How to split finances after mortgage paid off

[Morph22010]

We’ve stayed in same house for nearly 25 years and mortgage will be paid off next year. Dp is abit rubbish with money and budgeting so when we moved in we split the finances so he paid mortgage and I paid bills and bought food etc., thst way he just had one dd to manage going out just after payday. at the time this was roughly equal amounts and our wages were about equal. Obviously over time cost of food and bills has increased but mortgage stayed the same, however my salary increased so it was still a fair split, I am now paid 3x what dp is. I’m not sure what is reasonable when the mortgage ends, we can’t really do the split so that we each have equal funds after all bills as I would still have more even if he paid nothing and it just doesn’t sit right him not contributing at all. The mortgage is only £400 so if he was to carry on contributing the same funds to the household each month that seems like a reasonable cost to cover everything however then it’s only me getting the advantage of the mortgage finishing, would £200 be a fair amount? We have one child who is disabled and I get the child benefit and dla for him but also pay for all his costs like clothes, entertainment, Christmas presents etc. dp is more of a spender when he has money whereas I tend to save, hence never having joint accounts.

the situation has worked well for 24 years so won’t be changing anything till mortgage ends but just want ideas of what is fair after mortgage finishes

I've never understood the paying of different things between couples as it's never equal.

We work out all direct debits, have a joint account and all direct debits go out of that. Monthly we put in half each to cover. We have a credit card that food/outings other random things go on and we clear that equally every month. The rest is ours and we decide what we do with it.

That’s the thing though, should it be equal or should the higher earning partner contribute more?

It seems right that DP should get to keep more of his salary once the mortgage is paid off, although he should really be thinking of directing the money direct to some savings he can't touch or a pension. What about moving both Council Tax and gas/elec over to DP. Are you already on a variable rate for gas/elec or have you got 'bill shock' coming up when your fixed rate ends?

We are on the variable rate but I’m in credit atm so dd will prob go up at some point, actual useage last month was £200

You should both benefit from the mortgage ending.
Eg if he pays £200 then you’re both £200 better off each month. That said I’m normally about proportionate splits. So you should pay 2 thirds of the total bills and DH 1 third (based on your proportionate salary). On £750 you pay £500 and he pays £250.

You still are not including all the costs of truly running a home, and car. Does he never get in the car and go anywhere ?

I kept careful and very accurate accounts a few years ago, and still do, for trying to plan to see if we could reduce our working hours and was astonished to find we need 1900 -2100 a year to properly pay for our actual outgoings.
no haircuts, window cleaner, oven man, presents, birthdays, Christmas, National Trust, cleaner, and 10% to a household repairs fund ?
Holidays and holidays spends, visiting friends and family petrol fund if they live a long way away

do you not want to retire early because if you do you need that amount of money x 12 months for each year you want to retire early. No way can we keep working until we are 67 or older.

the idea of just blowing £1800 a month each is very scary to me,

your income is sound now, but income can change so quickly and your approach to family budgeting seems far too simple to me - you have the obvious bills covered so the rest is for spending. really.

I shall bow out now, and wish you good luck

That’s the thing though, should it be equal or should the higher earning partner contribute more?
That's for you to decide. It's part of adulting in a relationship to be able to have these discussions with each other and reach these decisions.

He has his own car which is an older one and paid for, he pays his own fuel but we pay for repairs out of the the money we get for ds’s travel as dp does pick up. He does smoke which is costly. He is slightly better at saving now than he was as at one time he’d run out of money before end of month now he is generally in credit by at least a few hundred but no seperate savings. He pays often when we go out and does pick up some shopping as required and will pay for that but this varies

I think the only fair way is having equal money left over.

So joint account, every bit of income into it, then you each have a personal account and agree an identical amount (eg £500 each) to be paid in each month.

If the joint account is in surplus, money gets moved into savings.

Work out the % of what your salary is over his ( example 20% ) work out monthly total outgoings , 50% less his % deficit is what he should pay. Include all outgoings including kids stuff , food , holidays etc. His would probably come out more than his past contributions but at least it will be fair.
it's irrelevant you are a saver , and he isn't . What you do with your ' own money ' is your business. Unless you divorce and then he gets half your savings inspite of him spending his

We do the three accounts, I am the higher earner, always have been used to earn nearly three times DHs salary but he's almost earning the same as me now (about 10k less but does October that makes it closer to 5k) having retained in a different field.
Before we were married, had DC and owned a house together we paid 50/50
Now and for a long time it's worked out so we get the same disposable income each month.
The bit you are missing is you take an amount out before splitting the disposable income for savings. So he won't get more than his salary back as it sounds like you could afford to save a lot. You then decide on pots for those savings. We have long term savings, household savings for things like car repairs, chimney sweep, new dishwasher, painting and decorating etc, a holiday fund and savings for DS. In reality you are paying for all of these things currently and will continue to subsidise them through this method as the higher earner by some margin. However it feels like our money not yours and his, he also beats some fiscal responsibility.

Surely the simplest way would be for him to set up a DD to a joint savings account for £400 a month to replace the mortgage payment, and everything else just carries on as before. That's based on you both being happy with the current set up with him paying the mortgage as his contribution. (The fairest way IMO would be equal spending money and everything else joint, but you seem disinclined to do that).

Just one comment- Are you still eligible for Child Benefit?

Is your name on the mortgage / house deeds?

Also, agree with PP. All income goes in one pot. It’s bizarre to do it any other way.

It's a good time to sit down together and plan the future.
I'd expect the outcome to be something about the £400 going to pensions (a kind of joint money if you plan on being together) or long term savings or family expenses (eg a bigger family holiday) but you may decide different future goals.

On a separate note, is it worth paying into a pension for your disabled son if he will be on benefits all adult life? You may end up pricing him out of care (eg pension credit). A discretionary trust would offer more flexibility in that sense. If you've had financial advice from a disability charity like mencap and it's recommended, then ignore me!

Why doesn’t he keep paying the £400, but in to savings or pension? That’s still a benefit from the mortgage ending.

Set up a joint account move the DD for joint bills there. Set DH account to put an amount in and use a ratio based on salary.
So would probably be 65/35 split by the rough numbers you have provided. This will give you both the same ratio of your income as personal spending/to do as you wish. Rule is joint is only for bills not coffees/meals/amazon!

We have found this to be a good balance as DH and I have very different spending habits (I save as much as possible keep costs low he spends like a fish!) It definitely keeps the peace, we examine it every 4/5 months to make sure there is enough there.

I would suggest that once it ends he sets up a standing order the day after payday to you for £400, which you will use for household items and to save up (based on you saying he's not good with money)

Put half into his pension and half into some sort of investment for your son?

yes once pension contribution deducted as making a lump sum payment this year, prior years was part time so below threshold

Either you are a committed couple or you are not.

Joint account which all wages go into and all bills come out of.

If you were married then courts would start from the basic principle that everything is 50/50 - how much one earns compared to the other is irrelevant.

I have earnt far more than my OH over the years - my wages have not been MY wages, they have been part of OUR income.