What happened when bil divorced? I assume he divorced since I think you said he’s single and you also described the wedding?

BIL didn’t divorce, he’s married. Divorce happens less often in DH’s culture (I’m not saying that’s a good thing), so it means it’s not a problem that people really consider when they pool finances.

@Namechange20222022 I don't think you have said what would happen with any inheritance you receive from your own parents. Would you mind saying please?

I guess that all depends on timing and who outlives who. My parents are younger and currently in better health. I’d imagine it would be good to use it to help DC or (hopefully!) DGC’s when they are older.

Op This is working at the moment because you and DH have reasonable income and are doing the supporting. And BIL doesn't have any dependants, his priorities may still change.

You really do need to make sure you have independent savings and pensions.
People have mentioned divorce. Other things can and do happen, injury, illness death, anything could happen meaning you and DH are unable to support yourselves never mind the ILs.

Nor can you rely on your children being able to support you in old age either
You and DH need to make sure you are putting money into pensions and into a rainy day fund.

We have the following:

pensions - 22% of my salary goes into a pension. DH 16%
life insurance - level term until 65 (2 joint policies)
property - in joint names we are paying mortgage on.

though work we also both have income protection, critical illness, health insurance, life cover.

So other than your pension you have no savings, that's madness. And like MIL your putting more into yours than your DH. I see a trend the men folk seem to think someone else will support in old age.

If something goes wrong meaning one of you cant work you'll be reliant on trying to get money out of insurance companies.

Start building your own savings pot, if DH is anti the idea, do it yourself and don't tell him.
You are leaving yourself very vulnerable.

We do have some savings that would cover a few months expenditure. It’s actually in an account in my name. We’d never open an account and not tell each other - that’s not how it works with pooled finances.

Op you are being far far too trusting. But that's up to you.
Do not let your children contribute to the pot.

Read the posts from other posters who have got roped into 'family finance' one had a brother creaming them for thousands, another was the highest contributor but support wasn't their when they need it.

There are greedy people all over the world and all through time. Do not think that everyone is honest and not out for themselves

This is madness - you have no control over your money! What if your FIL decides to use the shared money to buy a flash car or something? What if someone decides ‘well, I don’t need to work as I have this pool of other people’s earnings to spend’ maybe cultural but bonkers.

its really not like that! I have as much ‘control’ of the pooled finances as DH and a decision like that would not be made without everyone in agreement and for the benefit all.

He wouldn’t just buy a flash car for himself and leave the rest of us penniless! He’s not in great health anyway so can’t really drive anymore.

Big purchases and spend are always agreed by everyone. E.g. we’ve just spent a signal amount on getting proper air conditioning installed in our U.K. home. It was PILs initial idea but we did have long discussions about it before we went ahead and I’m very happy with the decision.

DH and I have decided to have a long weekend away next year (belated 10 year wedding anniversary trip). It was discussed (but less so the cost, more the timing and being able to look after the kids for long weekend). Decided to time it so BIL and SIL would also be around to help if needed. That drove the cost up put better all around.

So your DH wants to pool the money with his parents, did he mention your parents or is it only his family he is concerned about?

What happens when his parents no longer work? You are going to be funding their life.

If someone makes a large purchase or withdraws a large sum, does someone question it?

DC money, they can't be expected to put their money into this. Maybe suggest to your own parents that they either buy birthday gifts or open an account for the kids that your parents control until they are 19.

Others have asked where it all stops?
Does DH have siblings that have access to this pooled money?

Why is it just his family and not yours too?
What happens if there is a marriage breakdown?

Why are most posts I see about what DH wants? Women, put your foot down!

Are you looking for a way out of this arrangement?

"property - there is a home in the U.K. which is in mine and DH names - mortgaged. PILs stay with us for up to 6 months each year. Household expenses are paid using mine and DH’s salaries.

another property in India (previously in in laws names, has been sold and cash used towards a property in BIL’s name (mortgaged). In-laws live there with them when they are not in U.K."

Wow, so PIL had a property, sold it and purchased another in his other sons name? That's a red flag to me. I don't know how you don't see this but YOU are the one Funding this whole other family whilst they move their assets around in India that you can't touch. You are also funding your PIL for 6 months whilst they live with you.
FIL has no money coming in and MIL has a small pension so obviously they aren't putting much into the pot. What is BIL and his Wife putting in? Not very much I suspect.