How would you balance this salary difference?

[Elbels]

Interested in views because I wouldn't have thought twice before reading threads on Mumsnet, but...

Two people in a relationship. Not married but own a mortgaged house together.

Due to covid impact on one and the other getting a promotion, what had been pretty equal salaries will now have a pre-tax £20,000 difference per year.

Currently both pay the same amount into a joint account to cover mortgage, bills and food. Both generous in treating each other and split things like holidays equally.

Both have their own savings accounts and ISAs.

No children but will start trying in the next year.

Would you
A. Carry on paying equally into the joint account meaning that higher earner has more spare money now to add into their savings or to spend

B. Lower earner pays the same as currently into joint account, higher earner now pays more so together they have more money to spend (but how much more?)

C. Lower earner reduces the amount they pay into the joint account, higher earner covers the difference.

No interest in going fully all shared finances at this stage.

I'd say C, proportional after tax

@Lazypuppy

I agree *@ivfbeenbusy*!! However i'm always in the minority on these posts.

Me too!

It gets a bit boring seeing constant comments about women expecting their men to top up their spending money.

I think the current situation is a red herring. You need to sit down and talk about what would happen when one of you loses income for a time because of maternity leave and childcare etc.

We have one pot, married 25 years

We aren't married, I have 3 dependents (his are adults) and I earn double what he earns. We put it all in the pot and give ourselves the same amount of spending money. The only thing I do keep out the pot is my child benefit, as I have 3 kids so have more expenses. Sometimes it can be annoying, as he will moan he has no money despite us having the same amount of spending money (£900 each) and it working out to him keeping almost all his earnings as spending money. And I work full time whilst he normally gets 4 days a week work (sometimes 3) and has a couple of weeks off over Christmas as he has no work available so gets to go to golf a lot on his days off whilst I work full time.

In your position I would probably pay in a percentage proportionate to your earnings. That sounds fair to me. And saves resentment either side.

With

@TableFlowerss @FollowThatStarTonight.

Think we’re quite similar. Since marriage and babies I’m now part time. Husbands career has progressed, he pays for everything but his attitude has always been that it all goes into the same pot in one way or another. We halve the childcare. My remaining salary goes towards things like savings, Birthdays, Christmas and Holidays. It gives us a little cushion, keeps my cv ticking over, gives a little financial independence and doesn’t put absolutely everything on him. It won’t be forever and I will probably up hours when the littles one are older.

We’re fortunate but even when we were skint and starting out we weren’t precious about who paid for what as long as everything was paid and everyone was happy.

You split it by % of total household income eg our total household income is £60k, I earn £40k, my partner earns £20k and we need £2k per month to cover household bills. I put in £1,333, they put in £666

@rollinggreenhills That is very important I agree- there needs to be expectations set for when you have children together, as it would be unreasonable to expect you to pay 50/50 if you are taking time off to have a baby. Some men don't get that!

It gets a bit boring seeing constant comments about women expecting their men to top up their spending money

Which women have said that?

You sound a little... mercenary, to say the least.

We split all household bills 62/38 as that's the salary split for me and DH.

We then have separate spends, seperate savings and joint savings. Joint savings are contributed to at the same split.

We're married and have kids. I dislike totally combined monies.

I think it depends on spending habits. I earn nearly double what DH earns but I spend a lot more so we pay equally into the joint account for bills, mortgage etc. But he has no interest in shopping or buying things for the house or popping out to get some coffee and cake so I end up spending more on those things including clothes for him sometimes. Some spending on our children goes on a joint credit card that we split but I usually pay for things like piano lessons myself.

Household bills for us include all childcare and child related spends. It's literally every that isn't "just mine".

@rollinggreenhills

I think the current situation is a red herring. You need to sit down and talk about what would happen when one of you loses income for a time because of maternity leave and childcare etc.

I agree. Is this a temporary situation, the lower salary? Have your outgoings gone down due to Covid (mine have, substantially, due to no commute, no holidays, no dining out, no get together with friends.) Can the higher earner max out savings, pension contributions, etc? You need to view this as a joint enterprise if you are even thinking about having kids. Personally, I would be trying to build a secure future with long term savings goals rather than looking at how much either has at the end of the month.

I’m in Ireland and interest rates are so low that we are being discouraged from having money sitting in the bank (Some credit unions have introduced savings caps; banks have introduced higher charges) so with little prospect of a holiday for at least three more months, I’m looking to put everything I can into savings rather than spend.

