Managing finances with different earning amounts

[Willtherebeoctobersnow]

Difficult one. I don’t earn a ‘low’ salary by any means, just over £40,000, so above average. However, DH is on more - just over £70,000.

We have a brilliant joint income, therefore, but somehow I never have any money, and it both depresses and humiliates me a bit.

I take home just under £2400 and our joint costs are around £3000, so in theory I have about £800 for me. The problem is that once I’ve paid all of my things off, I’ve hardly any left, so have to rely far too heavily on DH.

Some of this is because I’ve only recently returned to work and so I’ve accumulated some debt which needs paying off, but just the same, wondering how best to manage this.

My partner and I jointly earn just what your wage is.

We splits bills 50/50.

We each have our own house but live in mine, so pay our own mortgage each. His house is rented, but income covers mortgage, insurance for both houses, and maintenance for both houses..he doesn't ask me to contribute to these.

After outgoings I have around £450 personal money as does my partner.

He never buys anything other than petrol so he puts most of his into savings.
I have shares which is my savings (cash them in frequently, buy more shares, in 3 years managed to make/save 8k so far).

What are you spending to make you skint all the time

I'll help with giving my experience

Myself and partner are not married, we have a baby on the way and due end of Dec/early Jan.

Partner on around 30k a year, I'm on 23k a year and I also took on a part time job at the beginning of this year to help me pay off my own debts (very silly debts I got myself into with bad money management and just wasting money in general). Part time job is to help pay these off before baby is here.
At the moment I pay our bills - council tax, gas, electric, phone bills, internet, tv subscriptions etc.
Partner pays our rent (£650) and then he pays car finance for a new car we got due to baby being on the way. I brought a car into relationship I had already fully paid off and he uses this for running to work (we decided to keep both and put the heavy mileage on the old car as the trade in amount wasn't worth it to us compared to what we'd get for keeping it and using it as a run around).

When I go on maternity leave we'll have a chat about things and see where we will change the split. May be that he takes on the council tax as that's a large chunk of what I pay (£230 a month). I'm actually quite fortunate that on taking on the second job I have qualified to get SMP from them as well as my main job so it won't cause too much panic.

We may also be reducing rent/council tax in a few months too since our landlord is selling up and we'll need to move somewhere else.

I know mines a bit less black and white than others, but maybe this helps. The debt I am paying is 100% my own debt and not accumulated because of partner not helping me. However, had I got into debt during mat leave for paying for things for house/baby I would 100% expect partner to cover this or contribute towards the debt

If you want to do in in comparison to earnings, then he needs to pay 65% and you 35% (that's to cover everything, food, bills, stuff for kids, stuff for house, insurances, savings etc). So you need to sit and work out total monthly spend and split it 65/35.

This should leave you both with enough spends each month

Are you married?

So do you pay anything towards your partner's house? Do you get rental income from your house? What happens to that income?

Who pays any expenses relating to your DC eg childcare, clothes?

Is he a partner or a husband? Legally and tbh financially this does make a difference.

If you are married both houses are marital assets especially now you have a child they would be included in a divorce settlement as would cars and pensions.

Assuming married then a reasonable monthly pot of spending for personal clothes, haircuts, work lunches, socialising with friends at an agreed amount. The rest is joint money to cover family expenses and savings. That's fair to me.

I've read the full thread and OP, I'm not quite sure why you got so defensive?

Your opening post seemed to ask for financial advice but then you have patchy information, refused to expand and accused posters of piling on (and sorry, I can't see where you've answered the question about financial abuse other than your cross response to Samphire...which was also probably the clearest you have been with your set up)

We split things 60/40 but this is in line with our earnings

You start with him as your DH but then refer to him as DP. The difference will influence responses

You need to pay into a joint account proportionate to your incomes. Dh and I have similar ish salaries to you (he is a company director so slightly more complicated but it’s similar enough). I pay £1100 and he pays about £1800-2000, which means I still have about £1000 left for personal spending and saving every month.

