Splitting bills during mat leave - how did you do it

[Le North Dreamer]

Hi,

My SO will give birth to our child in the upcoming year and we are starting to talk about the financial aspect of this wonderful enterprise. We are not married and do not plan to get married in the near future (typically French Canadian).

Current situation
As we have quite similar salaries and bonuses right now, we split common expenses 50/50 through a joint account that is automatically replenished each month, and both have our own personal accounts to use for our respective personal expenses. We own 2 properties 50/50 and split mortgage payments equally (capital and interest). Basically separate finances with common

Mat leave
During her 52 weeks mat leave, SO will get a parental leave allowance (gov) which is a set number (around 50k gross).
During the first 17-18 weeks of this 52 weeks mat leave, her employer tops up the governmental mat leave allowance to 95-100% of her current salary.

The plan
During the first 17-18 weeks, we would keep things as they are now, splitting common expenses 50/50, including mortgage payments.
During the remaining 35-ish weeks, as I will then make quite more than my SO, we would split common expenses as per a ratio of our respective incomes (somewhere in the 25/75 area).

The question
What to do with mortgage payments? Before throwing any rocks, bear with me. I love my SO deeply, am planning to stay with her forever and raise our children with love.
I'm just curious how ppl usually split mortgage payments. Would you just apply the 25/75 ratio to both the capital and interest portions of the mortgage payments? Would you apply the 25/75 ratio to the interest portion while keeping the capital portion at 50/50? Would you keep the mortgage payments entirely at 50/50?

I'm thinking that splitting the interest portion to 25/75 is completely fair as it is an expense. I'm uncertain about the capital portion: as both will get back this capital 50/50 in the end when selling the property, shouldn't the capital portion of mortgage payments be split 50/50 no matter what?

Again, it is most likely a moot topic for me as I'm planning to stay with SO for the rest of my life and I might also be overthinking this. Anyhow, I'm going to be happy with any scenario as I love her deeply and want her to have a strong financial future, but wanted to gather opinions.

Cheers!

[nessness]

You are overthinking this. Just split the whole mortgage payment 25/75.

[BikeFanatic]

I agree split the mortgage as you split all expenses. 35 weeks of principal at 25/75 vs 50/50 is what?
You are overthinking it. I feel in the USA it would amount to 25 percent of 1600 or 400 dollars total, so small amount to quibble about.
My spouse and I have separate finances for 19 years and we try to keep it even but don’t quibble over anything less than 5 to 10 thousand.

[jeninco]

I thought about your question for a while, and my answer is this: she's taking a financial penalty to drop out of the labor force and bear a child that both of you want, so whatever you do should keep things as fair as possible. If you want to think of it this way, she's "taking one for the team" so whatever split the two of you currently wind up with OF PERSONAL MONEY, should be what you do over maternity leave.

So, if you each typically wind up with 25% of your combined income as personal money, that should be the case after the reduction. (Total combined income - bills you pay together)/2 = remaining personal money. You'll both take a hit, but you'll maintain the current balance of what each of you gets "paid".

[appleseed]

Congratulations on your growing family! My oldest is 9, but I remember fondly that feeling of excited and apprehension about becoming a family of 3 before he was born.

I thought about this one for awhile and wasn't going to respond, but I think you need to really factor in the amount of unpaid labor your SO will taking on as the full time parent for that year. I don't know how you translate that to actual percentages for paying of your joint bills, but it is something to keep in mind.

You should also be having some big conversations about finances. What happens if she (or your child) has a major medical condition and cannot return to work?

Much of my thinking comes from a devastatingly American point of view (12 months of maternity leave! I know only one woman who got more than 6 months but mostly unpaid), but a year away from work (or more, depending on number of kids) takes a financial toll (it addition to a huge physical toll) directly on mothers in terms of lifetime income, career advancement, etc.

Best of luck.

Sent from my moto x4 using Tapatalk

[Metalcat]

With a kid, money stuff is about to get much, much messier than a 75/25 split.

There is no right answer, there's only the answers that will work for the two of you over your constantly evolving financial realities moving forward.

We are not the people to ask. The only person other than you who has any clue what will work for the two of you is the other half of your partnership.

So get to talking about it, the nittier and grittier the detail the better, and it's not just one talk to "establish the rules", it's an ongoing conversation that gets easier and more intuitive over time.

