what gets paid from joint account

Exodi

This question does not have an objective answer, and every relationship is different, but it is a subject my partner and I have discussed a lot and we've always been on the same page throughout our relationship.

We effectively have a three stage plan, and this also addresses the issue that it's not reasonable to consider a couple that's just started dating to have the same financial arrangement as a couple married 50 years.

So the premise for our agreement was that any expense that could be used by either of you (even in varying degrees - e.g. food, heating, etc) was to come out of the joint account. Any discretional expense that was solely used by one person (gym memberships, spotify, etc) was to be paid out of their own account

So our first stage, which I coined 'equal payments' was used in the early stages of our relationship.

We took our total expenses (housing costs + council tax + food + energy + water + ...) and divided it by two. So if our total expenses were £2k, we'd transfer £1k each to the joint account on payday (and all these expenses would come from here). I guess an objectively fair system, but it can be a bit miserable where there is a big income disparity.

We then transitioned to the second stage (which we're in now), which I coined 'equal percentage'.

This is where we still total our expenses like the above, but we split them in proportion to our income. So if I have £3k take home per month and my partner has £2k take home, I would transfer 60% of the total expenses (or £1.2k) and my wife would transfer 40% of the total expenses (or £0.8k) to the joint account. This system ensures that the lower earner isn't constantly skint and the higher earner isn't always left with more money than they know what to do with.

We are planning to transition to the third stage (in January, when we are expecting our first child), which I coined 'equal remainder'.

This is where we total our income, minus it from our total expenses, and split what is left in half. This means we are both left with exactly the same amount of 'spare' money each, regardless of how much we earn (and seems much fairer when children are involved, with maternity and reduced hours, etc). So in the above examples, total income of £5k minus total expenses £2k = £3k left over, or £1.5k each. We would then send all of our income, minus £1.5k each to the joint account.

I'm not a fan of the approach commonly advocated on this forum (e.g. "we consider all money 'joint'") for the reason that I don't want her (or myself) to feel guilty or reluctant to make an exorbitant purchase. I think it's better for both if each person accrues a personal savings pot, so that they may waste it on fancy handbags or an expensive bike, or whatever it happens to be. I wouldn't want either of us to feel guilty about unilaterally buying it from 'joint savings' (and on that note you should have joint savings as well to pay for things like holidays, house repairs, etc, on top of each having a smaller pot of individual savings). A second reason for this is presents for each other. I feel like splurging a lot of money on a grand gesture for your partners birthday can be a bit awkward if it's paid for from the joint account.

Similar rules apply with day to day spending. If we're in Tesco picking up dinner for us both, or out for a meal, we'll put it on the joint account. If one of us fancies a cheeky Subway on their lunch break at work, they'll pay for it on their own account.

Of course, it's horses for courses, everyone is different.

NBLondon

We're going with joint account for joint spending (house, bills, food etc.) and we pay in slightly different proportions based on income.  Gym memberships and hobbies are definitely personal spending.

We have a car each (always have) and that is personal spending.  M'wife occasionally puts petrol in my car if she has been driving it a lot (mine has back seats and a hatch, hers doesn't) but that's it.

DullGreyGuy

nomoneymoreproblems said:

I'm looking to open a joint account with my husband. 

I earn the same every single month, theirs varies (sometimes earns the same as me but can earn up to £400 more. 

Do you think the joint account should cover their gym membership? or their car which is on HP (he uses daily but we if we go out together its always his car used as its bigger - I have my own car that is owned outright). what about each of our petrol bills? mine is £40 a month his is £270

I'm not sure 

just would like opinions please 

This is little to do with joint accounts and much more to do with how you are splitting your finances. 

How do you do things right now? Why should a new account change anything? If he's paying the car on his own right now why do you want to start contributing to it? 

Is the joint account going to be a "bills" account where you each put money into it or is it going to be your main account where both salaries go and all your spending goes from?

