Organising finances in a new relationship

[neenypeeps]

I’m not sure whether I’m looking for financial advice or relationship advice but my experience is that they tend to get tangled up. I was wondering if any of you could share how you have dealt with finances in a new relationship. When I moved in with ExH we had no money or property so it wasn’t an issue :-) and we always just pooled everything (and then he spent it) but now I’m older and have accumulated property and children I’m not sure how it should work.

Just some background - I am soon to finalise a divorce and planning to move in with a new partner (together 5 years). I will own my house but have a lot of debt after buying ExH out. New partner also owns his own house, has a small mortgage, no debt and a small amount of savings. We earn pretty much the same amount but I have 2 children and loan repayments so more expenses. ExH pays a reasonable amount of maintenance which covers half the kids’ expenses.

The plan is for DP to move into my house (it’s bigger) and rent out his. He will pay me rent equivalent to half my mortgage (ExH is still paying half but this will stop when divorce is finalised). The rental market where his house is is crazy and this arrangement should mean that he will be better off by about €1500 a month. I will gain a little from splitting utility bills etc. but lose some tax credits so will probably be a bit out of pocket overall.

I have questions like:

There is some work to be done on my house (e.g. we need another shower and some office space) before it’s suitable for another adult and his house needs some work before renting it out – a few bits of furniture, a coat of paint, etc. – who pays for these?

Should some of his ‘profits’ from renting his house go into the pot?

When I have 2 kids should I be paying more of the utility bills etc.?

I'd be really grateful if you could share your experiences. I haven’t really discussed this with DP yet but I wanted to get some idea what the pitfalls are and what is fair and reasonable before I do . Once bitten…

Good starting point for lots of things to consider here (even if you don't actually sign the thing): www.advicenow.org.uk/guides/how-make-living-together-agreement

But ultimately, its about what you both feel comfortable with, even if that is not the MN approved version! Nothing is set in stone so it can be reviewed in future if you wish.

You should certainly not be out of pocket at all!
Make sure of that.
If it means he pays more 'rent' then that has to happen.
If he will be better of and you worse, just don't do it!
Be very honest and up front with him on this point.
I'm sure he won't want to see you worse off anyway so it shouldn't be an issue or a sticking point.

Thanks ShotsFired, that's very useful - there's a lot to consider really.

hellsbellsmelons, you're right, I shouldn't be out of pocket. I think that DP would agree (otherwise I wouldn't be moving in with him) I just want to make sure that we're both on the same page from the beginning.

I think you should each benefit by the same amount. What do you mean, he'll be £1500 better off and you'll be worse off!!! Why the hell would you put yourself in that position? And be careful if he's paying towards your mortgage - I learned recently on here that he can then have a claim against your house if you split up.

ImperialBlether, I mean that before we pay out or pool any money together his income will have increased by €1500 (roughly - he currently pays €1000 a month mortgage, he will be able to rent out his place for €2000 a month and will pay me €500 a month rent which covers half my mortgage). We haven't discussed the implications of this and I don't expect him to be unreasonable my problem is that I'm not sure what to suggest.

I'm not in the UK so I'm not sure about his entitlement to claim against the house - I'll check it out - thanks!

The other consideration is that you are not moving into a new place together, where it could be all 50:50 in terms of what each of you put in from the start. He is moving into your home, that you have already paid towards for however many years. So there is already some equity in your name that you need to consider.

(My own approach got absolutely roasted on here, but it works for us and it makes me comfortable that my hard won financial position and ability to be independent is not at risk, even though I am sure as I can be of my relationship. Maybe when we get married I'll look at it again.)

If he is moving into your house and is not on the deeds then he shouldn't be paying anything towards work on the house. Half the mortgage in lieu of rent if his children will be staying over too as well as yours.

If unmarried, 50/50 on utilities and food is fair and you pick up your own children's expenses each.