That said if you have £800 worth of personal bills each month with £2400 salary, it does sound a bit like you are living beyond your means. I do spend a good bit of my £1000 salary left over after bills, but with the exception of my phone, none of it a regular bill or debt. That’s a lot.

@noshiforever

All of you who split it so you each have the same amount leftover for themselves each month ... doesn't the higher earned feel resentful that the lower earned gets the same as them?

I have a few hundred spare to myself and DH has probably £2k spare to himself each month. He furthered his career and made more money than me, whereas I didn't. So does he not 'deserve' more money than me?

No; I earn double my DH but we are one unit: a family, a team. For a while, he earned more than me, but we still pooled everything. There is no such thing as “my money” and “your money” in a marriage, all earnings are family earnings and go into one pot.

What's your husband like? Could you sit him down and say you're really worried about finances? Tell him you've had to use your credit cards to pay for ordinary things throughout maternity leave and that you are really struggling.

What would he say?

@Willtherebeoctobersnow

My car and my house. Why the face?

You both live in the house, insurance should be a family bill, as should the baby classes. Your husband should at the very last give you 50% of those payments.

I'm also confused, further up the thread you said the debt was 750 not it's 2000. Have I misunderstood ot got lost somewhere.

As for the house, if you're married it's a joint asset. If you split and divorce that asset will play into the financial split, so make sure your husband puts his fair share to everything house related

@Willtherebeoctobersnow

It is a different house Samphire and TBH this is why I didn’t really want to get into finances. It’s relationship advice I am after. If I pay half of everything and so does he fair enough.

So you have two houses, yours and the one you live in together?

Do you rent yours out, as really the rental income should cover mortgage, building insurance, rental insurance, annual fees and maintenance. Any left over should be spending money in your pocket.

What we have done has changed a lot over the years, from 50:50 of all shared costs, leaving one person with a lot more disposable income than the other……..

Then as things changed and we realised this want fair, we moved to proportional of take home pay, and one person still had more disposable income

And now we pool all money and have a standing order to our own accounts and this gives us the same amount of personal spends. Much fairer all round. We like this system.

Oh, and the person with the most disposable income has not been the same person . We have swapped places as jobs, circumstances, need to be at home has changed over the course of our long and happy marriage.

Fucking hell, I’m fed up with this place. Im desperate for help and I just get numbered posts about how I’ve posted all wrong and done it all wrong and should just speak to DP

That is not what people were saying at all.

Your finances sound like an absolute mess - or it might be the way you've described things here. There's debt (run up on maternity leave for DH's child... therefore he should have been contributing more to expenses so the debt wasn't run up in the first place).
There's your house which you rent out and you've moved into DH's. If you're married the house (your house) belongs in the marital pot as does his house.
You are contributing 50:50 while earning just a little over half of what he earns. That is not fair at all.

You asked people to suggest what they would do. A lot of people suggested that they have one family pot and everything goes into that, leaving equal amounts of spending money for both. You didn't like that suggestion and said you're not going to share and got annoyed with posters for suggesting it - but if that's what they do, that's what they would share as their idea??

Suggest that all expenses are now shared in proportion to your salaries but that must include all things to do with the children so that you're not having to shell out for everything they need, clothes, toys, clubs, childcare expenses - out of your lower salary.

You call him both DH and DP so it might affect responses according to whether you are married or not. I'm assuming that you are.

I think proportionate to income contributions are fair. The contribution should cover ALL joint costs. You mention expenses associated with another house in your sole name (not the marital home)that you think you should pay alone. But if you're married, that house is a joint asset, so the expenses also need to be considered a joint expense. A PP has helpfully split the shares into 13ths but factoring in the other house expense might adjust that again.

As for how to deal with your debt ... Any debt incurred as a result of your ML is joint and should be factored in as a proportionate expense. Debt incurred before you will need to consider if it was for your sole benefit or does your household as a whole benefit from the reason it was incurred i.e. A second car for the family? Professional/college fees that enable you to bring in a higher income?

