Finances When Moving In

HappyHandsMM

In that case, what do you believe would be a fairer way of splitting the finances?

JayJay100

HappyHandsMM wrote: »

Hi all,

Looking for some advice here on splitting of finances when moving in together.

My partner is moving in with me as an interim measure to getting a place together. The idea is that living with me will enable her to save some money so we will have money for moving costs and rental deposit on a new place. I earn double the amount she does. She could earn more, but chooses to do the job she does as she enjoys it more than the alternatives. I'm not particularly happy in my work, but it pays my bills and the money is good.

I said she could move in with me and just pay increased costs (council tax, and if the bills go up) as well as splitting the food bill. As I have some debt, it was agree that we would each keep £x as 'pocket money' for the month and the rest of mine (after all rent and bills) would go on paying off my debt so that we would be in a better position financially if later down the road we decide to buy. She agreed any excess she has would be saved, as per the original agreement.

However, she has now said that rather than saving the money, she will use it first to pay off her debts and then start to save after that. Whilst I see her point, I can't help but feel I'm getting a raw deal out of this now. I'm effectively letting her live with me for free with 0 benefits other than having her with me (which obviously IS a massive benefit... We are in love after all.)

Long term, she says she wants the plan to be that once my debts are paid off I continue to put that money aside as savings for a deposit to buy, holidays etc. The amount I save is likely to be double the amount she does. As an interim step, we are likely to move to a bigger rental and she has said at that point she'll pay the difference in rent between my current and the new place, meaning she likely won't be saving at all at that point.

What are your thoughts? Am I being unreasonable for feeling like this is a little unfair? If I mention it, generally she will get upset and tell me that it's not her fault she earns less than me and that I make her feel inferior etc etc.

Thanks,

HappyHandsMM

When I first met my OH, he was struggling to pay off the excessive debts that his ex wife had run up, and he had no excess cash at all. I had a good job, and was on more money than him. When we knew we were for keeps, he moved in with me, and he paid a token amount towards the additional costs incurred towards food, council tax and bills. Most of his cash went into clearing the debts. If I had surplus cash, that went towards the debts too. Once the debt was clear, we split the bills on a percentage basis, which meant that I had more money in my pocket, at the end of the month. I paid for the holidays, and for more when we went out and about, which was my choice.

A couple of years later, he got a promotion and was on more money than me. The percentage was split to reflect that. When I was made redundant, he stepped up and paid 100% until I was back in work. When I was looking for work, he encouraged me to do something that I loved, which was a lower paid job, and the percentage was adjusted again. When his son moved into his own home, we used our joint savings to give him a lump sum, and I wouldn't have had it any other way.

I just see this as team work, and we're pulling together. If we hadn't looked at it as 'our' money and worked to a plan, he would still be struggling to pay that debt off, as he was on minimum payments after paying for everything else. It never crossed my mind to do this in any other way.

fairy_lights

Surely it's better for you both to pay off your debts before you decide to combine finances with a joint savings account? Those debts are going to need paying off eventually, whether you save now or later money is going to need to be put towards them. Surely it's better to do it now before they accrue even more interest?

marliepanda

HappyHandsMM wrote: »

In that case, what do you believe would be a fairer way of splitting the finances?

To me a fair way is splitting everything in half and doing what you want with the excess.

However, whats fair after that is subject to interpretation. Is it fair if you pay off debts and have no luxuries, and she spends hers? Is it fair for you to tell her what to do with her excess money?

Maybe as you earn unequal amounts it would be best to 'pool' resources, take out the bills money, allocate some pocket money and then pay off the highest interest debts first and work along that way, then save.

Is it fair for her to contribute to joint savings and you not contributing? Or does your paying bills negate that. Surely that could leave her further down the line with debts and no savings if its all joint and you have it?

Basically there is no one answer.

HappyHandsMM

fairy_lights wrote: »

Surely it's better for you both to pay off your debts before you decide to combine finances with a joint savings account? Those debts are going to need paying off eventually, whether you save now or later money is going to need to be put towards them. Surely it's better to do it now before they accrue even more interest?

My debts are interest free, and I have a stable plan in place to pay them off before interest is accrued so I don't feel the need to increase my payments and cause myself unnecessary strain to pay them off sooner.

HappyHandsMM

marliepanda,

I like the idea of paying all into one account, taking out the bills and pocket money and then deciding what to do with the balance as a team. Anything left could then be treated as joint savings. Somehow feels much more transparent.

I actually hate all this 'my money, her money' stuff. I refuse to sit down and work out 'I owe you £x for x, y, z but you owe me £x for a, b, c...' to my mind, it's all the same in the end and if one person ends up with more cash than the other at one point in time, we'll help the other out.

I guess my thoughts were kind of jumbled up there as that's not consistent with my first post. Perhaps I just like to feel like we have joint control? Hmm :-/

JayJay100

HappyHandsMM wrote: »

marliepanda,

I like the idea of paying all into one account, taking out the bills and pocket money and then deciding what to do with the balance as a team. Anything left could then be treated as joint savings. Somehow feels much more transparent.

I actually hate all this 'my money, her money' stuff. I refuse to sit down and work out 'I owe you £x for x, y, z but you owe me £x for a, b, c...' to my mind, it's all the same in the end and if one person ends up with more cash than the other at one point in time, we'll help the other out.

I guess my thoughts were kind of jumbled up there as that's not consistent with my first post. Perhaps I just like to feel like we have joint control? Hmm :-/

The only problem with this is what happens to the joint account if you split up. We agreed on a 50/50 split. That was fine, but at one point I'd put in over 90% of what was in there. I knew it, and I was happy with it, but it's not right for everyone.

lika_86

If you were living alone before and coping with your outgoings and now she's moving in, then the only difference should be the increase in bills, right?

In that situation I would have her pay the increase in bills with any money left over going to her debt first and then savings. I would sit down though and work out how long it will take to pay off at a steady rate and how much can be put to it whilst still allowing her a reasonable amount of spending money. The important thing to remember here is that the interest rate on savings is practically nothing whereas (unless on a 0% deal) credit card/loan interest is much higher. She would lose money by saving rather than paying down debts.

Yes she's getting a lot of benefit of living with you but you will be no worse off this way (and get to live with your partner).

Jenniefour

HappyHandsMM wrote: »

In that case, what do you believe would be a fairer way of splitting the finances?

Discuss possible options together until you find an agreement you can both accept. Preferably without giving the impression that your debt is priority and hers must take a back seat.

Sarastro

HappyHandsMM wrote: »

She could earn more, but chooses to do the job she does as she enjoys it more than the alternatives. I'm not particularly happy in my work, but it pays my bills and the money is good.

There's your problem. Fundamental difference in values. She's doing what she enjoys, your doing what pays the bills. Sort that out - everything else will fall into place.