How to split finances when he earns 20k more?

[sjk2024]

What are the pros and cons for both?

Option 1) You split everything according to salary eg if he earns 60% of the household income, then he pays 60% for everything, I pay 40%

Option 2) Partner wants to put everything we earn into one pot, and keep back 500 each in our account to ourselves

The second one is simpler I think and you both have the same spending money for yourselves

Option 2 is my idea of shared finances - everything joint.

All this % stuff is for cohabiting couples who are hedging their bets.

Agree

I dont agree it is hedging bets...we have one nominal account we pay into for Bill's but everything else is separate. Wr are married and have been for nearly 30 years! Each to their own.

Agree that the 2nd one is simpler and fair.

I don't see it as hedging bets either, for eg if he earns 4k and i earnt 3k - i put 1500 and he put 2500 we are both left with 1500 - so it would be fair too?

Would there be more than £500 left each after all bills are paid for if you do it your partner’s way?

What are your specific numbers?

You either want to pool money or you don't imo.

It is nothing to do with 'fair'. It is about how you view money in marriage.

That’s just the same as your option 2 in the OP except you’re holding back £1.5k each for personal money instead of £500.

I think if I was tying myself in knots trying to work out a fair way of pooling money, I’d be asking myself if I really wanted to be pooling money at all.

We do option 2 DH earns approx 20k more than me, he did say tonight though he would rather just stick it all into one account rather than keep any back for himself, we are renovating though so every spare penny is going into that

Yes that's fair.

What the amounts should be depends on what your essential costs are, what you want/need to be saving for and how much personal money you want.

Is £4k enough for your joint costs including savings for things like home maintenance, insurance, washing machine replacement etc? What about things like cars, which pot would maintenance and replacement costs come out of?

If you have plenty of money, £500 personal money might be a bit tight, but also £1500 is quite a lot, especially if you won't be saving for things like car replacement.

Option 2 isn't as fair as it leaves the lower earner with less personal money, but it depends what non financial contribution they make to the household (childcare, domestic work, life admin etc) and obviously salary isn't always an indicator of stress or hours worked. Many lower paid jobs require long hours, qualifications and hard and/or stressful situations.

Option 1 is a couple who have just moved in together and aren't 100% sure of the future.

Option 2 is a committed partnership who are secure in themselves and value each others contribution.

FWIW my DH contributes 1% of the income but what is left after bills is shared 50:50. Who am I kidding, there isn't anything left after bills

OP with your suggestion what happens if you go on maternity leave?

We did option 2 once we were married, before that he paid 1/3 of the utilities and food bill, I think he paid half the council tax as well. I had a mortgaged property before we met, so I made sure he didn’t contribute to that until we were married.

We've over the years had me earning more, him earning more, me out of work, him starting a business that then became very successful - now we have older children, we are both full time and earning in the same ballpark.

For the whole time, we have put every penny into one account, paid the bills, put some in saving and then just spent the rest until it's gone. No percentages, and only one bank account full stop. You have to have quite a high level of trust that your partner isn't going to go crazy, but it's much more relaxed than trying to split everything "fairly"

We do option two. And my other half probably earns 3 times my salary.
otherwise our lifestyle is dictated by 30% of what I can afford. Which would limit us significantly (although I wouldn’t mind, he would)
although we have slightly less each per month and put some into joint savings for holidays etc

I think the throw it all in one pot method is more challenging when you're both used to running your own home and having full control of your accounts.

We have separate accounts for everyday spending and personal savings, but both pay into a joint account which is used for house maintenance, large purchases etc. I cover the bills so I pay in less.

We're not unsure or hedging our bets, just doing what works for us.