Blended family splitting bills

Tinmanmoneymaker

My partner of 2 years and I have purchased a house and are blending a family. We both have 2 children who live with us full time. Our relationship is very good but we are unable to agree on finances. 

By moving into this house my partner will lose tax credits and child benifit due to my earnings.

We are deciding how to split the bills if we proceed with the new house. We are both matching the equity to put in the house although we may rent her house out which would give us another income although our bills will be higher. 

We will both have a 50% stake in the property we will be purchasing. 

Need help with ideas how to split the mortgage and bills? 

pjs493

Why would you not combine finances? Is there a reason why one of you doesn’t want to do that? As a cohabiting couple you’ll certainly be judged on household income for a range of things eg the tax credits and child benefit you mention. 

It personally seems unusual to me in this situation why a couple would buy a house together but wish to keep finances separate. Is there a reason why one of you is happy to commit to owning a house together, but not sharing finances? 

 Obviously for the purposes of HMRC, if your partner owns her own property in only her name, any rental income would have to be declared solely by her on her tax return unless you both took steps to share the ownership and income from that property. 

sheramber

What income does she have apart from tax credits and CB?.

Will half the mortgage payment be less than she is paying for heer house  at present

DullGreyGuy

There's no right answer, it depends what works for you. 

Some will split everything 50/50
Some will split it proportional to income
Some will have one person pay everything, particularly if incomes are very uneven

There are many threads on the same topic, you can get plenty of ideas and options but ultimately the two of you are the only ones that can come to the agreement.

housebuyer143

It's what works for you and is agreeable to both parties. We pool all income and then deduct all bills, then split whatever is left 50/50. That way we have our own money and savings but have an equal share to do as we wish. My husband works more and earns more than me, but I'm a carer for our son so there is no way I can go out and earn enough so I contribute to the house in other ways. We changed this once we had our son, but before that we paid everything 50/50 although we were on similar income back then.

Newbie_John

We pay 70% to joined account and use it for bills, food, nights out together etc. when my partner's earnings were quite low (the remaining 30% wasn't enough) we switched to keep 30% or £700, whatever is greater.

Various approaches, whatever keeps you both happy. 

gwynlas

In hindsight you should have had this discussion before purchasing together and the partnership is relatively new. If the deposit and mortgage are 50/50 then you need to reach agreement on everything else.Your partner should ideally forget about tax credits and child benefits as they chose to move forward jointly, How about splitting  remaing bills proportionate to current income with you each having a sum for personal spends/,All bills relating to children from joint account otherwise fact that teenagers cost more than toddlers might become an issue.If second house being retained then rental income after expenses should be included as part of your partners total income. Have you made wills?

Exodi

To give our personal method - we have a sheet that that totals the bills and our income and then have three different calculation methods which we switched between through over the years.

1. Equal amount - this was what we started, and means we each pay the same amount of half the bills. So if bills are £2k in total, we both pay £1k. Obviously this works better if you earn more similar incomes.

2. Equal percentage - this is what we progressed to, where we take our bills and work it out as a percentage of our total net income. So let's say our bills were £2k per month and our household net income was £4k per month, then each person would contribute 50% of their income towards the bills.

3. Equal remainder - this is where we end, where we minus our bills from our income, and then split the money that is left. So as above if our bills were £2k per month and our household net income was £4k per month, then each person would keep £1k from their pay and put the rest in.

The reason for not doing purely joint finances is because we didn't like some of the implications. For example, my wife likes to spend a lot of money on clothes. In the situation where we have purely joint finances, she would feel guilty regularly taking from the joint account for this sort of personal spending. Likewise if I lost the plot and decided to buy a new £2k coffee machine, I wouldn't want her to feel like she's effectively paid part of it against her will. Of course we can ask each other permission to buy things, but that's not ideal either. So we discussed and decided we'd like to retain some 'personal money' one way or another that can be saved or wasted as we choose.

In practice, our outgoings in the above examples include things like joint savings and budgeting for things like holidays, car insurance, etc, so the amount we have left over is usually £500ish each. This is just us though, as @DullGreyGuy perfect encapsulates:

DullGreyGuy said:

There's no right answer, it depends what works for you. 

Some will split everything 50/50
Some will split it proportional to income
Some will have one person pay everything, particularly if incomes are very uneven

There are many threads on the same topic, you can get plenty of ideas and options but ultimately the two of you are the only ones that can come to the agreement.

The only last thing I would add, is that this forum can skew a bit... wiser? Possessing more life experience?... OK I'll cut to the chase - Older (about 2/3rds of people are 50+, and over 40% are retired, see https://www.moneysavingexpert.com/poll/2023/mse-annual-census-2023/ )

Meaning usually in threads posing this sort of question, you can get a fair few responses along the lines of "what's mine is hers" and "everything goes into one pot, it doesn't matter what we each earn", etc, etc. Which sometimes devolves into derogatory comments implying a relationship is not real or serious unless finances are joint.

I'd just recommend taking advice with a grain of salt - that said, this thread is quite tame so far!

caprikid1

It is difficult.

My situation

1. Partner a widow - with two young children full time, higher earner.
2. Me two teen age boys who have left school now with us 50% of the time.

Neither us are on bad salaries, both put in equal equity. Currently its about  53% 47% split.

We both have income outside of our main jobs.

Cannot see us ever combining finances fully.

nicmyles

As others have said, lots of different ways to do it, none objectively the best way - whatever works for you.

My wife and I roughly split everything 50/50, but we don't lose a lot of sleep doing sums over it. Other than mortgage, we have separate finances apart from one joint savings account.

Bigphil1474

My partner and I have completely separate finances. We've always preferred it that way. I work full time and earn a decent salary, the OH has a small income. I pay about 80% of the bills. The house belongs to my OH - we are buying a new house and aiming to put 50/50 into the new house by me paying the mortgage entirely as I will put less equity in. Essentially, the new house will be bought equally and then I will continue to contribute more to bills and they will contribute in other ways.

Interesting that you say that you may rent her old house out and that will be an income for both of you? If you are buying the new house equally, then I would see that as part of her income to contribute to the joint household finances as she pleases. Personally, I'd go down the 50/50 route for mortgage and bills if you have similar income whilst all 4 children are at home, then adjust accordingly.