How do you manage your finances when one earns much more than the other?

[Easterblossom]

This really isn't a bad problem to be having - I'm about to move in with DP. I'm very lucky really, but trying to figure out how to deal with the fact that he earns a great deal more than me. Both in terms of how to manage the finances of our joint home, and how to feel equal in the relationship I seem to be a bit uncertain.

We both have DCs - mine will be with us most of the time and his visit at weekends. We'll be moving into his house and renting ours out. He is happy for me to keep this money, and also to go on paying most/all of the bills on his home. I've offered to split the bills.

But I don't need this level of support - I work too and have always supported my DCs and paid the mortgage. Even when I was with their dad, I earned most of the money. Now I'm feeling like my job doesn't really matter, or that I shouldn't ever complain about my work because he works a lot harder (he commutes and does work much longer hours than I do as a rule) He is 100% supportive of my job and doesn't do anything to undermine me, but it's just the way I feel. We both do jobs when we're charged out to clients by the day, and I'm aware that he's charged out for 10 times what I am. Somehow I find it hard to feel of equal status in the relationship with this in mind.

I'll probably be doing most of the housework and helping him out with his DCs more than vice versa once we're together - so I sort of feel this evens things out with the finances. I'm also aware that he has a lot more saved for when his kids are older than I do, so if I were to put the money from renting the house out aside that might help to even things up a bit between them all.

But at the end of the day, I still feel a bit lost with it all - in some ways I'd rather it were a more even partnership when he would benefit from my earnings as much as me from his.

Has anyone else dealt with this? How to you set things up so you both feel of equal value to each other?

We live together, the money (mine + his) is ours.
No one has more worth because they earn more or they work 'harder', travel for work or have odd working hours.
We are a team and as such we value that we bring things that are different into the mix. No point in trying to compare because you just can't. How are you going to evaluate doing some HW or cooking diner compare to having a long commute to work?

Perhaps you would feel more at ease if you were having a joint account and you agree to how much you put on it? Keep some money for your dcs. He keeps some for his and the rest is put in the common money pot?

Joint account - you both have access to it. Put enough in there to cover all joint expenses (you get together and agree how much this should be) - rent/bills/food and everything that relates to children.

Then two separate accounts - you can only access your own. Spare leftover money goes into these, split equally so you have equal spending money.

Neither of your deserves to have more spending money than the other, you are both equally important. You are a team.

Just to clarify, when I said 'money for your dcs' I mean as 'money for the future' type of things, not day to day stuff whioch should come out of the joint account.

The fact that he would put more on the account doesn't matter as you are a team and your children welfare should be as important to him as it is to you (and the other way around)

For me what would work would be a joint account where both salaries go and from which all bills are paid. If you both agree that your rental income can be treated separately, bearing in mind that as a landlord you will continue to spend money on the property so it's not all 'spare', you could have an account in trust for your DC where that goes.

Thanks - I did suggest a joint account for household expenses, but he's keener on just keeping it informal. But maybe I should push the issue. Maybe it would help me feel on a more certain footing.

Still leaves the issue of some things that he would pay for alone - eg holidays when he wants to go somewhere expensive, and if it were up to me (and my usual budget) we'd go camping or visit friends.

My DH pays mortgage, bills and cars, I pay childcare and food shop and we both have our own money to spend.

I see where you are coming from and definitely feel like this at times. I wouldn't feel comfortable with a joint account as it would highlight how comparatively little I put in and I wouldn't be happy to spend from it.

We can't just set up a joint account and put everything in it really though - his money is so complicated - a lot goes to his ex wife, school fees, some goes into savings for the kids, etc, etc. With such different earnings, and spending habits, and existing DCs that we don't want to disadvantage, I can't see it working. But maybe one for household bills might work.

DH earns far more than me and we agreed on a joint account when we got married and started living together. One of the things I was worried about was in case there were any problems which meant I'd need access to money (id fraud, DH in an accident) - I wouldn't be able to even speak to the bank if my name wasn't on the account.

We both view the money as ours regardless of who earns it. It all goes into the same pot and we both have free access to it. Our set up is a bit simpler than yours as I already have DS from past relationship, but DH doesn't have any children. He's never tried to separate the finances in any way so that my income pays for DS though, I think that could be quite damaging for DS as we wouldn't really be working as a family unit. I lost some income in tax credits when I married DH anyway, so it makes sense for DH's wages to pay for some of DS' needs.