The worst mistake you can make is to try and bring the answers to them instead of generating the answers with them.

[Kmp2]

I'm with Malcat, have you asked your SO what she thinks yet? Is this question just about ironing out mortgage details or getting some ideas to go into a first pass discussion with her?
Because please don't go into a first discussion with her, with all the details all ready.

I'm not sure what expenses you split 50/50 right now (ie what's a personal expense and what's a joint expense) - because what your personal expenses look like, and how many you each get to and can afford to continue with over that year of mat leave will probably affect how this split works a lot.

But here are some things to consider.

1) Will this arrangement still allow her to have spending money to do things? If this arrangement allows you to carry on as usual and get to do all your extra curriculars, but puts hers out of reach, or paid through personal savings than it's not going to work. Will it allow her to pay for childcare while she does things (ie. I had extra babysitting fees to do my weekly swimming on mat leave).

2) How will personal savings be impacted for the year? Do you still get to contribute 100% of RRSP and all personal savings goals, but she won't be able to as her salary is significantly reduced? Ideally your personal savings will take a reasonably equal hit.

3) Baby expenses? They are joint right that is split 25/75?  If she buys stuff for the baby, what category will it fall into if she think's it's a needed item, and you think it's not? Also what if it's a momma item? Nursing tops for instance?

Be prepared to change course, keep discussions open. If she is struggling getting out, struggling with post partum depression, struggling with sleep or feeding or feeling cash strapped any plan you make will have to be adaptable.

[TrMama]

With a kid, money stuff is about to get much, much messier than a 75/25 split.

There is no right answer, there's only the answers that will work for the two of you over your constantly evolving financial realities moving forward.

We are not the people to ask. The only person other than you who has any clue what will work for the two of you is the other half of your partnership.

So get to talking about it, the nittier and grittier the detail the better, and it's not just one talk to "establish the rules", it's an ongoing conversation that gets easier and more intuitive over time.

The worst mistake you can make is to try and bring the answers to them instead of generating the answers with them.

Malcat is spot on here. Splitting mortgage payments is the easy part. Now that you're parents, you're about to add a ton of variable expenses into your financial life. I'd work out some sort of system with your spouse that makes administering these expenses very simple. You're not going to want to deal with the hassle of figuring out who owes what for each pack of diapers, for example.

When I was on mat leave (actually I'd quit for a couple years, but the leave paid out for the first year), DH gave me a monthly allowance. It sounds super juvenile and controlling, but all it meant was he transferred some money into my account each month so I could cover things like groceries, kid stuff, my own wants, etc. If I ever needed more, or less, than the allowance amount we just talked about it and came up with a solution. Open communication, transparency and flexibility are super important during these early years.

Our separate expenses system has always been set up as "his" and "hers" expenses because it makes administering them simpler. Over the years some of the bills have bounced between us depending on income or who cared more about the expense. However, overall our finances are planned jointly. Retirement planning in particular is a very joint exercise despite the fact we legally have to have individual RSP and TFSA accounts. This is just one way of doing it, you and your spouse will need to come up with your own version. Just be aware of not dumping all the new variable kid-related expenses and labour on one partner.

[Captain FIRE]

+1 on discussing how you'll split kid expenses - and mama related expenses (pregnancy clothes, belly support, shoes that fit when feet grow due to pregnancy, nursing tops, pumps, etc.) now

Agree with another poster that she's taking a financial hit by being out of the workplace in terms of career progression, retirement savings, etc.  For another thought...pregnancy does a number to a woman's health.  I was nauseous every day until the last few weeks of pregnancy.   Ligament pain, back pain, etc.  Not to mention labor, c-sections, middle of the night feedings, etc. aren't a walk in the park either.  Maybe you should actually be contributing extra to reflect that she's going the extra mile physically right now, rather than brainstorming and nitpicking ways to contribute less?

[Le North Dreamer]

Hi everyone,

Thank you all for the replies, it is much much appreciated and insightful.

You are overthinking this. Just split the whole mortgage payment 25/75.

Yes, I fully agree with you, I'm clearly doing so and now plan on not thinking about this for a second going forward - mortgages are common expenses and should be split using the same ratios as other common/joint expenses.

--
Using Kmp2's post to add more clarity to the situation and cover certain topics that came up in some replies:

I'm with Malcat, have you asked your SO what she thinks yet? Is this question just about ironing out mortgage details or getting some ideas to go into a first pass discussion with her?
Because please don't go into a first discussion with her, with all the details all ready.

