Help on joining finances before the new baby!!!

[mustardduck]

Dear all,

We are pregnant! Our little baby is coming in January so we need to make some financial decisions!

We need some advice on it; should we do together, should we do it separately? We think our situation is quite complex and we have very different point of views on it so we could not reach an agreement.

Our expenses

• The total expenses of the house are 665 mortgage + 350 bills.
• The house is hers, his name is not on the deeds.
• We split food / restaurant / etc equally.

He:

• He is a banker, and has a quite good salary. Last year with his bonus, he made about £48k net / year.
• He has £25k on savings.
• Right now he helps with living costs paying £500 per month

She:

• She used to work and had a net salary of £19.500 net / year.
• She decided to leave her job and she is getting a £8k lump sum as settlement.
• During her pregnancy, she will also have a statutory pregnancy pay of about £400 pounds a month.
• She has a 2 bedroom flat with £190k mortgage left whose current market value is about £370k. He has no share in the flat.
• She rents a room in the flat for £1100. She considers stop renting it in november to make it the baby's room.
• She has £8k in savings.
• She plans to be a full time mum at least for the next year

It is important to consider that if she can, she would not go for a joint mortgage as she would keep the flat for sure if the marriage breaks down. This is not her first marriage and it has been a problem in her past and she wants to avoid it.

We would like to have ideas on how to join our finances fairly, or otherwise, how to split household and baby expenses having separate finances.

Many thanks in advance!

I read this. It sounds very complicated indeed. Perhaps you should see a solicitor or financial advisor to make sure your interests are protected. The one thing that jumped out at me was who is going to be responsible for paying the £190K mortgage.

Are you already married? Was there any pre nup?

Ignoring for a moment the issue of ownership of the flat, I'd suggest joint accout which all money goes into then an equal amount transferred into separate accounts for personal spending.

Regarding the ownership of the flat, it can still be considered a marital asset even in just her name so it would be wise to consult a solicitor regarding this.

@NothingMoreScaryThanAHairyMary, No we're not married. She has been married before and splitting assets was very problematic and stressful, so in a first moment she'd rather keep the finances separate.

I think you should be quite careful about paying for everything and ending up with nothing. Am assuming you do not own a property at the moment and yet are paying towards a mortgage. This to me doesn't sound like a very fair set up at all. You will be financing two houses on your salary, neither of which you own. Presumably keeping finances separate still means you will be paying for the bulk of things.

So she wants you to pay the mortgage for a property that is in her name only?

Not necessarily, we're looking for a fair agreement, but we discuss and discuss and we don't find something...

We both agree that for the mother is hard to put someone else in the mortgage. Somehow, if anything happens, it is her only source of income. And she went through a lot to keep the house after the break up of her first marriage.

Still back then the mother had a very good job, now she'll stay at home. If we ever break up, she'll have the hardest time convincing the bank that she can keep with the mortgage payments!!!

We may consider other options... as moving to other house and renting the mother's flat. We're looking for ideas, exactly because is a sensitive situation...

How does she propose to keep finances separate but also not work?! Frankly if she really wants to protect her financial interests she needs to have an income stream.

You're also not protecting your financial interests very well (regardless of the baby). You don't own any other property?

One thing you could do is move into a rented property whilst she rents out her flat. You would be wise to consider buying as well as an investment.

Strictly, we don't want to keep finances separate. We would like to join the finances as possible, the only issue being the mother's flat, it is the only thing that makes her confident that she will have a source of income if ever our relationship breakdown; she could then rent the flat and go live out of London, where she could take care of the kid.

She wants to keep her finances separate but share yours, mustardduck. I think it depends whether you think that is reasonable.

I can fully understand that she is reluctant to let go of an asset she has fought hard for, but her goals are contradictory. She wants to stay at home (is that a joint decision?) but isn't willing to pool finances. A fairer way of doing that would be to move to another property where her rental income can contribute whilst she's not working.

She was planning to leave the work before getting pregnant. Her work environment was very stressful and she had too work on whole projects on her own despite being a junior (she just finished uni last year). It was definitely affecting her health; she was anxious, having huge mood swings... so it's not really a "decision"; work can't come before mental and physical health. So settling her way out was the best solution and we agreed on that.

But still it is not so simple. When the baby is coming, she will also be losing the 1100 rent on the room. That a part of her personal finances that she is sharing, doesn't it?

So what she planning to do if she hadn't have got pregnant? Get another job, presumably.

Not sure how sharing a financial loss makes you feel that she's willing to share finances.