I think you need to work on seeing your family as a team, it sounds like you are operating quite separately at the moment and that will have repercussions on how your DP and DS view the relationship.

I think you need to push it a bit, and formalise things.

Perhaps you could keep your rental income, and take that out of the equation, and then do as trills has said, which is what DH and I do.

I would add an amount for holidays to your monthly budget and treat it like any other bill.

Will he be paying for holidays for your children, or new bikes, shoes and so on? Having children does definitely make things a bit more complicated, and therefore I think it is even more important that you discuss it.

Otherwise you and your children are essentially lodgers in his house, and have no stake in it - which isn't a very good footing IMO.

Could you offer to take over some bills i.e. Have DDs set up from your account instead of his and pay for the supermarket run and leisure (meals out etc).

Yes, I could McFuffster - I have offered to pay the gas (because it's me that always wants the heating on higher ). In reality it will probably be me paying for most of the supermarket runs, because I have more time to go - but that will be a lot for a large household so could more or less wipe out the money I'd get from my house. I don't think this is DP's intention.

Leisure's not a problem - I think we both like being able to say "this is on me" from time to time, depending who it was that most wanted to do whatever it is.

I'm kind of imagining that I'll go on paying for bikes, etc for my DCs. Yes I think we do need to discuss it a bit more - but I've not managed to do this very well in the past as I've not really been very sure what I wanted, or what was fair. Hence this post to try and work out how other people do things, and what I want.

We split all household bills 50/50, I pay for car, savings and any meals out etc. - it works for us.

I think you need to work out what you are comfortable with and go with that. I wouldnt be happy not contributing to the gas/electricity etc as I would feel afraid to use and do as I please. I wouldn't want to pay towards mortgage though as legally (I assume) you will have no come back on that.

DP earns a lot more than me, esp at the moment: I'm unemployed and he's a higher rate tax payer (contracted out daily like you and your DP).

When we moved in together my financial situation wasn't so dire and we set up a joint account for all household expenses (rent, utilities, purchases for food & household goods). I pay less into the pot than him as I earn(ed) so much less. Gradually we've meshed our finances together. It was very difficult for me to accept that he earned more and we did have fights about proportion of housework vs proportion of time spent doing paid work but we're (touch wood!) mostly there now. We still have separate accounts as neither of us have DCs, he is a lot older than me and has a lot of money saved - it wouldn't be fair for me to see that as 'joint' when I did nothing towards it although I don't think he minds so much (I am the stubborn one).

Re: holidays. I had to be clear, very early on, that I would split it as much as I could but there were some things (like regular fancy meals out/hotels instead of youth hostels) that I couldn't and wouldn't pay for - I'm not at the time in my life when I can prioritise them. So we split the normal stuff and anything above and beyond he pays for. I contribute what I would pay for my affordable holiday. That was the one time I had to be very brutal and forget feeling guilty for not sharing.

I was about to say pool everything and keep back pocket money for each of you, but with existing DCs and exes and so forth it's much more complicated than that.
Would it work if he set aside money for his kids' schooling, maintenance, university fund (or whatever) from his salary, and you did similarly out of your house rental. Then pool the rest?

Thanks Charmingly - what you describe is quite close to where we're heading I think - though I hope to work out before what spit of household vs paid work is fair before rather than rowing about it down the line.... But like you we both have money saved already (or rather he does - I mainly just have a big mortgage) and existing kids means it doesn't feel right to expect to pool it all.

With holidays I've generaly paid for my share of the value of holiday I would normally do - so if he wants to rent a villa instead of a tent, he has paid the difference. I'm OK with this - there's a rationalle behind why we've split it as we have. But it's me that has to impose this rationalle - he just kind of says he's happy to pay and I can contribute if I want, which is what he's doing with the household bills too. Is this being generous or (unintentionally) undermining the value of my earnings? I'm not sure.

Would it work if he set aside money for his kids' schooling, maintenance, university fund (or whatever) from his salary, and you did similarly out of your house rental. Then pool the rest?