If it's purely personal, frivolous debt then there's an argument that it's not joint but on the other hand if your ML or going part time has restricted you paying it off then discuss with husband as he probably ought to consider contributing something towards paying it off.

So that's household expenses. Now to consider disposable income. Really you should have about the same. Though in our household I earn more (about 30%) so I pay a bigger share of expenses but I also end up with more disposable income. However I also cover all "big ticket" stuff like holidays and house renovations. It wouldn't work for everyone but I'm good at saving (H isn't) and we are happy that is fair.

I do think that if one partner earns less because they are the primary parent then even more reason to share disposable income equally. But also if there is a huge disparity in income it just doesn't seem "fair" that the two partners have vastly different standards of living because (for example) one is a nurse and the other an investment banker. (If one is just workshy my answer might be different!)g

Oh, and baby classes, clothes etc are not a mum expense - they are a household expense!

I hope this helps.

Does your DH actually know that you are in debt and struggling for money? I mean we're all tutting at him sitting back and letting you struggle, but have you told him, in words of one syllable, exactly how difficult things are for you? Even if we had some sort of weird semi-detached financial arrangement, I couldn't sit back and watch my DP struggle for money while I was flush, and I know he would feel the same.

As it stands DP and I have a joint account for bills, that we both put a set amount into each month. He earns slightly more than me, so he puts slightly more in. The rest of our money is our own, but there's no question of one partner being left skint while the other is out treating themselves. We are a partnership, we look after each other.

We have had this issue for years. DH earns much more than me and pays most of the bills but things that aren't regular eg food shopping, house redecorating, holidays and meals out are always a grey area. He has way more money than me in savings. He moans that he pays for everything. I've been saying for years that we need a joint account and then it's fair! Both of our salaries go in and outgoings come out. We would probably have to ensure I was able to save a bit more.

If you are paying solo for another house you have, is the one you live in ‘dp’s? (They are both assets of the marriage legally). To me that sounds like youre paying off his and your house.
The car may have been bought before the marriage but while you were on mat leave the costs of it should have been supported by your dp, unless he volunteered instead to leave work and drive you and baby everywhere you wanted to go- every baby class, coffee date, weigh in, gp appt. this is what people mean by he should have paid. (Unless it’s a Ferrari perhaps but that seems very unlikely)

The consensus of the thread is that you should talk to your dh about your debt as well as the current split, as some of it is clearly due to him being stingy and not supporting you to look after his baby.
Re talking to him, 50/50 when you earn less and have stayed home to have his baby is pretty much abusive in my books. It’s setting you up to always be the lesser poorer partner. You will struggle to clear the debt while you are also effectively sending him extra money because he didn’t take maternity leave. Another baby without sorting out this problem would only make it worse.

As a start perhaps you could pick one debt component and explain it was incurred during mat leave, it was a necessary expense and he really should cover it. Eg baby classes and car payment costs (it seems very unlikely he would have happily driven you everywhere at any time)

We've always just pooled all our money. No separate accounts. DH used to earn more than me, but these days I earn more than him. I've never felt a need for separate accounts, but maybe if you need to budget carefully it can be useful to have your own separate account for personal stuff at least. But then I'd arrange things so that everything is paid into one account for household stuff, and one of the things that comes out is spending money into accounts for both of you. The same amount to both. I wouldn't feel right in a marriage where one had more money to spend than the other.

I think the issue is trying to pay half plus 100% of your things when he makes almost double what you do.

You: 2300
DH: 4200

Use the calculator on this page to figure out a fair percentage.
Using the above figures, you would pay 35% and he would pay 65%

sapience.com.au/blog/how-to-split-expenses-as-a-couple

He should have covered any baby equipment and baby group sessions if you were doing the childcare

@timeisnotaline

You’ve accrued debt because you were on maternity leave? If so, didn’t your dh add extra to cover the bills because you weren’t earning to have and look after the baby you had together?

