Joint Finance

JamieStarr_2

I'm a newbie and I wanted to find out what the best way to organise joint finances in a relationship. I seen a quick tip on this site which advises not having joint accounts and mortgages. But I've haven't found an article telling me what to do instead...help.

Spendless

JamieStarr wrote: »

I'm a newbie and I wanted to find out what the best way to organise joint finances in a relationship. I seen a quick tip on this site which advises not having joint accounts and mortgages. But I've haven't found an article telling me what to do instead...help.

Where's the tip? What works for one couple, might not work for another. You have to find the solution that is workable for you, and also remember that this may change over time, if circumstances changed eg ill-health/parent-hood/redundancy/becoming a student.

Mine and OH accounts are shared, I don't work, at home looking after kids so only child benefit and tax credits in my name. My husband hasn't got the faintest idea what we have or haven't got in the bank cos he's not interested in sorting out day to day finances. Single accounts would not work for us.

doraexplorer

myself and my boyf have 2 accounts one is a joint account which his wages go into and another account (my account) which my wages go into. he earns far more than me so this works for us . he pays 90% of the bills . we use my bank account for saving and holidays, treats etc. this works for us because hes a spender and i am a saver and if we never had this we would be skint. this works for us and another thing i deal with all the bills so boyf knows nothing regarding what we pay out each month .

this way i always know we have money if we need it. we have two kids so i would never leave us with no money because i always know i have some in my bank ....

hope this help x

freebie_junkie

me and my oh have an account each for our personal money and a joint account into which we both transfer half of the bills. each month i calculate how much weve spent on stuff that changes month to month (pre-pay leccy and gas, groceries, birthdays etc.) and he puts in half of that plus half of the unchangable bills and i make sure theyre all paid. we dont spend each others personal money and even though he has a good job and im a student id never ever ask him for money or to pay for more stuff than i do (except sky sports coz id rather cut off me eyes than watch it and i give him petrol money for taking me on driving practices as i dont yet have my own car) this is coz im the money saver and lived alone here for 2 years before he moved in and it works fine for us, but you need to take into account your different circumstances and personalities.

belfastgirl23

Depends on your attitude to money and what financial commitments you share. I think a joint account is hard to beat if you have a mortgage since you will have so many joint financial commitments that it's simpler just to transfer in a set amount each month. The main reason not to do this would be if you don't want to be financially associated with your partner eg if either of you were seriously in debt and the other needed to keep a clear debt record. Of course if you share a mortgage you will be financially associated in any case.

for myself I prefer us to have personal accounts as well as a joint account since I hate the thought of not having my own money but other people won't feel this at all.

I'd say the most important thing is to talk properly about money. Having a sound basis to work from is important. You both need to know how you are with money - saver? spender? and find ways to manage any differences. Money can be the cause of a lot of rows so you're right to try to figure it out now!

JamieStarr_2

Thanks for this. The tip that I mentioned can be found here: http://www.moneysavingexpert.com/tips/27-09-2006/.

We used to have a joint account but I found that our attitudes to spending on it differed. I liked to occasionally query what items were spent. However, she felt that I should not be asking. So we agreed that I would take on more of the large bills i.e. mortgage and utilities etc and abandon the joint account. Whereas, she took some of the others. This was so that we would be individually accountable for the money spent. I still don't feel that is equatable or fair. So I'm thinking of going back to setting up a joint account where we pay in a fixed amount each month to cover joint expenditure. If this is indeed the best way to deal with joint expenditure.

I suggested that we put in an equal amount. However, she does not think an equal amount is fair because I earn more than her. So I suggested that we put in an equal per centage of our salary. What should I do? I want things to be fair for both of us. What's it to be 50 / 50 or an equal percentage of our salaries or is there another way?

honeypop

Like you suggest, me and OH have our wages paid into our own accounts then transfer a lump sum into joint account to cover all bills (monthly bills and a monthly equivalent amount to quarterly/annual bills), this is on a 60/40 split as I earn more than OH. What's left in our own accounts is then ours to spend as we wish, or to combine with each other for large one-off purchases, holidays etc.

So, (using example figures) I earn £30,000, OH £20,000, joint income = £50,000. This is a 60/40 split of what we bring to the total.

Bills = £1550pm (including an amount for random household purchases or emergencies)

So I would transfer £930 into the joint account per month and OH £620 (60% of 1550 and 40% of 1550).

What's left in our own accounts is ours to spend however we want to, plus pay our own mobile bills, life insurance, loan amounts, car insurance, tax, petrol, going out etc, as they are our own expenses to pay for.

Yes that means (in theory) I would pay £310 more into the joint account, but I would be earning £10,000 than my OH. It also means that he wouldn't be left with little money each month if we split everything equally even though I earn a lot more.

This principle should work fine for you and your OH. Add up your total monthly outgoings relating to the house (usually mortgage/rent, council tax, building and contents insurance, telephone, broadband, sky, gas, electricity, water, tv licence, food, plus anything else you pay for) and split the total into the percentages of what you each bring to the joint income.

Hope this makes sense.

morg_monster

My bf and I rent a flat. Originally we earned roughly the same wage (23k, 26k) and so we both put £600 a month into a joint account, this paid for all bills and rent and usually about £50 leftover for groceries. Other supermarket bills, we write our names on the receipts we'd paid for, save them and then at the end of the month settle up.

Now, my bf has had a promotion and is earning 43k (OMG!!!!). We did think about doing a completely proportional split, but this would mean my contribution would go down, which I didn't think was really fair, because I can easily afford the £600. Instead my BF is going to put an extra £100 in every month, so all our food shops will be covered and there'll be a bit left over for a meal out or something every month. That way I'll save money too.

If bf wanted to move somewhere more in line with his new bling income then I would expect we would go completely proportional, but as we are happy staying in our little flat i think this is fair.

My suggestion if you are worried about your other half's spending on the account, is to say this account is JUST for bills and NOTHING else (not food, not buying things for the house like a CD rack or whatever(!)). That way, you don't need to carry the debit card around with you - everything will be going out by direct debit or you can pay it online or over the phone. Hopefully if you agree on this rule, then you can't argue about what is being spent (unless its a huge phone bill or something!). Food and other bits and bobs you can then split at the end of the month and then argue about whether you should really pay half of the DVD your OH bought at tescos ...

lex

My OH and I have separate accounts and joint accounts. We both put the same amount into the joint account and this account pays the mortgage and all bills. This includes anything household related...Food shopping, electricity, pet insurance, mortgage, childcare etc. Also decorating expenses & furniture etc. If there isn't the money to buy furniture etc - it doesn't get bought!!

However we set up this scheme 7 years ago, and now I earn significantly more than OH. I think it would be fairer if we put a % of our income into the account. However at the moment, I will use the spare money I have to save up for a family holiday. Usually holidays would be saved up out of the joint account. There are a few other complicating circumstances at the moment, but I like the joint account approach.

Also I have more responsibility with money, and OH would spend what he has left...so this way we don't have arguements about buying unecessary items with joint money. We both buy our own gifts and treats.

HTH

lex

DebtphobicDeirdre

Everyone needs to do whatever causes least arguments. Life is tough enough without arguing over money. We have just one joint account and I expect complete access to all money. This doesn't result in no arguments, I do sometimes get hauled up for overspending and not saving enough, but I'm convinced we would row more if I had to ask for money (I earn much less).