Household Finances

[DiamondBright]

I'm in the process of selling my house, DP is doing the same and we're looking for a property to buy together. The intention is that we'll release enough equity between us to buy the new property outright and be able to pay off any other borrowing, so we'll be on a good position financially with just basic outgoings to cover.

On that basis I've agreed that once we're established in the new house DP can retire from his full time job and look for something casual or part time so he'll have some of his own income until he gets his pension but essentially his role will be looking after the house. I'd expect his earnings to be fairly minimal but cover things like his clothes, petrol, car maintenance etc. but not household bills.

My question is if you're in this position where one person doesn't work or earns a minimal amount to cover their own personal expenses only, how do you organise your finances?

Do you have joint accounts, separate accounts, a combination of both? If we set a budget for food shopping, paying the window cleaner etc. do I transfer that money to DP (old school housekeeping money) or do we have a joint current account he manages (separate to the bills account) I transfer a set amount into each month?

How does this work? I'm used to being the only adult in the house and dealing with it all. I'll need some oversight, but I don't want DP to feel I'm watching what he's spending.

Personally, I'd set up a joint account for all income to be paid into and joint expenses to be paid out of.
Then a set amount to be transferred to each of your sole accounts for your discretionary spending. (This assumes you trust your partner in how they manage money.) It also makes it less likely that one is ignorant of the outgoings.

3 accounts. 1 each for your "individual" spendings and a joint one for household/joint spendings where you both pay in an agreed amount set to a level sufficient to cover all your household/joint costs. Use the joint account for "joint" things like holidays, days out, etc as well as the household. Use your own individual accounts for your individual hobbies, hair/beauty, clothes, presents for your own family and your partner, etc etc. A joint account gives you both "visibility" on what monies are being spent and on what, whilst your separate individual accounts allow you to control your own spending and gives you a bit of privacy.

In terms of the equity, are you both putting in the same amount?

Are you sure that you won't feel resentment that you're supporting him to retire early in effect yet May never manage this for yourself? Or that if the worst happened you'd have spent this additional money facilitating this with no gain for your money you've worked hard for? Or is this in return for his greater equity contribution to even things out?

I'll be putting in more equity than him, but we'll get a property I'd never be able to afford (or want to take a mortgage to buy anyway) on my own at this stage, so I'm benefiting from that.

The agreement is that he'll do the vast majority of the household tasks, washing, cleaning, gardening etc. at the moment we have separate houses so I work full time and run a house.

In terms of finances, a lot of the costs I'm already covering now will be the same or marginally more, I'm already running a home, the additional costs (assuming he earns enough to cover his car, clothes mobile phone etc.) will be fairly minimal, mostly food, I'm already home all day so heating and lighting the house. Some of the tasks I outsource now he'll pick up and we should have enough equity from the houses we're selling to buy the new property outright and pay off all outstanding debts, so if anything my outgoings will reduce.

If anything his financial risk if greater, if we split up he wouldn't be able to buy a property with his share of the equity and wouldn't be able to get a mortgage. I would most probably get a mortgage and buy him out, it would be a bigger mortgage than I'd want but it would be possible.

Please make sure that you hold the property as tenants in common reflecting the equity split.

Yes, that's already agreed. We've also discussed making a will to ensure our dc are all protected and we'll need to see a solicitor before we buy to sort those details out.

Are you much younger than your DP? If not why are you enabling him to retire early and essentially you support him? Doing a few household tasks (assuming he does do that and not just play golf or watch TV all day) does not seem a lot whilst you will be covering all bills. I would resent that. Me and DH were in this position years ago but we had children (so I was a SAHM for 3 years while they were babies) and we were married. All our income and expenditure came out of one account. My mum and step dad remarried after both being widowed in their 70s. They bought a flat together as tenants in common and had a joint household account but separate personal accounts and savings. They both had good incomes though and split the bills 50/50. I would not do what you are considering. If your DP cannot afford his half of the bills I would be suggesting he carries on working until he gets his pension.

You could have a joint account for household bills, food etc that you fund and he has access to for the grocery shopping and any household spending like paying the window cleaner etc then he could run his own account for his earnings and to pay for his own personal expenditure.

I suppose how well it will work will depend on his expectations for spending/lifestyle and whether he earns enough to cover it. Things like cars, clothes, hobbies, gadgets etc plus things like coffees/lunches can vary enormously in cost from not very much to hundreds of pounds a month if not more so if he's not earning a full salary, but expects to run a nice car, nice phone, nice clothes, do expensive hobbies, go out for lunch or coffee and cake regularly etc etc you could become unstuck in your agreement about who pays for what and you not feeling like you've been short changed.