So fucked up. Can't believe this happens to women and men are happy with this (actually maybe I can )

There are a number of ways that you can do finances:-

1. Completely one joint pot - everything in there
2. Each put everything into the joint pot and then an agreed fixed amount out each for “personal spends”
3. Have own accounts but pay all but £X per month into the joint pot where £X is agreed “personal spends” (effectively the same as (2)
4. Pay a proportion in according to your incomes - this leaves the higher earner with a higher amount each month but only proportionately
5. Pay an agreed amount each that is not exactly proportional to income but is not 50:50 either. 60:40 is often popular.
6. 50:50

There are two problems with 50:50 when you earn very different amounts. The first is that either the richer one has to live a lifestyle “below“ what they can afford or the poorer one ends up in debt. The second is that women often end up earning less due to maternity / working part time. This is usually for the couple’s joint benefit but the woman ends up paying for it.

Any of the others can work for a family. Personally we have always done (1) although if I was going back in time now I would choose (2) just because it would be nice to have some money that was completely mine. (I can - and do - spend freely from the joint account but sometimes it would be nice to have privacy - it’s dh’s birthday in a couple of weeks - quite hard to surprise someone when you have a joint credit card….)

I seem to be in a similar position to you in that DP and I live together, and I have my old house I rent out. We have a 2 year old, so fairly recent mat leave.

We do have joint incomes, though he earns more than me. I work less hours too. However, he can only work like he does because I am able to manage the majority of childcare, is this the case for you? If so, it's a reason for him to take on some responsibility for a higher proportion of the bills/ split bills.

With regards to the rental house, that income goes into a seperate account, which covers the mortgage/ house insurance/ repairs/ tax. Anything that's profit (ha!) is joint income.
Are you keeping the profit from the property as sole income, or is it a household income? If it's a household income, then the bills (make sure you include tax in this) are a household bill too, not just private.

With regards to the credit card debt run up on maternity leave- did he offer to take shared parental leave and cover the drop in wages for his portion of that time? As unless he did that, I can't see a reason why you wouldn't consider the costs as joint. Is it more your baby than his? As I've always considered our baby a joint baby, and therefore a shared cost- that definitely includes entertaining and educating them, as the baby classes were doing, or socialising them with meeting other mums.

As I say, we now share finances, were both our wages go into the joint account, and we both have £150 each 'spending money'. If you don't feel this is fair (I do, personally), could you look at doing similar but giving him a little more than you?

One other thing I do is the child benefit goes into my bank account, that is money for extra child stuff. I currently buy her clothes, etc from that, but you could consider using that as a way to pay the credit card.

I know you're getting annoyed at hearing people saying talk to your DP, but you're not going to find a solution unless you do.

Also, you say you're not being financially abused, but if your partner is able to put x away in savings a month, while you would struggle to buy a winter coat without a credit card if you needed one all of a sudden (for example), then I definitely don't consider that a financially healthy relationship. Sorry if that's not nice to hear.

Regardless of splitting household expenses proportionally to income, I couldn't imagine being in a relationship with someone struggling with debts and loans that paid for family purchases while the other partner has decent sums of disposable income left at the end of each month. Especially when you've got kids together, their costs should be joint expenses. It's just wasteful to be paying loan interest when between you you've got enough income for it not to be necessary.

And what do you do when it comes to family trips, holidays etc? Does your husband cover the cost for all of you to go away (seeing as you can't afford to contribute)? Or would he just go on holiday by himself, because you can't afford to go? What about any major household purchases, repair bills etc?

If you're both working similar hours and have significantly different incomes, then guess I can understand a higher earner feeling like they're entitled to have a bit more left over for their own hobbies at the end of the month. But not when household expenses aren't covered and the other partner can barely keep their head above water. Otherwise there's an argument for the higher earner to drop down the career ladder, take a less stressful job and even up the contributions that way. Or even to go part time, match up your incomes and give themselves more free time/family time.

I've got a very similar income to my partner, our finances are entirely separate, but I still lent her 4k recently to clear her credit card debt. The interest rate was eyewatering, and I'd rather lend her money from my savings so she can save money from the lack of interest, and then she has more money to pay her share of things we do together, like joint holidays etc.