Budgetting with somebody with a poor credit rating

scottyboy84

Morning all, just looking for some advice.

My fiancee and I are looking to buy a house next October( currently renting) we're in process of saving a deposit, we have £27,000 at the moment however we have separate bank accounts etc, and she pays all house hold bills from her bank, I transfer her my element towards this, we get paid different days in the month too, hers in middle of month and mine at end of month, her credit rating isn't great but she is doing her best to improve this, would it be sensible for us to get a joint bank account for all household bills to budget easier? she's just concerned that her being linked to me in a bank account which may affect my credit rating which is pretty good.

Any advice would be great.

DullGreyGuy

Your going to be buying a house together then you will become financially linked at that point anyway and so its only accelerating the inevitable. 

Not sure how a joint current account will make it easier for budgetting bills? Presumably they all come out of a discrete account that you both pay your share into and so there shouldnt be a problem unless you're just paying into her normal account and she's dipping into that money for things other than the shared bills?

scottyboy84

DullGreyGuy said:

Your going to be buying a house together then you will become financially linked at that point anyway and so its only accelerating the inevitable. 

Not sure how a joint current account will make it easier for budgetting bills? Presumably they all come out of a discrete account that you both pay your share into and so there shouldnt be a problem unless you're just paying into her normal account and she's dipping into that money for things other than the shared bills?

Thanks for the reply, we've been together 4 years, living together 2 years, have transferred my share into her bank and bills are paid start of the month, she's never missed one so there's no fiddling with it from her end but just thought it may be beneficial to have it all come from a joint bank account including food / fuel etc then we have our separate bank accounts for our own direct debits etc.

DullGreyGuy

scottyboy84 said:

DullGreyGuy said:

Your going to be buying a house together then you will become financially linked at that point anyway and so its only accelerating the inevitable. 

Not sure how a joint current account will make it easier for budgetting bills? Presumably they all come out of a discrete account that you both pay your share into and so there shouldnt be a problem unless you're just paying into her normal account and she's dipping into that money for things other than the shared bills?

Thanks for the reply, we've been together 4 years, living together 2 years, have transferred my share into her bank and bills are paid start of the month, she's never missed one so there's no fiddling with it from her end but just thought it may be beneficial to have it all come from a joint bank account including food / fuel etc then we have our separate bank accounts for our own direct debits etc.

You will find many threads on here about how couples divide up bills and/or the remainder of their salaries after the compulsory bills have been paid. 

Some think whats mine is mine and if I have a higher paid job than my partner I deserve to have more spending money than them, some think it should be a strict 50/50 and others are very relaxed and accept their partner spends much more of their combined incomes than they do (even if they are earning more than their partner).

If you decide to link your finances before buying the house have the conversation of how you are going to divide up the money before doing it. Whilst everything separate you are kind of forced into one mode of operation but that changes when two people's money go into a common account. Last thing you want is a falling out because you left £500 in the account for something you were intending to buy when the sales starts next week only to find she's spotted the account is more liquid than normal so treated herself to a couple of new dresses and your £500 is now gone. 

scottyboy84

DullGreyGuy said:

scottyboy84 said:

DullGreyGuy said:

Your going to be buying a house together then you will become financially linked at that point anyway and so its only accelerating the inevitable. 

Not sure how a joint current account will make it easier for budgetting bills? Presumably they all come out of a discrete account that you both pay your share into and so there shouldnt be a problem unless you're just paying into her normal account and she's dipping into that money for things other than the shared bills?

Thanks for the reply, we've been together 4 years, living together 2 years, have transferred my share into her bank and bills are paid start of the month, she's never missed one so there's no fiddling with it from her end but just thought it may be beneficial to have it all come from a joint bank account including food / fuel etc then we have our separate bank accounts for our own direct debits etc.

You will find many threads on here about how couples divide up bills and/or the remainder of their salaries after the compulsory bills have been paid. 

Some think whats mine is mine and if I have a higher paid job than my partner I deserve to have more spending money than them, some think it should be a strict 50/50 and others are very relaxed and accept their partner spends much more of their combined incomes than they do (even if they are earning more than their partner).

If you decide to link your finances before buying the house have the conversation of how you are going to divide up the money before doing it. Whilst everything separate you are kind of forced into one mode of operation but that changes when two people's money go into a common account. Last thing you want is a falling out because you left £500 in the account for something you were intending to buy when the sales starts next week only to find she's spotted the account is more liquid than normal so treated herself to a couple of new dresses and your £500 is now gone. 

Thank you for the detailed response, that's really helped me understand things better.

Rob5342

I'd say a joint account for bills and food etc is sensible as then you can both look at it freely and know how much everything costs ready for when you do your annual utilities switches. It also makes shopping easier as you can both buy joint things whenever you need to.

Sarahspangles

Budgeting together and having a joint account are slightly different things. Do you each know already what the other spends?  If you’re taking on a mortgage soon and money will be tight, it might be better to gain that understanding now.

Do you understand why your fiancée’s credit rating isn’t good? It sounds like she’s a bit concerned about it. For example, sometimes people assume they are solvent when actually they use credit cards as a ‘float’. To ensure this isn’t happening, you could check that at the beginning of the month, each person has their salary from the previous month untouched, and also enough to pay off their credit card balance in their account. When you apply for a mortgage and they do the affordability checks, if you’re using your overdraft or have a rolling credit card balance, even if you pay it off each month, that can reduce what they will lend as they see it as servicing debt.