It would be helpful to know if you are stretched on your monthly outgoings, or if collectively you still have a bit left over each month.

D. You pay in a equal percent of your salaries.

Example:
Costs are £1000pm

You earn 20k he earns 80k

You earn 20% of your income therefor you pay £200pm.
He earns 80% and pays £800pm

When you have children and go on Mat leave obviously your percent decreases and when childcare bills are added, the bills go up but the percents don't change.

It's difficult to conclude what percentages you end up with going for C, but I think that's my answer, assuming it ends up proportionate to earnings.

I earn double what DH does, so I put into the shared pot 67%, he puts in 33%. It doesn't cause us any drama. I'd expect the same if it was the other way round too.

These are all definitely food for thought, thank you.

To answer a couple of questions - we're getting married next year. I'm actually the higher earner in this scenario.

He is freelance and industry is significantly impacted by covid so there's a chance his earnings will go back up but not until people can start meeting in large groups again. In the meantime he's hoping to get a salaried role at a company he's doing freelance work for.

We are comfortable and have money left over every month for both of us and in the joint account.

A proportional amount sounds fair. I'll suggest it.

Oh and I have already started to save for a potential future maternity leave plus a very generous work maternity package so that won't be a total shock if and when it comes around.

It shouldn’t continue to be equal - it should be proportionate/pro rata. But how that is diced in terms of reductions to one or an increase to the other, depends on how comfortable things are.

@DonkeyMcFluff

A if you’re not married. Your partner shouldn’t be subsidising you, you’re financially independent.

Utter nonsense.

Marriage isn't a meal ticket and it's also not a financial shield. This notion that a woman would be foolish to have a baby out of wedlock is old fashioned and patronising.

It's also pretty telling that you assumed OP, as a woman, was the lower earner. It's time to drag yourself into 2020.

Personally went for joint finances as soon as we moved in together and have never had any issues with it, but from your options I'd choose a proportionate split. Ie if the total remaining money after everything has been paid equates to 15% of total income then you'd each keep 15% of your own salaries aside.

Over the course of our marriage I've been both the high and low earner at various times and wouldn't have been happy with the other options. When I earned more, I had no interest in lowering my standard of living to what he could individually afford, equally when earning less I wouldn't have wanted to overstretch to match his comfortable payments.

I'd also highly recommend allocating some joint savings before ttc if possible. New babies are expensive and at least one of you will likely sacrifice some income taking parental leave which should be both a joint decision and a joint expense.

@DonkeyMcFluff

A if you’re not married. Your partner shouldn’t be subsidising you, you’re financially independent.

If you are planning to start kids in the next year you are a partnership and you need to work together

Pro rata, which I guess is what you mean by C

If you are planning to have kids soon then you need to start acting like partners. If one of you reduces paid work to do childcare you’d do this, right? (I bloody hope so).

[quote Stinkerbells]**@TableFlowerss* @FollowThatStarTonight*.

Think we’re quite similar. Since marriage and babies I’m now part time. Husbands career has progressed, he pays for everything but his attitude has always been that it all goes into the same pot in one way or another. We halve the childcare. My remaining salary goes towards things like savings, Birthdays, Christmas and Holidays. It gives us a little cushion, keeps my cv ticking over, gives a little financial independence and doesn’t put absolutely everything on him. It won’t be forever and I will probably up hours when the littles one are older.

We’re fortunate but even when we were skint and starting out we weren’t precious about who paid for what as long as everything was paid and everyone was happy.[/quote]
That’s the best way imo. I couldn’t comprehend saying right that’s yours, this is mine. Especially when kids are involved.

And when people get married it’s equal anyway in the eyes of the law....

I cant imagine anything other than one pot once you have bought a house together or married or have a child. One pot - all wages go into it. All bills paid from it, along with petrol, food shops, and joint take aways, meals out, cinema trips etc. Each month the joint account zaps some money to each partners own bank account for their own personal spends. We zap £200. That covers clothes, make up, coffees with friends for me and guitars for him. Perfect.

For me I think it depends on what the actual amounts are. If, even with the reduction, you both have enough to put the same amount in to the joint account and have enough spending money, then I'd just leave the contributions the same.

My DH and I have been up and down in our earnings, if I'm the higher earner I put the extra in to savings, and if he is I trust that he is doing that.