There is no right answer and the hundreds of similar threads on here have given a massive spectrum of answers of how different people do it. I know the first time I discussed matters with a friend who's in a similar position to me I was really shocked how they do things and his attitude but I wouldn't be surprised if the reverse wasnt true. 

I'd argue I'm old fashioned, I dont see us having an "hers" and "mine" but one single central pot that we both own and can use. So pay goes into my account, I leave in that account the money to cover all major bills (mortgage, insurance, utilities), some money goes into the tax savings account and the rest goes into a joint account for incidental spending and discretionary bills (Netflix, Amazon Prime, Gym etc). Planning and considering future dated bills isn't her strong point hence why the mortgage money is separated etc. 

My friend by comparison equally gets money paid into his account but then gives his wife an allowance that has to cover the family food, her and their son's personal expenses (clothes, entertainment, cosmetics etc). Given how much he earns the "allowance" seems very small to me but his view is that if she wants more she should get a job. 

Savvy_Sue

Wyndham said:

I have an old fashioned attitude to this, but when we got married (30 years and one week ago!) we combined our finances. 

You, of course, may not be ready for that. But it has made it easier for us - though you do need a) similar attitudes to spending and saving and b) a lot of trust!

If I had a new partner now, I don't think I'd rush into it in the same way. I think joint finances would be things that were shared e.g. mortgage/rent, bills etc. If one or other wanted gym membership, that feels to me like a more personal expense. Same with cars - if you are sharing one you should both pay towards it, but if you have one which is 'theirs' or 'yours' then it's down to the individual concerned to fund it.

Also worth saying that through the 30 years we've had periods where he has earned more than me, and periods where I have earned more than him. No children - which certainly makes a difference!

Also old-fashioned, but to me it's clear that the answer doesn't matter, what matters is that you've talked about it, agreed what you're doing, and the solution doesn't cause problems or unhappiness. 

We got married 40+ years ago, he was temporarily unemployed, his UB reduced to 50p per fortnight sent first class post by girocheque. Clearly any notion of 'his' and 'her' money was pointless. 'His' money bought us a bag of chips every fortnight. 

He got a new job, it was still all 'our' money. Then I had children, the money attitude became 'he earns it, I spend it'. Later in life we reversed that as he became semi-retired before me, but it's still all 'ours'. 

A sibling married the same year as us: they maintained the 'his' and 'hers' system, right down to cash spending. They had a shared purse for this, but they knew to the penny who needed to put money into it. They always had 'enough' money from good jobs, very good pensions. 

BUT we both had the attitude that there was only so much money, so neither of us could (or did) go wild. We had friends where one of them just could not handle cash, in any shape or form. Give them bus fare and lunch money, and they'd buy a book that caught their eye, walk to work and go hungry. Worse, set aside a few hundred pounds on a very tight budget for much needed dental work, and home would come a new microwave or vacuum cleaner - 'because we really needed a new one'. I would not have wanted to share an account of any kind with them. 

Savvy_Sue

Exodi said:

I'm not a fan of the approach commonly advocated on this forum (e.g. "we consider all money 'joint'") for the reason that I don't want her (or myself) to feel guilty or reluctant to make an exorbitant purchase. I think it's better for both if each person accrues a personal savings pot, so that they may waste it on fancy handbags or an expensive bike, or whatever it happens to be. I wouldn't want either of us to feel guilty about unilaterally buying it from 'joint savings' (and on that note you should have joint savings as well to pay for things like holidays, house repairs, etc, on top of each having a smaller pot of individual savings). A second reason for this is presents for each other. I feel like splurging a lot of money on a grand gesture for your partners birthday can be a bit awkward if it's paid for from the joint account.

Similar rules apply with day to day spending. If we're in Tesco picking up dinner for us both, or out for a meal, we'll put it on the joint account. If one of us fancies a cheeky Subway on their lunch break at work, they'll pay for it on their own account.

Of course, it's horses for courses, everyone is different.