We are starting to discuss the details of how our finances will look like during her mat leave and have pretty open conversations about it. I really don't want her to stress about any of this, I'm already the one taking care of our couple's finances but I want her to fully understand how we're going to approach this so she 100% agrees with the approach and feels comfortable about it. the goal is to be 100% fair taking into account all circumstances (physical/mental toll of the pregnancy, salary reduction, etc.).

I'm not sure what expenses you split 50/50 right now (ie what's a personal expense and what's a joint expense) - because of what your personal expenses look like, and how many you each get to and can afford to continue with over that year of mat leave will probably affect how this split works a lot.

I should have provided examples and more details on this. Here it is. My salary is deposited in my personal account, her salary is deposited in her personal account. Our joint expenses (groceries, mortgages, insurance, electricity bills, cars, gas, home improvement, etc.) are either taken care of from a joint account in which we deposit the same amounts each month (currently 50/50), or through a joint credit card that I'm paying off each month. At the end of each month, I take a look at the credit card statement and split expenses into 3 categories: joint, mine or hers, and then calculate how much she owes me for the joint expenses (currently 50%) and her personal expenses (100%).

I know all couples have different systems but this one has been just fine for us in the last couple of years. I'm the one making the calculations each month (I'm the analytic type), and she can access the calculations in our google sheet and see the full history of how much she owes me and why.

A lot of her "personal" money currently goes towards horses, while mine go into my investment accounts.

1) Will this arrangement still allow her to have spending money to do things? If this arrangement allows you to carry on as usual and get to do all your extracurriculars, but puts hers out of reach, or paid through personal savings than it's not going to work. Will it allow her to pay for childcare while she does things (ie. I had extra babysitting fees to do my weekly swimming on mat leave).

That is a very good point, I'll try to come up with a "pilot" month to see how much spending/personal money we would both get during the slow portion of her mat leave (the part when she only gets gov parental leave money). I want to come up with an arrangement where she is not prevented from keeping on with her extracurricular activities while keeping investments up.

Any childcare expenses, no matter the reason, would be common/joint expenses that we would split according to the then-applicable ratio (so 25/75). I'm already planning for extra babysitting to make sure she has the time to decompress and have some "her" time.

2) How will personal savings be impacted for the year? Do you still get to contribute 100% of RRSP and all personal savings goals, but she won't be able to as her salary is significantly reduced? Ideally, your personal savings will take a reasonably equal hit.

The goal would be to make sure that she still hits her personal savings goals. Most of her savings are coming through her employer pension plan and we will make sure that we continue payments on this front so she gets her full year worth of pension down the road. I'll have to come up with actual numbers and see how her salary reduction will impact her capacity to make payments.

This brings up a problematic situation - as of today, our investments and savings are in fact separated. We are both maxing out RRSPs but this money comes from our personal expenses and is not considered a joint expense. And because her personal expenses are generally quite higher than mine, it does happen that I have to lend her money so she can maximize her RRSPs each year, on top of funding her employer pension.

3) Baby expenses? They are joint right that is split 25/75?  If she buys stuff for the baby, what category will it fall into if she thinks it's a needed item, and you think it's not? Also what if it's a momma item? Nursing tops for instance?

Yep, anything baby-related will be considered a joint expense, and the needed vs not needed would in my mind need to be explicitly discussed before purchase. While clothing is usually separated, momma items in my mind should be joint expenses as this serves a purpose for the family. Bring em nursing tops!

We are both fairly frugal and have agreed to be very careful in our baby spending so I'm hopeful that we will somewhat be able to stay on tracks...

Be prepared to change course, keep discussions open. If she is struggling getting out, struggling with post partum depression, struggling with sleep or feeding or feeling cash strapped any plan you make will have to be adaptable.

That's the attitude I'm going to strive for. I've been trying to be as supportive as possible and remain a positive force by her side so far while she was struggling emotionally during her first trimester. She won't feel cash strapped, I'm going to make sure it doesn't happen by being adaptable and dependable!

--

Malcat is spot on here. Splitting mortgage payments is the easy part. Now that you're parents, you're about to add a ton of variable expenses into your financial life. I'd work out some sort of system with your spouse that makes administering these expenses very simple. You're not going to want to deal with the hassle of figuring out who owes what for each pack of diapers, for example.

