How would you split finances?

[crochetbikini]

So I will start by saying I am in an incredible fortunate position by an unfortunate health incident which paid off my mortgage. I am trying to work out how to split bills its not just about it being fair, everyone feeling comfortable and interested to hear other peoples experiences.

I am F36, my DP (47) lives with me in my home, he has a EXW and 2 DD's (18, 20). Thankfully they sold the family home and his ex bought a new place but he is still paying £400 p/m to her whilst his DD finish Uni. We live in my house that is in my name only, the health issue for me was a shock and obviously the pay out is brilliant but I do have life long treatment.

I work full time earning 55k, my DP works full time but runs his own business and the money is up and down so its hard to say what his income is but probably £35k ish sometimes there are brilliant months and sometimes there is nothing so he just averages out what he needs to take from the business.

How can we fairly split the bills? We are currently just bumbling along in a state of shock. When he moved in with me he was paying 100% of his family home (as if he lived there) and I paid 100% of my home we were both really stretched for a couple of years. So all the household bills are in my name and come from my account and he wanted to pay for all the food shopping as his DDs came over all the time before they went off to Uni...

This is the definition of a first world problem and I am not complaining. But what do we do - do we 50/50 the bills... but I earn more and this is my home. I dont think I would want to charge him 'rent' or whatever. Shall I just pay the bills and he pays the food? his outgoings for car, DDs, phone, gym, etc are probably more than mine now BUT none of those are household expenses.

Any guidance as was not expecting this to happen at this stage of my life!

It sounds difficult!
Here are some options, for what it's worth. First of all: I assume bill means day-to-day; investment (repair the roof...) is something else.

• option 1, go for simple : 50-50 the household costs, the house is and stays yours. Your higher earnings will be needed on the day you need something for the house, as remember, it's yours.

• option 2, count a lot of things. Separate his outgoings, yours (his car... his gym... your car... etc) only split what is too difficult to account for, eg food bills.

• option 3... a cross of 1 and 2. Decide whether his car, your car, are really the couple's, etc.

A word of investment. Small bills are fine; big ones, that can require borrowing, can be poison. One option is to take a leaf out of businesses: if something happens that requires money, set your home as tenancy in common. You own 100% of it, but issue a new "part" in exchange for 1/100 of the value. He invests it in the house, you own 100 parts and he owns 1. It's possible to trade parts too, and that becomes a way to rebalance finances between you.

You are both independent adults, with no kids at home, neither of you sacrificing your earning power for the other. So I see no reason to subsidise each other. If your earnings were five times his, then maybe. But you have health issues and the possibility of needing to do major house repairs, so you need more savings and earnings, and he is already getting to live rent free in a home he hasn't paid for.

I think absolute minimum is fifty-fifty split of daily expenses, but actually I think he should pay more. I find it is useful to quantify the gains on both sides, rather than worry about the incomes and all those details. My principle is that Both of you should gain financially from living together.

But 50-50 gives almost all the gain to him. He's living rent/mortgage free in a house he didn't ever contribute to, while you are simply not paying his half of daily expenses. Your outgoings would be very close to the same amount if you were living alone, especially as you are losing your single supplement on council tax, and his daughters visit frequently. Whereas if he were living alone, his outgoings would be massively bigger. So the gain is mostly his, on a 50-50 split.

On top of this, I think it would be wiser to keep responsibility for major repairs alone, as it is your asset, and that keeps it clearly as your asset. But this is another advantage for him - he doesn't need to pay for repairs in the house he is living in or worry about major unexpected expenses.

Where is your financial advantage? I would suggest you make a rough calculation by how much you both should gain financially from living together versus alone. Then split daily expenses to achieve this.

@bosqueverde thank for the reply the options are really helpful to see it set out clearly. It is helpful I think for us to map the scenarios to ensure that we can level on something that works for both of us, that is fair and also doesn't cause a future argument or resentment. I will certainly look into the tenancy in common its not something I have heard of before.

@financialcareerstuff what you have written really has given me food for thought and I suppose in some ways I was trying to think how I articulate it but what you have written has made all the thoughts I was having make sense. I want to create the balance, come to an agreement then it helps our relationship in the long run. I think he is feeling confused about how he fairly contributes without feeling like a freeloader - (that is how is feeling now)

I have my bills and expenses in a spreadsheet so easy enough to sit down and get this sorted sooner rather than later

I would work out the annual household spend on bills and food then break that down into an average monthly spend and between you pay that amount in a new joint account every month, the account only to be used for shared household expenses.

The split could be 50/50 but a more fair way might be proportionate to your incomes say 60/40.

Supporting his children should not be taken into consideration for the calculation as that would mean you would be subsidising his child support (which indirectly you already are by not charging rent.)

He should not be expected to financially contribute to the maintenance and repairs to the house - as he has no legal interest in the property.

He should pay council tax but only in so far as the difference between what you would pay as a single occupant and the full rate of council tax.

This is what I personally would consider fair based on the info in your post.