I think that's the kind of thing that needs to be right out in the open, and there is no right answer. 

bunnygo

one thought; a joint account survives if one person dies. The LAST thing you want to be thinking about when bereaved is how to pay the gas bill. Suggestion: set the household bills to pay from the joint account, both of you put regular money in, discuss the fripperies separately. Each person should also have their own credit card and their own account, the latter with a different banking licence from the joint account.

joint credit cards are no good as if the lead name dies, the card closes for the second person.

LightFlare

We’ve had just a single joint account for 30+ years and no issues or disagreements.

It all goes in one pot and all comes out of one pot.

At some stages my wage has been higher, more recently hers has been.

Neither of us has particularly expensive hobbies that don’t involve the other and our views on finances and spending habits are pretty much aligned.

There is no right or wrong, just whatever works. But it does require an honest and frank discussion and agreement from both parties

Exodi

Savvy_Sue said:

Exodi said:

I'm not a fan of the approach commonly advocated on this forum (e.g. "we consider all money 'joint'") for the reason that I don't want her (or myself) to feel guilty or reluctant to make an exorbitant purchase. I think it's better for both if each person accrues a personal savings pot, so that they may waste it on fancy handbags or an expensive bike, or whatever it happens to be. I wouldn't want either of us to feel guilty about unilaterally buying it from 'joint savings' (and on that note you should have joint savings as well to pay for things like holidays, house repairs, etc, on top of each having a smaller pot of individual savings). A second reason for this is presents for each other. I feel like splurging a lot of money on a grand gesture for your partners birthday can be a bit awkward if it's paid for from the joint account.

Similar rules apply with day to day spending. If we're in Tesco picking up dinner for us both, or out for a meal, we'll put it on the joint account. If one of us fancies a cheeky Subway on their lunch break at work, they'll pay for it on their own account.

Of course, it's horses for courses, everyone is different.

I think that's the kind of thing that needs to be right out in the open, and there is no right answer. 

I made at least a couple disclaimers in my post that it was subjective to each relationship, so by no means have I suggested that what I said is the right answer, clarifying that was unnecessary.

I'm not really clear what you mean by 'that's the kind of thing that needs to be right out in the open'? I also suggest finances are joint to some degree, just not every penny. I don't think it's realistic for any human couple to agree from the outset what their future financial arrangement will be, relationships evolve along the way.

One other thing I want to mention is that are you can imagine this forum skews older (with over 2/3rds being at least 50).

So when the question in this thread comes up (and it comes up often), the respondents are typically older people who have been in very long term relationships with kids, expressing the view that all their money is completely joint.

Which is great, good for you, no problem with that, but it's not terribly helpful for the OP's who are nearly always in the early stages of their relationship. Yet these threads always head the same way (just like this one) where the OP might draw the conclusion that the best thing to do is to offer control of their finances to a relative stranger, because that's what most people on MSE do.

Of course you also have an element of survival bias among all the 'what's mine is hers and what's hers is mine' posters, as people don't post 'I joined our finances, I got fleeced, worse decision I ever made', only the people that have had successful long term relationships. In reality, most relationships do not work out long term.

I can be agreeable with the happy medium where everyone expresses their view and the OP makes their own decision (but being aware that this forum trends older), but I do find it odd that on one of the few posts that disagree with the typical 'my money is their money' mantra, you raise concerns with it.

Savvy_Sue

I didn't realise I was raising concerns with it, I was just stating the by now obvious! The OP needs to TALK about hopes, expectations, what's going in the joint pot and what's not. 

bunnygo said:

one thought; a joint account survives if one person dies. The LAST thing you want to be thinking about when bereaved is how to pay the gas bill. Suggestion: set the household bills to pay from the joint account, both of you put regular money in, discuss the fripperies separately. Each person should also have their own credit card and their own account, the latter with a different banking licence from the joint account.

joint credit cards are no good as if the lead name dies, the card closes for the second person.

Yes, but ... if one person loses capacity and has not set up a Lasting Power of Attorney, then that joint account may be frozen, to protect that person's interests! 

Make your LPAs, people ... 

bunnygo

interesting note - thank you!!