Our Approach to Joint Finances: Unsure if perfect, but seems to work
Managing joint finances as a couple can be tricky. Awkward conversations about who earns more, who contributes what, who consumes what, etc.
We’ve found a system that works well for us, however it took some time to get here, and many conversations. Once the baby was born we became more of ‘one unit’ as opposed to two individuals. We’ll talk more about what we used to do, the challenges and how we transitioned in another blog. Our approach aims to provide transparency and fairness whilst still allowing for some level of personal spending freedom.
Here’s how we do it:
Our Income Structure
Each month, our combined net salaries c.£7,600 are paid into a single joint account.
This account is the central hub of our financial management.
From here, we make sure that the essentials are covered, and we each receive an equal amount of spending money.
Distributing the Income
Once our salaries hit the account, we both receive an equal ‘salary’ of £500 into our personal accounts. This is our individual spending money—no questions asked, no need for justification. It gives each of us a sense of independence and the freedom to manage our personal expenses however we choose.
Covering the Essentials
After our personal ‘salaries’ are distributed, the next priority is the mortgage. Each month, £1,565 (soon to be £2,130) is automatically deducted to cover this. We both agree that keeping a roof over our heads is the top priority, so this payment is non-negotiable.
Once the mortgage is sorted, the remainder of the funds is used to cover household bills. We’re talking utilities, insurance, and any other regular expenses that keep our home running smoothly. By prioritising these, we ensure that the basics are always taken care of before we think about anything else.
The Operational Account
Finally, after covering all the necessary expenses, we transfer the remaining balance into a separate joint account—our ‘operational’ account. This is our day-to-day spending fund, used for groceries, outings and any other shared costs. It keeps our finances organised and makes budgeting for the month much easier.
Why This Works for Us
This approach keeps things fair and simple. By dividing our money into personal spending, essential payments, and shared expenses, we ensure that we’re both contributing equally and that our household runs smoothly. Plus, it gives us the flexibility to enjoy our individual freedoms without compromising our financial goals.