When I was on mat leave (actually I'd quit for a couple years, but the leave paid out for the first year), DH gave me a monthly allowance. It sounds super juvenile and controlling, but all it meant was he transferred some money into my account each month so I could cover things like groceries, kid stuff, my own wants, etc. If I ever needed more, or less, than the allowance amount we just talked about it and came up with a solution. Open communication, transparency and flexibility are super important during these early years.

Our separate expenses system has always been set up as "his" and "hers" expenses because it makes administering them simpler. Over the years some of the bills have bounced between us depending on income or who cared more about the expense. However, overall our finances are planned jointly. Retirement planning in particular is a very joint exercise despite the fact we legally have to have individual RSP and TFSA accounts. This is just one way of doing it, you and your spouse will need to come up with your own version. Just be aware of not dumping all the new variable kid-related expenses and labour on one partner.

Thanks for the insight TrMama. Putting everything baby-related into our joint expenses should make it super simple for us. As mentioned above, all our joint expenses will be paid using a joint credit card or joint account and these will be split 25/75 to take into account actual income.

re: allowance, I'll do need to calculate how much money will come in on her side during the 35 weeks under gov allowance and figure out if this will be sufficient for her typical personal/retirement expenses. Agree with keeping it completely "open communication" and super flexible - my goal is that she feels as great as possible throughout this process.

re: retirement planning, as mentioned above, for us this is currently separated and I'll need to look into impacts on her side in the upcoming mat leave to ensure she is not penalized by our financial arrangement.

--

+1 on discussing how you'll split kid expenses - and mama related expenses (pregnancy clothes, belly support, shoes that fit when feet grow due to pregnancy, nursing tops, pumps, etc.) now

Agree with another poster that she's taking a financial hit by being out of the workplace in terms of career progression, retirement savings, etc.  For another thought...pregnancy does a number to a woman's health.  I was nauseous every day until the last few weeks of pregnancy.   Ligament pain, back pain, etc.  Not to mention labor, c-sections, middle of the night feedings, etc. aren't a walk in the park either.  Maybe you should actually be contributing extra to reflect that she's going the extra mile physically right now, rather than brainstorming and nitpicking ways to contribute less?

That is quite an important note and I completely agree that I should think about how I can support her as much as possible instead of nitpicking ways to contribute less. I feel a bit ashamed that I even though about all this now, it must be my analytical side...

--

On a different note we just went through our second ultrasound and our little girl is in perfect health and growing quite well! Very very happy about that and mom looks like she's feeling great, so all in all, everything is going great!

[Laura33]

First, I get that your analytical nature means that you are going to consider a lot of things, and that that can come across as "cold" even when you don't mean it to.  So I am going to throw out a completely different idea for you to consider:

You are focusing on paid work.  But the reality is that your partner is cutting back on paid work to take on a massive unpaid role.  Not to discount the unpaid work you're going to be doing as well!  But the reason she's taking mat leave is not to take a vacation -- it's to substitute a whole bunch of unpaid labor for some part of her paid labor.  And that unpaid labor is for a "project" that you both want and value, right? 

The problem is that even doing a 75/25 split doesn't add any value for that unpaid labor she's about to jump into.  Sure, it gives her a little relief from some of the bills due to the effective paycut she's taking for her new job, but she's still going to be left with a lot less "fun money" at the end of the month.  You will also have less fun money, of course, because you're going to have less income and more bills -- it's not a one-way street!  But I will bet that when you run the math, you're still going to have more left over than she does.

So why don't you look at it from the standpoint of equal fun money -- not of who pays what share of what bills, but of making sure that the end result leaves you both in the same balance that you have now?  After all, this new "job" is one that you both want her to take on, right?  Yet she is the one taking the personal financial hit, even though the new job benefits both of you in many non-monetary ways.  So it doesn't make sense to me that her shouldering the primary burden of a new unpaid job for the benefit of both of you should result in her now experiencing a lower standard of living than you do.  Why not do your post-baby budget, figure out how much money should be left over each month after paying for all the joint things, and divide that equally between the two of you? 

