How do you split finances?

[lizzieannejames]

DH is on a much better salary than I am- 4x as much as I earn at the moment!

At the moment our pay goes into our own accounts and then we both pay a percentage of our income into a joint account that pays for food, bills and the mortgage (and soon childcare)

Have been doing some research and thinking about changing things- including the household account.

I am looking at the Santander 123 account- just by paying in both our salaries and paying our bills we could get about £200 back a month.

And then was thinking whatever is left over is split 50/50 and paid into our own personal bank accounts.

How does everyone else do things?

Similar to you. My DH earns five times what I earn. We both have our salaries paid into our own account, then put a percentage into a joint Santander 123 account for bills.

If you are a team and especially if you have children, this is the best way IMO:

One joint account - this pays for all house and child-related costs (mortgage, bills, food, insurance, children's clothes and activities). Both agree what goes in this. Both agree what is covered by this and what is not. Both have access.

Either one or two savings accounts - either one where you both have access or two individual ones, with the same amount going in. Both agree what goes in here. Both agree what it is for.

Remainder split 50:50 into individual accounts, to spend as you wish. You don't have to discuss or agree regarding how you spend your "spending money". You can "waste it" on whatever frivolities you like. You can spend it £2 at a time on coffees or magazines, or save it up and blow £300 on a handbag or piece of sporting equipment.

IMO this is better than simply "pooling money in one joint account" because people have different attitudes to money and might either spend more than their "fair share" or might feel bad about spending "the other person's money". This way you can be completely relaxed about what you do with your spending money and what the other person does with theirs.

CPtart- how does the interest work on balances above the certain amounts? Does it just pay the interest into your bank account? Do you have to pay tax on it? Do you get the cashback on the bills- I believe it is water, elec and gas and phone/tv/internet?

Thanks so far for the advice- we both agree we don't want a joint account for everything as I tend to spend more than DH and a) I don't want him to know how much I really spend (haha) and b) it wouldn't be split fairly.

We already have a joint savings account and pension plan- so it sounds like we are similar to you Trills.

Yes it's 1% cash back on Santander mortgage payments and major supermarkets. 2%back on gas and elec and major department stores.3% back on mobile phone, landline, broadband, major petrol stations and national rail. There is a £2 per month fee, which is usually easily offset by the cash back each month. Payments are made via a santander credit card whereby you set up a direct debit each month to cover the costs accrued but minus the cashback you have earnt. Cash back from household bills paid on direct debit goes straight into the account.

There is also 1% interest paid on balances over £1000 each month, 2% over £2000 and 3% over £3000.

In two months we have earned about twenty five quid. Not a massive amount but better in my account than theirs! I am a saver and my DH a spender so once monies are in the 123, the remainder of our salaries is each for us to spend as we wish.

I'm surprised that folks have separate bank accounts, TBH.

We just have a joint account and both salaries go in there. (And there is never anything left ).

I feel more free with my spending money held separately than I would if everything was in one big account.

I feel comfortable that I know what I can spend. Nobody else is going to spend it, and I can spend all of it without feeling bad.

If there's a larger amount in it then that's great, I have more to spend (and it's not because DP is saving up his spends for something, as could be the case in a joint account).

If there's a smaller amount in there then I'll have to be careful with my money (and I know that's it's only my fault that the rest is gone).

We opened a joint account when we got engaged and have shared everything financially since then........ Now fast forward 38 years and two DC, three house moves and about 8 cars later and it is still working.

Everything joint.
Sometimes DH has earned more, a present I do but it's always been our money. Can't imagine any other way in an equal partnership.

Separate bank accounts. He pays for stuff. I pay for other stuff.