To ask how to divide finances?

[newlyblended]

So some background info. Im currently a single parent to 3 kids, now older at 16, 17 and 22. The 22 year old works full time, 16 & 17 year old in full time education, both intend to go to a local uni and stay at home for the foreseeable future. My partner of 3 years is about to move in with us, probably at the end of the summer holidays. He is someone i and my children have known 20 years, my younger two have known him their entire lives. Though we have only been together the past 3 years. My marriage to their father broke down in 2014, it has just been myself and the children ever since. When we got together he knew that taking it slow was important to me as i didnt want any further disruption to my childrens lives. Now all my children are out of school, this is a step we can take. He doesnt currently live locally, nearly 3 hours away, but he visits, and i visit him both with and without my children. I have sat down and discussed with my children about him moving, and they are very happy with the plans. The wait is for his job, it is transferrable, and plans underway, it just takes a little bit of time.

So my question is, how on earth would you split finances? I earn around £34k but my monthly pay varies by up to £400, i still get a small amount of UC (£200-400 a month depending on my overtime, i will stop getting this totally when he moves in) and my eldest contributes £300 a month to the household. I live in a rented council house since we had to sell the home i owned with my husband we were very lucky to get in a lovely sought after area. I plan to keep the house only in my name for a currently unknown amount of time to protect our home incase him moving in doesnt work. He earns slightly less, however, due to my pension and student finance (both undergrad and post grad loans) our take home is about the same.

We are next seeing each other next weekend and i need to broach the topic of household bills, so we have a plan in place that is fair to us both. Ultimately, we are 4 people, he is one, so 50/50 seems unreasonable. My initial thought was i pay 2/3 including the money from my son, he pays 1/3, but im unsure if im chucking myself under a bus here. If it makes any difference i also have zero in savings, and he has 6 months wage saved as a single childfree man. he also currently lives in a place where half his wage is spent on rent, so his outgoings are going to reduce substantially as my rent is already nearly half what he pays at the minute.

The children's costs are 100% my responsibility, all their costs are on me (no CMS either, he has never paid a penny, another story), So i dont want to be seen as taking advantage of another decent wage coming into the house, but i also dont want to be in a position where by im covering a large proportion of the households living costs and he has essentially reduced his outgoings by like 80% (rent already halved, then paying just a third of my current, that is maths i cant do sorry!) moving in with us.

I’d have said he pays 1/5. There are going to be five people in the household all using the utilities, food, subscriptions etc. He will be subsidising everyone else if he pays a third.

I’d go with the aim to be “equally better off”.

So you will be worse off when he moves in:-

Lose tax credits
Increased Council tax (? - or maybe not if your son is 22?)
Higher water bill
(Slightly) higher electricity bill
(Slightly) higher gas bill

Put a figure on it. Say £X.

He will be better off:-
No rent
No council tax
No bills

Again put a figure on it. Say £Y.

Hopefully Y is bigger than X. (Or you should probably reconsider.)

He should pay you

X + 0.5(Y-X)

And you will both be

0.5(Y-X) better off.

Then you just need to figure out food bills etc.

So id loose 200-400 a month depending on my hours. Ctax will stay the same, bills im not sure but yes they will change slightly, food shopping will have to massively change as at the minute we get hello fresh which only does for the 4 of us as its handy around my 12 hour shifts. That wont be possible when its 5 adults being feed.

His outgoings will reduce by basically everything, he has no further outgoings other than his phone really. No car costs or similar, no loans or debts as everything was paid off when he split up with his ex. His only outgoings are what you mentioned

If it's 5 adults I agree he would pay 1/5th. As and when your children move out, it would become a higher percentage.

Its not 5 adults, 2 are still financially dependent children. Its 3 adults working full time, my son currently contributes £300 a month to the household.

As above, I think he needs to pay what you will loose, plus a 5th of total household expenses. This way you won't loose out and he will be contributing a fair share. Make sure he does his share of household chores - make it clear before he moves in.

what i will lose plus 1/5 seems fair, a nightmare to work out as that figure is £200-400 depending on the month, but if thats fairest its doable

I think in terms of food and utilities etc though they will costing the same as the adults and are not his responsibility. One is also contributing financially. So I still think 1/5th of bills.

my problem with this is that i will be worse of each month already

I dont know. Maybe i just need to accept that im potentially going to be worse off if 1/5 of the general bills, ignoring what i will lose, is the fairest way to do it. 1/5 of the bills here is a saving of like £1000 a month for him on what he pays out now.

I see what you mean - yes I don't think you should be worse off. So what LongDueA Change says presuming this will not make him worse off either!

Ok so his outgoings will reduce by about £1500 a month? Or more? Or less?

If it is £1500 then according to my formula (and going with a figure of £300 for your tax credits and another £100 for how much your bills will go up) then he should pay you

400 + 0.5 * (1500 - 400) = £950.

So you will be £550 better off (hooray!) and he will be £550 better off (hooray!) which seems pretty nice for both of you.

No, he would be better off than he is now off a rough guess. I just want it to be fair to both of us, him moving in should ease the financial pressure on us both a bit, not stretch me to the max and he be sitting pretty. Its such a fine line between taking the piss, and giving him a free ride to save a fortune. I want to get it right. Ive known him forever, i know he wouldnt be offended or really care what i suggest, he would do 50/50 if i suggested it as he has wanted this move for a long time, its me thats been putting it off because of the disruption to my children during GCSEs etc, but i dont want that, i want him to see im being fair with what i suggest and have taken into consideration that he isnt here to fund my children or our lives.