Again, just a thought for consideration.  Based on your posts so far, I am confident that you two will figure something out that works for you, regardless of whether any of us outsiders think it's "fair" or "optimal," and that's all that matters.*

*My mom, for ex., insisted on paying half the bills at all times, even though she made significantly less than my stepdad for many years.  DH and I, OTOH, anticipated some combination of yours/mine/ours, but we're far too lazy, and it quickly morphed into "it's all joint, except each of us gets $200/mo. to do whatever the hell we want with so I can't yell at him for buying $120 name-brand sunglasses."   

[Sibley]

Adding to what Laura said... there are actually studies of how much it would cost to replicate a stay at home mom if you had to pay someone. It's a lot. Regardless how you two end up managing things, it is possible to assign realistic numbers to her unpaid contributions.

Here's one I found:
https://globalnews.ca/news/4862622/stay-at-home-moms-money-study/

[mountainmama]

My partner and I had split finances prior to having kids. (We were and are still unmarried.) It only took a few months of having an infant for us to decide to just put our $ in one big pot. We still each have a separate checking for the equal amount of spending $ we each take per week. We can do what we want with it (save, invest, or spend). For us, it just seemed unnecessarily complicated to figure it out separately.

[lutorm]

Laura33, as usual, nailed it.

My wife and I have been doing something similar to the OP, except we've been contributing a fixed percentage of our salaries ("from each according to his ability") to the "common account" and out of that common account goes housing, food, health care, kids, taxes, etc, basically everything that could be construed to be common. We picked this method way back before we were married because it seemed reasonable that "fun money" should be individual and if someone made a bit more money they should get an advantage from that.

This worked well when we made about the same. Now I make quite a bit more than the poor college professor so there's more of an imbalance in the amount of fun money we get (although both of us save the vast majority of that fun money so in practice it doesn't matter that much.)

Enter the kid. This system breaks down completely when someone doesn't make any money at all or when one of you sacrifices money making (real and potential) to provide unpaid labor for the joint venture. At that point, it simply doesn't make sense to any longer think of individual incomes. I think it's getting to the point where we simply are going to say that any income generated goes to fund the joint venture, which in turn will dole out identical "allowances" to both of us as an expense.

The situation is sort of similar when it comes to FIRE. I'm much more motivated to FIRE or at least take a significant break pretty soon, so what will happen when I no longer have any income? Same thing there, I'll have to live off the allowance from the joint venture....

[waltworks]

I think split finances like this work great before kids.

After kids, ugh. Unless you have some serious objection to merging finances, I'd just do that.

Otherwise, Laura's idea is IMO the most fair. Just make sure you both end up with the same amount years from now (18 years!) when all is said and done.

-W

[LightTripper]

My partner and I have separate finances and 2 kids (now aged 6 and 3).  I took 7 months mat leave with my first and 8 with my second.

We have a joint house account like you (though we use a card each on that account to pay for joint expenses, unless one of us messes up, so generally not too much shuffling money between accounts or itemising expenses).  Anything he or I think is a household expense we put on the joint account.  So far we haven't had disagreements but of course it's open to discussion!

For maternity leave, I calculated what I would have expected to earn if I'd been at work (after tax), less what I got as maternity pay.  We then "shared the pain" of that 50/50 (I can't remember whether OH paid me the half amount, or whether he put the full amount in the joint account - either would work!)

In my case I didn't include the additional bonus I might have earned, as my job was very full on (lots of late night and weekend working - which I LOVED getting away from on mat leave and having a proper mental "break") and the salary was already very good. so that seemed fair to me.  But it would depend on the job what was fair in a particular person's circumstances.

Basically we both kept the same 50/50 arrangements for expenses as before, but shared the hit to my income 50/50 too. 

Also, importantly, we still shared chores etc. after work.  I.e. the household stuff didn't all become my responsibility just because I was home.  I probably did take on more of some jobs just because I was around more - but equally there were days when things were hard and I did nothing and OH carried the load.  We both just trusted each other to do as much as we could and OH never expected everything to be done for him because I was home.  I think that is really important, as PP have said.  You are still two adults running a household together, at the end of the day.

Anyway, that's just another way of doing it that I think is fairly clean that you could think about.  We're lucky that we both had significant savings already and well paid jobs so we could afford to be fairly relaxed about it.  Probably we were significantly older than you were (late 30s/early 40s by the time we had kids) - so I had already done my career progression and "topped out", so there was no real loss to me in terms of career progression (not that I cared about by that close to FI anyway!). YMMV.

