How do i rebalance finances after a big promotion when our marriage has always been financially equal?

[pilii]

My husband and I have been married for 17 years. Our incomes have always been roughly equal and grew at the same pace the whole time so we've just done a simple 50/50 split on everything and never had to think about it. We both are in mid 40s, Also we both earns ok 6 digits

That's about to change. I got a promotion starting this September, and I'll be earning about double what he makes. We have 3 kids together, and I'm trying to figure out how to fairly restructure things now that our incomes are so lopsided

A few things I'm stuck on
Shared bills/mortgage stick with 50/50, or switch to proportional (I'd cover ~2/3)?

Savings/investing should contributions to joint savings also scale with income, or stay equal?

Personal allowance should our individual "fun money" also be proportional, or does it make more sense to keep that equal so neither of us feels like the higher earner gets to spend more freely?

Kids' expenses (school, activities, etc.) proportional like the rest, or split evenly since they're both our kids regardless of who earns what? They are all teenagers

We've never had to navigate an income gap before, so this is genuinely new territory for us after 17 years of things being simple. Anyone been through a similar shift especially later in a marriage rather than starting out unequal What worked and what caused friction

Congrats! I'd put it all in one pot - easier!

Although not one pot, with the amount you both earn! 😄 Do lots of sensible investment things and then just pool the rest to pay for house things, holidays, day to day expenses etc etc. I can't imagine you'll be short if you need to buy some new clothes - how much do you need/want to buy that would touch the sides of that salary! But that is from me, on a very average salary.

Personally I think it would depend on who wanted 50/50- did you always earn the same even after having children, for example did you pay 50/50 when you were on maternity leave leave?. Who stayed at home with the children the most etc. if your husband has supported you through mat leave etc I would do a 60/40 split and pay for some extra nice things, if your husband wanted it kept at 50/50 Your whole marriage I would keep it at that and pay for extra things

I’d look into keeping everything the same and throwing the additional money into savings/investmwnts. Will work better for both of you longer term

Who said put it all in one account? You can have as many accounts as you want.

And one practical advantage is no one has to keep track of who’s paying what and in what proportion. In 20 years of marriage all the bills go out from the same place by dd without a second thought.

So what do you mean exactly by sharing finances? Your first post which I quoted said the OP and her DH should have shared finances, which to me means putting it all in one account from which everything is paid for.

@pilii congrats, this is amazing.

Similar boat here. Separate finances. I’m the higher earner, albeit husband earns very well. I pay 75% of household bills, he pays 25% and has a salary sacrifice company car. I then use chunks of money to pay down the mortgage periodically, pay into the kids’ ISAs, book nice holidays, pay for house works etc.

One point you need to consider is pension planning and the taper. The government restricts your annual pension allowance once your income is over £200k. Worth looking at as, if your employer contributes, you may be at the max quickly - albeit you could carry forward unused allowances for the last 3 years.

I’ve found ChatGPT/Claude really useful for these kinds of conversations. Tell it your ages, salaries, savings, pensions etc and it can help you model retirement and where you should be putting excess cash.

The question about “fun money” is interesting. Neither of us are extravagant so we don’t really tell each other about what we spend on ourselves. That’s the beauty of separate finances! If all the other stuff is covered (mortgage, savings, pensions) it shouldn’t matter how much you’re spending on “fun” - and you should enjoy some of your money.

Also think carefully about a second property…. they don’t really make any money anymore (unless you’re planning an awful HMO) and frankly being a landlord/owner can be a bit of a pain in the neck.

And if you’re both higher earners you should never do the “one pot” thing. Get paid into your own accounts and a have a joint bills account and savings in your own names. HMRC certainly doesn’t treat you as “one pot” when you submit your tax returns 🙄

No, but that’s just random nonsense so, you might want to understand things a bit more.

It’s actually £260k

I would describe your finances as joint finances. They are notionally separate but ultimately since you are paying off mortgage etc, IsA’s etc then it is just administratively the money is kept in separate names. My set up is almost identical to yours but it is 100% joint finances. All money is joint but in separate names because of interest/tax. I don’t consider the accounts in my name ‘mine’ and my DH’s name his. All accounts are simply the family pot but neither of us scrutinise what’s goes on each other’s CC , we just sort of know what is the amount of acceptable spending before we need to discuss with each other

Are you having a bad day? It is quite hot. Your comment is very rude.

Re your comment about the taper, you need to consider both threshold income of £200k and adjusted income of £260k. I’m way beyond the taper because I understand quite a lot of very complicated things and get paid well for it 😉

Proportional / shared finances. I earn more than my DH and we split all bills and expenses proportional to our take home pay. I also tend to cover holidays with my bonus (with the remainder going into our joint savings) so that we tend to have roughly similar amounts left over of individual fun/saving money.