Thats helpful, thank you very much, i couldnt actually do the maths, its not my strong point lol, but seeing it written like that helps me to calculate it better and see how that suggestion could be fair

Is he not paying into a pension? What are you going to look like financially as a couple when you are retired?

I'd say you both split bills 50:50.
Use £300 to from older child to cover food for 3 kids.

He has a workplace pension, but his contributions are not as high as mine are (NHS). Aside from that i dont know, retirement is another 25 years away, its not a conversation we have fully had, i only know his is lower as i was talking about how a pay rise in the NHS happened, but it also bumped me up pension brackets so i didn't really see that pay rise in take home pay.

I think some bills you split differently to others.

Food, gas & elec, water etc, the things that will increase due to him moving in he should pay 1/5 because that’s the amount he’s using. It is essentially a 5 adult household, although 2 of them aren’t working (16yo and 17yo) they will be eating & using the same amount as any adult would so splitting that bill 50/50 or even 70/30 isn’t really fair to him, and you shouldn’t be worse off for doing that because currently with the exception of £300 from your dc you are already funding 100% of those bills.

Have you not asked him? Has he not mentioned anything about it?

You've known each other for 20 years, been in a relationship for 3 years, you've got definite plans for him to move into your house, soon, and you haven't talked about money?

Just incredible!

We have talked about it, he knows what i am going to lose monthly with him moving in, he knows my income, my outgoings, i know his and his current outgoings, i know he has savings, he knows i have a few debts, i know he paid his off when he split from his ex, i dont know his exact pension no, but i kow he has a workplace one.

We havent got a set in stone plan yet no, which is why i plan to discuss it with him this weekend, which is a minimum of 2 months before the earliest possibility of him moving due to his job, it could potentially take longer. But we are making these plans now, before he moves in, a good while before he moves in.

So he should move into a house rent and council tax free because i already afford them by myself? He should only contribute to bills that will go up? Also forget the fact that i will be £200/400 down? Do you really think that is fair?

No of course not I just meant those particular bills, food etc, the ones which actively increase by having an extra person, he should pay 1/5.

Council tax you could do 50/50, or factor in your child’s payment to work that out as %.

Rent- to be honest without his name on it I’d be wary of taking money from him if you want this house to remain “your house”.

He should pay half the rent and half the bills. You need to take the kids out of the equation, this isn’t a HMO. You’re the two ‘real’ adults.

Have a joint account that pays for all of that and pay in half each.

you should pay 3/4 of the food (as the other child’s share is being split 50/50)

The £300 from your child should be split 50/50 so you just put that in the JA. Or if you are financially able, have a joint holiday saving pot of the £300 per month.

he will be better off in this scenario and so will you. No one can argue he should be protected from any cost relating to your children (dependents) if this was the case he shouldn’t be with someone with 3 almost adult kids. It’s a partnership. If he shrugs and says ‘they’re nothing to do with me’ he shouldn’t be moving in. Equally, it’s fair to shield him from some of the burden, after all, they aren’t his kids.

I think you need to decide if you want to be fair or if you don’t want to be financially disadvantaged/make a profit from him moving in.

Whilst it might be a financial hit that will disadvantage you, he is also going to lose out in terms of having an entire place to himself, space, not having to compromise or live with three children (despite their ages), probably not being able to have any decor or furnishing say, not being on any rental documents to give him security etc. Objectively, he is in the worse situation with moving in so to also financially penalise him because you don’t want to be fair, really doesn’t seem right.

I agree with @Mumofteenandtween
The fair way is for you both to benefit by the same amount.

A rented house is not the same as one with a mortgage. He will have no “claim” on the house just because he’s paid some rent towards it. The tenancy is in your name and that’s how it will stay.
However… be aware that once he’s lived with you for a year, if you died, the house would transfer to him. Not your children. So be 1000% sure you could rely on him in that scenario. I know it’s not nice to think of but things happen. Theoretically, if he wanted to, he could kick them all out. That’s why I won’t live with someone, I’m in that situation too.

You are going to be living in the household as joint partners. You have a social rent which is far cheaper than private renting. These two factors have to be taken into account.

You have children/offspring living with you and although these children are ultimately your responsibility - they come as part and parcel of the package of you two being together.

Your eldest is paying £300 a rent a month which is a very fair rent and under market value.

What can't happen is everyone else gets a great deal and pays under market value and you pick up the financial burden. That wouldn't be fair and you'd grow resentful.

I take it your partner wants to move in with you therefore he must be prepared to read;sie that you will be losing £200-£300 a month for him to do so - whilst he will be benefiting from 50% of his wages not paying his rent alone.

You both need to have money to spend and save on yourself each month, as why should he be able to benefit from your rent being low and you picking up the grocery shopping bill etc just because.

Whilst these children are not his own children they will become his step children in all but marriage.

I would suggest a 42/58 or a 60/40 split on all the bills and rent and then £300 rent from adult dc is put in for the supermarket shop and the rest split between you 50/50

The bills being split and the rent being split will still be cheaper than what he was paying living solo, by a considerable mark. The shopping for a family of 5 isn't going to be cheap but reducing it by £300 to start with will go a long way if your grocers are £800 for the month