[Captain FIRE]

I think split finances like this work great before kids.

After kids, ugh. Unless you have some serious objection to merging finances, I'd just do that.

This is worth a serious discussion between you guys.  For example my spouse earns more than me...but at a cost of additional work hours.  During those extra work hours, I'm "on" for childcare, making dinner, picking up the house, etc.  He wouldn't be able to keep performing his job without my support.  It's way more stressful doing it all myself than working late (I have some busy times I need to work late too so I do see both sides).  I also have taken more sick days for the kids, more daycare pickups, etc.  So a bright line of keeping our own salaries wouldn't adequately compensate for extra unpaid work that facilitates the other person's career.  Perhaps it does for you, but even so keep an eye on that it continues to be so.

Back pre-kids, it might have been less burden on me for him working more hours, because I could take leisure time then if I wanted, although in reality I picked up a lot of the household chores then.  (Note that pre-kids we've traded off who out-earns the other.)

[jeninco]

First, I get that your analytical nature means that you are going to consider a lot of things, and that that can come across as "cold" even when you don't mean it to.  So I am going to throw out a completely different idea for you to consider:

You are focusing on paid work.  But the reality is that your partner is cutting back on paid work to take on a massive unpaid role.  Not to discount the unpaid work you're going to be doing as well!  But the reason she's taking mat leave is not to take a vacation -- it's to substitute a whole bunch of unpaid labor for some part of her paid labor.  And that unpaid labor is for a "project" that you both want and value, right? 

The problem is that even doing a 75/25 split doesn't add any value for that unpaid labor she's about to jump into.  Sure, it gives her a little relief from some of the bills due to the effective paycut she's taking for her new job, but she's still going to be left with a lot less "fun money" at the end of the month.  You will also have less fun money, of course, because you're going to have less income and more bills -- it's not a one-way street!  But I will bet that when you run the math, you're still going to have more left over than she does.

So why don't you look at it from the standpoint of equal fun money -- not of who pays what share of what bills, but of making sure that the end result leaves you both in the same balance that you have now?  After all, this new "job" is one that you both want her to take on, right?  Yet she is the one taking the personal financial hit, even though the new job benefits both of you in many non-monetary ways.  So it doesn't make sense to me that her shouldering the primary burden of a new unpaid job for the benefit of both of you should result in her now experiencing a lower standard of living than you do.  Why not do your post-baby budget, figure out how much money should be left over each month after paying for all the joint things, and divide that equally between the two of you? 

Again, just a thought for consideration.  Based on your posts so far, I am confident that you two will figure something out that works for you, regardless of whether any of us outsiders think it's "fair" or "optimal," and that's all that matters.*

*My mom, for ex., insisted on paying half the bills at all times, even though she made significantly less than my stepdad for many years.  DH and I, OTOH, anticipated some combination of yours/mine/ours, but we're far too lazy, and it quickly morphed into "it's all joint, except each of us gets $200/mo. to do whatever the hell we want with so I can't yell at him for buying $120 name-brand sunglasses."   

I tried to say this earlier, but -- as usual -- @Laura33 said it so much better then I could.

We've each been putting 75% of our after-tax earnings into a common account. (I'm a contractor, so I have no outside withholding, so first I put 30% of my paychecks into a money market account that I use for paying estimated quarterly taxes, final taxes, and contributing to my SEP). But MrINCO makes 2-4 times as much as I do, as I do consulting work while also staying home and being the "on-call" parent with our kids, and running the household stuff: we're a team, and he's able to work longer days/weeks because I take care of much of the other stuff.

It doesn't generally bother me -- my costs are pretty low, and I use my share of fun money to have the occasional coffee with friends, or pay for exercise-related stuff, or whatever. I definitely have enough and I don't think about it. We both move money into our long-term investments every year.

However, he just bought a new (to us, but it's a 2019) car out of his personal account.

So, yeah, that percentage thing? That may not be the way to go: I'm thinking it probably makes more sense to give us both a monthly allowance. I think we're going to re-assess how we allocate personal spending money. I doubt it'll change how we spend, but something's a bit off, if I amass maybe a few thousand $ in my personal account each year, and he amasses around 10 times as much.

[Le North Dreamer]

Well, a huge thank you to everyone for the top quality responses, it has given us a lot of food for thoughts. Ms. North Dreamer says Hi by the way, as she read through the whole thread with appetite the other day.

