Planning

In practice: how two couples manage their money

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A newlywed and a wife of eight years discuss what works for them

The Lehman way

Laura Lehman, 29, is deputy editor of a local newspaper and John Lehman, also 29, is a self-employed architectural designer. The pair got married in August 2010 and moved into their first home in Banbury, Oxfordshire, in September 2011.

“After we got married, we knew we wanted to buy our own house at some point, but nothing was set in stone,” says Laura. They found the perfect house sooner than anticipated. “We didn’t get much chance to sit down properly and discuss finances – we just went along with it.”

Since moving into their house, the couple have combined a portion of their incomes into a joint account in order to pay the mortgage, but still keep separate current accounts. “At the moment, it’s really quite a loose arrangement,” Laura says. “I tend to pay more of the bills because I earn more, and I’m happy with that. We divide things up almost half and half but I pay slightly more. John pays the water bill and I perhaps pay the gas and electric bill because it’s slightly more expensive. With food shopping and things, it tends to be whoever happens to be doing the shopping that week pays for it, and it seems to work itself out naturally. There haven’t been any problems at all.”

Both Laura and John are responsible for financial decisions, although Laura admits that she tends to be more organised. “I always know exactly how much I’ve got coming in and out. I think if our finances were to become more combined, I would probably be the one to take on the ‘accountant’s role’. In terms of the mortgage, we both know what’s going on with that and take an equal role.”

And the future? “If we decide to have children at any point in the future then our finances will become a lot more joined together because I probably wouldn’t be working full time, so then we would be relying on each other’s income. But we are happy with the way it is at the moment.”

We've always used the joint account in the same way – each paying in equal amounts. We have the account for household stuff, then we each have individual current accounts, plus our own savings accounts and ISAs

 

The Andrews way

Helen, 32, is an accountant at a law firm and James, 33, is an assistant headteacher at a secondary school in Sheffield. They got married eight years ago and moved in together three years before that. They live in Norton, south Yorkshire, with their five-month old baby Ethan.

“I definitely play more of the accountant’s role at home,” says Helen. “This is not surprising really, seeing as that’s my job. I deal with all the finances. So I choose who we bank with, who we have our insurance with and I sort the mortgage out. I just tell James what he needs to put into our joint account and he trusts me!”

Helen and James opened a joint account when they first moved in together to make it easier to pay their rent and council tax. “We’ve always used the joint account in the same way – each paying in equal amounts,” she says. “We have the account for household stuff, then we each have individual current accounts, plus our own savings accounts and ISAs.

“We get our salaries paid into our single current accounts and then we each pay an agreed, equal amount into the joint account every month to cover things like the mortgage, electricity and gas bills, and the phone bill. Then we decide what we want to do with whatever’s left in our individual accounts. That might be putting money into a savings account or spending it on ourselves – it’s each person’s own decision.”

Everything in the Andrews family household is fair and equal. “We don’t have to justify our own personal spending habits to each other as it comes out of our single accounts. This is why it works best,” says Helen. “We have friends who put all their money into a joint account and no longer have single accounts. And then, when the husband starts buying toys or games on eBay, or the wife is spending loads of money on clothes, the arguments happen.”

Helen and James each have standing orders set up from their individual accounts, so there have never been issues with one person not paying into the joint account. “If we’re ever running short in the joint account, for example if we’re paying out a lot of money that month for a holiday, we’ll both top it up with some extra cash, but this is always still an equal amount.”

The arrangement works well for the couple and the only area that has come up for discussion is what to do while Helen is on maternity leave. “I’m now being paid less than half of what I’d normally put into the joint account, so our normal set-up doesn’t work at the moment,” she explains. “We’ve had to adjust things so, after working out the total income that we receive into the household each month, we make sure the right amount is in the joint account to cover all the bills and then split the remainder so that we’ve both got money that we can then choose to save or spend.”

Luckily, the couple have similar attitudes towards saving and have put in place provisions to build a financially secure future together. This includes level-term life assurance after a chat with their mortgage adviser, critical illness cover and pension schemes. “We’re both keen to build up a safety net of savings,” says Helen. “We both top up our ISAs to the maximum each year and, up until I went on maternity leave, we’ve been overpaying our mortgage each month.”

When Helen’s maternity leave comes to an end, the couple’s employers have agreed that they can each reduce their working weeks to four days, in order to help with childcare. “If we had another baby or anything changed in terms of hours and pay – say if James continued working full time and I went down to three days a week – then maybe we would have to reassess how we managed our finances, as it would be unfair for me to keep paying half the household outgoings,” says Helen.

She adds: “We’d rather not completely merge our finances, though. I prefer to have a bit of independence, plus how do you keep birthday presents a secret from each other when you’re paying for them out of your joint account?”

Helen says she may use her bank’s will writing service as this is something the couple haven’t yet drawn up, although they know they should, and adds that they may seek financial advice if their family situation changes.

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