I know about the taper, but threshold is 200k and then an adjusted pay calc, but only if both exceed. You do not taper after 200k. I should earn about 750k this year so it’s a long ago issue but my DH and I manage perfectly well to combine our income in one pot and split the benefit. He’s in the taper and so we understand very well how to navigate things.

I’m fed up with people writing half correct crap on here, so perhaps I’m less than tolerant when people make inaccurate pronouncements.

This what we do. We are both on our second marriages and 18 years in have roughly lived in my house rented his and used rent to pay bills. Our earnings are more or less our own except his are very variable and mine fairly consistent He hates money so I have complete control of pensions and investments I tell him what he has to save or pay into and he does, conversely if he sees a derelict property at auction I find the money and support us while he does it up. Recently he received a substantial six figure compensation from the Post Office scheme and he transferred the entire amount into my name the same day. I was pretty pissed as I had already sorted the tax implications but it shows the level we trust each other while keeping finances separate.

@TVDinnerandwine you said “it’s actually £260k” and then told me I need to understand things more 🤨 I pointed out it’s not as you have to take into consideration your threshold income. You then decided I’m writing “half correct crap”, so I’ll explain for everyone’s benefit.

The taper applies if:

1. Your ‘threshold income’ is over £200,000 – usually all your income minus the amount you pay into a pension; and
2. Your ‘adjusted income’ is over £260,000 – all your income plus the amount your employer pays into your pension,

Example: If you earn £250,000 a year in total (including your salary, bonus, interest and dividends) - i.e. below the £260k you said - and pay £30,000 into a pension, your threshold income is £220,000.
If your employer also pays £30,000 into your pension, your adjusted income is £280,000. This is £20,000 above £260,000, so your annual allowance reduces by £10,000 to £50,000.

It is possible to (a) be a high earner, (b) write on internet forums disagreeing with someone, AND (c) be polite about it.

Feel better 😁

Use the opportunity to pool resources into a joint account. Decide on an amount each month to get moved to personal accounts for fun spending. Work out pensions / isas / holidays.

We’ve pooled everything since we had our first DC. I worked 3 days a week when they were small (DH wanted me to). We pooled money. I now work 4 days, and it’s my choice not to do 5.

Just pay proportionately. We are both high earners, I now earn double what my husband does, we just adjust the percentages going in so we are left with the same disposable income , we pay into a joint account to cover all joint expenses, and we then spend and have our own savings and investments. It has to be in indovidual names for investments any way and for tax purposes.

for holidays we do the same but out our own disposable funds, just pay proportionately. He used to earn more than me, it’s not even a discussion here, we just amend the percentages and crack on

we aren’t strict about it. If we are out for dinner either one of us pays or the joint account. Same if we need cash, or socialising. It’s no biggie. It’s all our money

I don’t see the need for this, op keep having your salary into your own account. Pay your share into the joint account.

people on here really love an all in aapproach, it’s not for me. Every couple I’ve seen doing it end up having way more convos om money and spending habits/

You are married and a unit. Just pool everything, each one of you can pay the same amount into a personal account for ‘treats’ and anything left over goes into savings. It shouldn’t be proportional to what each partner pays into the communal pot.
I don’t get this big angst over keeping everything separate. Individual incomes fluctuate over a lifetime but why does that matter so much? Marriage is a joint endeavour with shared goals. There should be total financial transparency between partners. It’s not negotiable for me.

Exactly! There was a similar thread the other day. Why do some couples think it's 'his money" and ""my money" rather than our money and our bills and our assets?

How come? I can’t imagine going out for dinner and having to pay my partner back for my share or holidays or a night anway etc. I know people that do that. Seems bonkers to always make sure that you keep your proportion safe for yourself. When you pool you don’t give it any thought regardless of whether it is in a joint or single account.

We are a pooled household but the OP isn’t going to suddenly change. What I do think though is there should be a joint discussion on how the additional household income is spent. Eg should they both be trying to maximise pension contributions, does it change plans re retirement, does it change schooling plans for the 10 year old. I’d be mightily cross if my husband got that sort of rise and didn’t discuss how it was going to be used and vice versa. We’d jointly discuss inheritances for example.

We are strictly 50/50 for everything, second marriage, no shared children, earnings similar but at different points during the year one of us earns more for particular work, the one with extra money then pays for home improvements, meals or activities out or an extra holiday. We like to treat each other without feeling we are taking money from a shared pot.
We also keep savings separate as we like to help our adult children at various times as well.