We will be evaluating the various propositions mentioned in here and come up with a much more refined strategy that fits our current and future situation.

Cheers!

[JustTrying]

Our system seems simple to me, but might feel complicated to others? My husband and I have what I call the lazy-person's-budget. Essentially, all purchases are "free," except for things we buy for ourselves personally (sports equipment, clothes, nights out with friends, etc), which comes out of our individual budgets. (So we don't budget what we spend on household items, groceries, kid stuff, etc). We have certain bills he pays and certain bills I pay. Each month we switch who pays the mortgage and who puts money into our various savings accounts. Prior to going on maternity leave, one of the accounts we paid into on a monthly basis was a maternity-savings account. During my maternity leave, I took money from this account to pay the bills that I usually pay.

It worked fine for us!

[Plugging Along]

A prior to kids, we had seperate and joint accounts.  With kids, we changed things around.  We on average make about the same.   His income being self employed was really feast of famine, and i was stable income until may.

We look try to keep it simple.   Everything goes into a joint  account. We have goals we both agree to.  All expenses come out of the joint account, as a couple we max RRSP, tsfa, and resp together, plus we have general savings target.    We each have our own credit cards for our own spending and put some boundaries around personal spending.   It’s only big and long term purchases that we really discuss.   Sometimes I spend more sometimes he does.   

I enjoy cooking so will buy a lot of fun things to try.  Though it’s my hobby, the whole family benefits.   Most of my discretionary spending involves our kids, we don’t split because they get the benefit even if my spouse doesn’t want to come.   Over the years, the spending has just evened out. 

[yachi]

We've always kept combined finances, but to be honest out of 13 years only had 2 to 4 years with two incomes.  We each don't spend much so we typically don't need to be confined by a budget to limit what we spend on hobbies, etc.

Have maternity clothes purchases come out of the share money pot?

Edit: I should have clarified that we would find splitting up the expenses into his/hers more work than we want to do, although I can see the benefit in directly tying ones own money, savings, hobby, etc. to ones own salary.

[Le North Dreamer]

Have maternity clothes purchases come out of the share money pot?

My SO was gifted a whole bag of maternity clothes that are exactly her size (by a coworker) so we did not have to purchase any so far (lucky us). If the need comes, any such purchases would be paid by our joint account.

[ice_beard]

Wait, you're having a child together but still split the bills?? 
As my German friend said about our fat free milk, "This, I do not understand!"

[Le North Dreamer]

Wait, you're having a child together but still split the bills?? 
As my German friend said about our fat free milk, "This, I do not understand!"

A lot of answers hinted that splitting bills might become a nightmare after having a child. In most recent discussions on this topic with my SO, I brought up the idea of doing it the other way around going forward - putting all our earnings in our joint account and giving ourselves an allowance. We are still evaluating how to do this but money has never been a difficult subject for us so I'm certain we'll find a way to handle this important change in our life.

[Captain FIRE]

It's doable, but becomes very complicated.  If you're out with the kid and s/he gets hungry because you are running late so you stop for fast food, will the other partner say you didn't plan ahead to bring food so it's not their responsibility to pay half?  That's really nitpicking, but there's a lot of things that could be debated if needed or not, and therefore who is responsible.  In our house I do a lot of the household buying, all of the gift purchasing for both sides of the family etc.  That doesn't mean I should be on the hook for paying for all of it, and I'd hate to have to justify every purchase.  (Although actually I do tell my spouse about pretty much all of them and he has started to ask if he can instead give me a budget not to bother him about items below X amount.)

I guess my other thought is that you're tied for life now to a person by virtue of having a kid.  Yes they leave home around age 18-22, but you'll always coparent.  Money matters a lot less to me than the raising of a kid.  If I didn't trust* my spouse with money matters, I sure as heck wouldn't have a kid with them.

*I understand people keep separate accounts for other reasons (e.g. inheritance, stepkids), but a lot of them don't apply to us.

[Le North Dreamer]

It's doable, but becomes very complicated.  If you're out with the kid and s/he gets hungry because you are running late so you stop for fast food, will the other partner say you didn't plan ahead to bring food so it's not their responsibility to pay half?  That's really nitpicking, but there's a lot of things that could be debated if needed or not, and therefore who is responsible.  In our house I do a lot of the household buying, all of the gift purchasing for both sides of the family etc.  That doesn't mean I should be on the hook for paying for all of it, and I'd hate to have to justify every purchase.  (Although actually I do tell my spouse about pretty much all of them and he has started to ask if he can instead give me a budget not to bother him about items below X amount.)