Maybe - I could suggest this. He likes to plan everything out financially in great detail. I don't feel he's made any adjustment to his plans because of me. In one sense he doesn't need to - as I earn money too, but in another sense, I'd like to feel a bit more of a team - if this could be achieved whilst still letting him honour the comittments he's made (to himself mainly) in terms of saving for his DCs futures.

My dp and I have this. I have a well paid job and until we met was very independant and proud of it. He is a contractor and earns a lot more than me, and I've had issues with allowing him to pay for more things because I wanted to be equal.
As you say OP I didn't want to feel unequal in the relationship and insisted at first on paying for half of everything. We had a lot of arguments about it because he didn't understand this at all and wanted to 'help' me if I was short of cash or didn't want to do something because the expense. I took offence at him thinking I needed 'help'.
We live together now but both have our own seperate houses. I rent mine and pay the mortgage/bills for it and so does he for his. I wanted to set up a joint acount for our joint living expenses but he didn't so we just take turns at paying for food and stuff (we are lucky enough to live rent and bill free in our current property).
After a few years I now still try to pay for half of stuff I want to do or house stuff but have relaxed a bit more about letting him pay for other things - such as posh meals or weekends away. As long as I don't suggest it and then expect him to pay I see his argument that he wants to do things together and money shouldn't stop us. I think the hardest thing for me to accept was that he by offering to pay for more because he could afford more - wasn't him implying anything negative about me.

I earn a lot more than DP- he currently barely works though as he looks after DS for a significant portion of time so our situtation is different as I think he should contribute in time whereas I contribute in money iyswim? I only have a problem when I feel he is contributing neither!

you could make the same argument that you contribute in time (when he is commuting/working long hrs) whereas he contributes in money? it is difficult though as it is easily possible that the two of you were both working the same hours and earning different amounts in which case why should the lower earner then contribute more time?

When both myself and DP were working FT our approach was the joint account option- we contributed roughly proportionally to our salaries to the joint account which paid all the bills etc.

The only concerns I had is when his job impacts on me - either because he couldn't afford to do something (this is easily dealt with as I am the one with expensive tastes so I feel it is right that I fund it - i don't think he is taking advantage as if I wasn't there he wouldn't do it) or where the time he spends working actually affects my time so that I am contributing more in both time and money iyswim - i guess to a degree (and this sounds horrible) his job feels like a hobby to me and I feel he is choosing to do it?

Sorry this is a bit of a stream of consciousness

Thanks Georgie - that's exactly where I'm coming from. Interesting to know that taking turns paying has worked for you - that's what DP thinks will work.

I earn much more than partner.

All our money goes into one pot. I don't see it as my money, because, well, it's not! We're married and we have two children and it's family money.

At the moment my dh might need a substantial amount of money for something work related which will be covered by my yearly bonus. He is also considering winding his business down and retraining. We have the means to support this.

We've argued over it many times! We have no kids or joint owned property and so don't see why it should cost him more because he is with me, and I'm proud in that I like to pay my way. He doesn't see it like that at all and thinks he can afford to pay more and should - although has said he wouldn't expect to pay everything.
Its taken me a long time Easterblossom to accept that him wanting to pay for more is genuinely him being generous and not patronising.
Taking turns has kinda worked for us but because I keep track of it (not on paper or anything - just am aware of who's paid last etc) and insist on paying when I think it is my turn.

I think if you are living together as a family then you need to pool your money and organise it together, complicated or not. If he has money going all over the place then just treat them as household bills, set up a joint household account and put the same percentage of your income into that and keep the same percentage of your income as "spending money" in a sepoarate joint account. This is what dh and I do. Dh earns a lot more than me. We treat our money as our money. We have worked it out so that we both have the same amount of spending money each after everything is paid... Ie we worked out all our outgoings including budgets for food and petrol, direct debits and mortgage payments etc and then transfer enough from our joint income to cover these bills. We then split whatever is left between us. I couldn't be in a relationship where things were separate, its too complicated. And messy.

But don't you think it's easy to see whether someone is being kind and generous or controlling?

Your partner sounds lovely, OP. I wouldn't worry too much about things at the moment. It's great that you now have the chance to save for your children's future. One thing I'd be concerned about is if the children had different opportunities - that would be a major factor for me.

Georgie I think your situation is different because you don't have children. That complicates things a lot.

Imperial - yes, if they are effectively living together as a family but his DCs have much more because he is the higher earner. Not easy to see a way around that though...