But I can see the attraction of the arrangement from your point of view. I'd love to not ever have to think about cleaning, gardening, meal planning, grocery shopping, cooking, laundry, decluttering, DIY, arranging for someone to come and service the boiler, car maintenance, household finances etc etc and despite what MN seems to think, these things do take up time to be done to a good standard, even in childfree homes.

I am a bit younger and we both have health issues, one of us working full time and the other very part time plus picking up household work seems like a sensible division of labour. We know several couples this works for, where the male DH/DP has taken redundancy or early retirement and does up the bulk of the domestic stuff to support the female DW/DP.

He knows the expectation, I wouldn't consider it if I thought he wouldn't pull his weight.

Once your capital is protected, which I see you have already thought of, then I would split hills proportionally to income, so if the ratio is he earns half of what you earn, the bills would be split 66.6% to you and 33.3% to him.

This, or, the same thing in effect which is to work out what you need to cover household bills and reasonable 'joint' expenditure on food, eating out, holidays and so on, then each contribute enough so that you are left with equal 'spending money'/disposable income. You can either manage it so you are paid into individual accounts and do a monthly standing order to a joint account to cover bills, or pay into the joint account and transfer out your spending money to a personal account. Don't forget to account for regular house maintenance (both large and small) costs, a 'slush fund' for things like white goods replacement and to account for annual bills like insurances, TV license and so on. Or if you are of the persuasion that you really don't want any joint accounts even for paying bills, then you could do the 'housekeeping money' system but I really don't think that's particularly dignified for the stay at home partner (whether a man or woman)...

Will you be sharing a car as well, or each maintain your own? If shared then put in costs for petrol and running costs to your joint account budget.

One thing to think about is savings, assuming you are lucky enough to have money left over to save at the end of the month. Will you want to save jointly or in individual names? Worth considering and potentially taking some advice on this, as for instance it may make more sense to max out your workplace pension but as you are not married you'll need to consider whether you want your DP to have access to any of this money in the event of your death and/or splitting up. Also it may make sense (again depending on how much you have to save) to use ISAs but this usually have to be in individual names?

You’ve spoken about what you gain from this, but actually, your partner gains in both those areas as well, and more than you! He will have access to a bigger and better house (paying less equity than you will), and he will also benefit from households reducing - in his case to nil.

So far, whilst you are both benefiting, he is definitely gaining more than you from this arrangement.

If it was me, I would want to be absolutely sure of his character, that he would contribute to the household properly, and not do a ‘so-do’ job, so that you end up cooking or cleaning again, as ‘your standards are too high’.

I would also set up the 3 bank accounts as suggested above (one for you, one for him and a joint one for all household things). I would also insist he contribute to it in income proportion, even if it was 10% to my 90%, to make it clear money was a team thing. Especially as if he will get his pension soon, and you haven’t mentioned if that will change things. If you already have this set up, him getting a pension and increasing his money coming in should just adjust the %, and vice versa, if you choose to reduce hours or stop work etc, both of you again know, this will be a recalculation of the %.

It’s interesting how little value some posters ascribe to a man looking after the home and taking all the domestic load off the working female’s shoulders, compared to how it’s viewed when genders are reversed.

The OP has been clear that her life will be much easier with one home to run and him doing all the day to day - isn’t that what posters on here usually fall over themselves to highlight as the woman’s invaluable contribution?

If you as a couple can afford it and you’re both happy with your respective roles then it sounds ideal to me. Who wants to spend their later years working flat out then coming home to clean the house, do the ironing etc. This could actually be framed as the OP retiring from domestic duties….

*You’ve spoken about what you gain from this, but actually, your partner gains in both those areas as well, and more than you! He will have access to a bigger and better house (paying less equity than you will), and he will also benefit from households reducing - in his case to nil.

So far, whilst you are both benefiting, he is definitely gaining more than you from this arrangement.*

He's actually taking a huge gamble and is way less secure, especially being unmarried. He’s doing something that women are often advised on here not to which is to depend on a romantic partner for his standard of living and nice house!

I agree, he's currently in a house with substantial equity and a mortgage, he's putting himself into a position where if it all goes wrong he'll never get back on the property ladder. I would be able to buy him out of the new house and get a mortgage (or buy another smaller property) but his share of the equity wouldn't be enough for him to buy again.

I wouldn't do what he's doing, definitely not.

I get the benefit of the capital he's putting into the new property, which means I'm mortgage free at quite a young age, and I get a house husband.