I guess my other thought is that you're tied for life now to a person by virtue of having a kid.  Yes they leave home around age 18-22, but you'll always coparent.  Money matters a lot less to me than the raising of a kid.  If I didn't trust* my spouse with money matters, I sure as heck wouldn't have a kid with them.

*I understand people keep separate accounts for other reasons (e.g. inheritance, stepkids), but a lot of them don't apply to us.

Both my SO and I believe it would be really simple for us to keep the system as is (separate and joint expenses), the reason being that we don't typically challenge the other's joint expenses and stay very far from nitpicking on these. Lately, most if not all of our expenses are joint expenses with the whole COVID situation so it's been quite easy to manage. We've recently started making some baby/mom related purchases and all of these are joint expenses that I did not look at beforehand and will happily pay my share of.

IF one of us disagrees with an expense made by the other for the kid (or other joint expense), it will be paid jointly anyway, but we'll try to get back on track the next time around. We both are confident that the other will be reasonable in such expenses and so far have discussed any higher expenses beforehand (over 2-300$). There is, for now, a whole lot of trust in our relationship, and we don't put a spouse "on the hook" for purchases. We'll make sure to keep communication flowing so we remain on the same page in terms of kid/mom expenses in the future, whatever the salary situation.

Still figuring out whether or not this system will work in the future. Both of us are really open to going down the joint route if our system becomes too hard to manage. All in all, we'll make sure that both of us are hit equally by the salary reduction related to my SO's mat leave.

Cheers!


 

[Captain FIRE]

Sounds good! 

You might also benefit from reaching out specifically to those who had separate finances pre-kids, and inquire as to their experience keeping them separate or joining together post-kids.  It's probably hard for those of us with joint finances to fully envision ourselves on the other side, and those who have been can share issues that cropped up and how they solved them.

[BSL18]

Same situation here, same area (QC as well), same system as DINKs (2 personal accounts, one joint for common purchases).

1. For the maternity leave, what I did is calculate a rough number for her loss of earning ahead of time, and then just dumped additional income (right now was a good time, we both stop contributing to AE, RRQ and such in October or so, annual bonus are coming) on her side to make up for the loss. So after all is said and done and she's back to work, she'll have saved just as usual.

2. We always make sure to over-contribute to the joint account, that way we are already sure we'll be able to pay for anything usual. I recently added 100$/week for good measure as it seems to be a reasonable number for a newborn. I'll recheck after 2 or 3 months and make sure we're still on track. So the whole system is going to remain the same. Really the system we use isn't that different from people with joint finances, we just have one additional transfer to the joint account. One thing that helps is that my SO has a clone from my credit card, so it all ends up in the same place anyway.

[waltworks]

If you are really not on the same page about finances, or you don't trust each other very much, I think separate accounts and some sort of complex system to "pay" the SAHP for their childrearing work is probably your best solution, sure.

If you actually are vaguely on the same page on finances, though, it seems like a waste of everyone's time. Just combine everything and have personal allowances if you must. That's the stage of life you're at when you have a family, and without herculean legal efforts that's effectively what's going to happen (ie, 50/50 split) with the money if you get divorced anyway in most places. 

-W

[HPstache]

I'm with the other users who are recommending starting joint finances...  It's time.

[Captain FIRE]

...without herculean legal efforts that's effectively what's going to happen (ie, 50/50 split) with the money if you get divorced anyway in most places. 

They aren't married.  OP said "French Canadian" so there may be some type of common law going anyways, but I wouldn't assume that money would be split 50/50.

[EricEng]

My partner and I had split finances prior to having kids. (We were and are still unmarried.) It only took a few months of having an infant for us to decide to just put our $ in one big pot. We still each have a separate checking for the equal amount of spending $ we each take per week. We can do what we want with it (save, invest, or spend). For us, it just seemed unnecessarily complicated to figure it out separately.

Agreed.  Split finances is easy and fine pre kids.  Post kids, that gets messy fast and full of relationship landmines.  All my friends who are getting engaged and married I tell them it's fine to stay split finances if both are working after marriage, but plan on a merger when the kids arrive.