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

We do option 1 split % based on salaries. We are married, but we've always done it this way, we each have enough fun money. If my DH wants more, then he needs to push for promotion or a new job, same as me in my opinion.

option 2 - if people are serious about spending a life together then share it all

Option 2.

Everything me and dh earn goes into one joint account which all bills / food shop etc come from.

we then take the same amount from the joint acc and put it into our own accounts and that's ours to do with as we wish.

Agree. We do option 1 too.

Surely you’re both trying your best for promotion when it suits the family? I’ll be remaining at my current level for a few years to focus on children, but I’d be really upset if my husband thought this meant I deserved less spending money.

We put everything into one joint account and everything comes back out of there. Money gets transferred from that to one joint savings account, and we each have a credit card. We discuss larger purchases, but otherwise it's family money.

We both work full time, and for both of us promotion is more money but basically the same job. Still 37hours a week, so no reason to wait. I am slightly more ambitious than he is so i have continued working up the grades since my 1st child. He has chosen not to, which is fine as a couple we earn enough for our lives. But if he wants more spending money, its within his reach if he wants it.

I have stayed full time through 2 kids, we pay for nursery, i wouldn't ever go part time or reduce my earnings

We did option 2 since moving in together, though the personal spends dropped off at some point and we just spend from the joint account. However, neither of us are very frivolous and we would discuss anything major. We got married and had kids since so salaries have changed quite a bit and this approach meant no recalculating or negotiating at each stage!

Option 1 for us. We've always had separate finances except the joint account which is where we transfer our share of mortgage, nursery fees etc.

Everything else stays in our personal accounts to spend as we please.

I earn more than him, not by as much as 20k though.

We do option 2.
the lower earner is always better off doing option 2 than option 1.
I know people who do both but option 1 always makes me a bit sad for the lower earner. I am the higher earner by far and I can’t imagine being married to somebody and having hundreds of pounds spare each month while my DP had far less.

Option 3 for us , we pay 50% even though there’s a salary disparity - I save a lot each month which will mutually benefit us both on retirement

It’s not though - because there’s no transferring of anything back, and there aren’t even accounts to transfer back to.

We do the same - one account, all money into one, and we both spend what we need.

We do option 2. Sometimes I’ve earned more, sometimes DH has. Option 2 always benefits the lower earner - I’d say within a long term partnership particularly with children, option 2 is also almost always fairer because statistically having children - which equally belong to both of you - tends on average to improve men’s incomes and freeze or decrease women’s incomes, even in the long term.

We both get paid into our own accounts and then 80% of whatever we earn goes into the joint account and the rest we keep for ourselves

Sound like you have a decent partner there which is nice to read about!

If you are both putting £6k into the joint account what is happening to the money you don’t spend? Will it be split equally if you parted ways? For example if you split up and had £6k left after all bills paid, do you get £2.5k and him £3.5k. Bearing in mind a joint account of that much would be accruing thousands each month.

Option 2 for us since we became permanent before marriage. At that stage I earned much more than him.

We’re a team - neither of us wanted one of us to be able to afford things that the other couldn’t. And we’ve both been divorced and know that once you are married everything is in the same pot anyway.

The only exception is hobbies and side hustles that we get paid for (both have more than one) which we keep for our own spending. But in reality now many years down the line we have individual savings that we regularly tip in together for holidays etc.

We do neither, it's all "our" money. I earn a lot less (after tax and pension about 1/6!) he pays for the big stuff and I pay for day to day shopping etc plus my car and gifts for my dc, family etc. but if I'm running low he'll transfer me money. Seems to work so we haven't bothered with a joint account. We have no mortgage though so much of his income goes into savings and I save 20% of my income for retirement in hopefully 4-5 years.

If you are considering children then option 1 isn't a good idea. What happens during maternity leave when you're on 50% pay or less? Ditto if you reduce your hours. You might end up getting a % of very little.
Option 2 is always the fairest.

You will be better off financially in option 2 but 500 seems random, do the sums properly and see if you'd be left with more change splitting it as percentage or keeping 500.

It's whatever you are happiest with

Personally I earnt 3x my ex husband - I worked bloody hard for my career whilst he coasted and had zero ambition to better himself. Why should I have topped up his spending money with mine when he couldn't be bothered to work harder to earn more??

We split the mortgage/house costs 50/50 because at the end of the day in a divorce they are entitled to half the house and then I picked up some of the larger expenses like house repairs, childcare etc. I came away with more spending money

I'm saying that my personal opinion is that I would want to have full control and the only access to my money until the 'other party' (male or female) has made the ultimate commitment to me, to US, by entering into a 'legal contract' (marriage). As it was at the time (we've been married over 35 yrs) I was 'slightly' the higher earner but not by much.

I guess I'm a believer in 'shit happens' as well as 'prove yourself to me'. A wedding ring on one's finger is a sign of commitment, of the person saying 'unto death do us part'. If you're just living together there is such an 'easy out' whereas divorce is HARD and has legalities around finances. No such guarantee with living together. I know, marriages fail and living togethers can last a lifetime. But I liked the 'odds' that marriage brought me all those years ago and my 'gamble' has paid off.

So technically yes, I suppose financially you might be better off under option 2, if we assume that you wouldn't have at least $500 per month left over for 'fun money' after the 'percentage split' of option 1. You'd have to calculate your monthly percentage to know what you'd have leftover under option 1 before you can judge that. If under option 1 you'd have $300 leftover, then theoretically option 2 might be better because you'd have $200 more. Under option 1 the amount HE has leftover is irrelevant even if it's $1000. Because option 1 to me is about retaining control of your finances, not about who has more to 'play with'.

Under option 2 you are giving up sole control of your finances (so is he). A joint account means that either party can spend whatever they want whenever they want. So if he or you wanted to buy something that might make things 'tight' for a month or so, or spend money on something the other disapproves of there would be nothing the other could do about it. Or (God forbid) if he (or you) should turn out to be untrustworthy and clear out the account and run off to Zanzibar, there wouldn't be anything you could do about it either, if you were unmarried.

You see, it's not all about 'pounds and pence' when one contemplates joining finances. It's about self security and financial independence. I was a full time working mum on a very good salary and kept working until I retired. I will say that IF a woman (or man) chooses to be a SAHP then joint finances are an absolute necessity, married or single. But I wouldn't choose to have a child without marriage unless I knew I was financially capable of raising that child on my own.

DH was (and is) trustworthy and honourable. I made the right decision both in marrying him and in trusting him with my financial wellbeing as well as my heart, as did he when he married me. You need to think in terms of decades, not months. And lots of brutally honest 'what if' conversations with your partner right now, before you make a decision.

Sorry for the 'verbosity', but next to having a child this may be the most important decision you ever make.