Combining finances with partner?

Discussion in 'Accounting & Tax' started by Jmillar, 26th Sep, 2020.

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  1. Jmillar

    Jmillar Well-Known Member

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    I got engaged last weekend and just trying to figure out what to do with our finances. My fiancé is 23yo, and earns around $70k pa, no properties. I'm 28yo, high income, 8 IPs, PPOR, 2 trusts set up for investing in property and shares so my accounts are a little complicated already! I have no issues giving her access to my finances etc, but also want to keep things simple.

    The plan is to keep buying properties in my name only (or Trusts where appropriate), as including her name only hurts her serviceability and doesn't help mine. My savings are kept in an offset against our PPOR (title and loan in my name only).

    Would it complicate things for loan purposes etc if she shared this account? I'm guessing it would become an issue for banks when I'm claiming on my assets & liabilities statements that I have savings of $XX (but really it's joint savings. Also I'm thinking they may overestimate my living expenses based on what will end up coming out of the account (given it will be used for expenses for 2 people).

    Thoughts?

    How do most couples share finances? I think it would be a hell of a lot easier if I didn't already have a number of assets and debts in different entities.

    Thanks
     
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  2. thatbum

    thatbum Well-Known Member

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    You've named mostly disadvantages and no advantages in combining finances. Isn't it an easy choice then?
     
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  3. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    Keeping your finances separate allows for many strategies such as
    - spousal loans
    - spousal transfers
    - estate planning such as inheritance strategies
    - asset protection - but could also be improved by mingling too (different strategy).
     
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  4. BunnyXiao

    BunnyXiao Well-Known Member

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    Thoughts?

    How do most couples share finances? I think it would be a hell of a lot easier if I didn't already have a number of assets and debts in different entities.

    Thanks[/QUOTE]

    Yours. Hers. Ours accounts. Think of the worst-case scenario and work backwards from there. Love is a non-tangible. Feelings change. What if one day love becomes hate and you are sleeping with the enemy who has all the dirt to dish to the lawyers?
    Go in with a fresh slate and understanding and make a new life together. Previous stuff leave off the table. Find someone to draw it all up for you.
     
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  5. wylie

    wylie Moderator Staff Member

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    We combined everything, but I was living in my own house when I met hubby (I was 23) and he bought his first house a few months later. So we each brought the same roughly, to the table. Never thought about keeping things separate.

    But perhaps if things were very different and one was financially much better off, we would have thought some more about it.
     
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  6. Trainee

    Trainee Well-Known Member

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    Sharing finances is more about being transparent about what you each have (and owe), agreeing on how to pay for expenses, and agreeing on investment plans?

    It doesnt have to be joint names for everything. Though that should be discussed and agreed between you.
     
    Last edited: 27th Sep, 2020
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  7. Westminster

    Westminster Tigress at Tiger Developments Business Member

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    Sometimes it's easier to set up one new joint account that you both contribute to for joint things/goals - utilities, groceries, insurances, holidays etc
    Or you look at the budget and divide it up - one person groceries the other person utilities and insurance
     
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  8. wylie

    wylie Moderator Staff Member

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    So true. Most of the houses we've owned over the years have been in the name of the best person for tax purposes.

    But that can bite you too. Now hubby is retired, his land tax is crazy, because our IPs are in his name. I can pay transfer duty to get one into my name, but that costs a lot too.

    Sometimes you have to go with "best guess" as to where you will be in 30+ years. And then adjust as life changes.
     
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  9. Curious2019

    Curious2019 Well-Known Member

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    Agree with what someone said earlier, open a new joint account and both contribute to that and use for joint expenses. That’s how we started. Now we have joint investments etc and our finances are combined but it is a bit of a learning experience learning how you and your partner spend money differently and attitudes towards saving or investing!
     
  10. Tillie

    Tillie Well-Known Member

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    We have pretty much everything combined. However we both have our own everyday bank account and absolute freedom to use funds there as we see best fit.

    Even if we both have equal access to each other's and also the combined bank, credit cards, offset and loan accounts, it is me who controls the finances, pays bills and transfer funds around. Mainly doing that to minimise the interest or making new share investments.:D

    When moving the money around I'll make sure that I leave hubby's account some spending money. We mostly use credit cards for all expenditure anyway and I always makes sure the credit cards balances are paid off fully before the due date.
     
    Last edited: 27th Sep, 2020
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  11. wylie

    wylie Moderator Staff Member

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    This is how we do things too. Total trust both ways.

    It annoys the heck out of me that I have to hand the phone to hubby to identify himself to a bank or utility company if there is a question I need to ask.

    I used to be able to have him on speakerphone so he'd answer and if he couldn't, he could ask me. For a while now, that has not been allowed, so I have to write the obvious answers he might get (credit card limit, number of loans etc) and hope he can get past the questions. Perhaps the bank thinks I have him tied to a chair and he's under duress just so I can ask something about the interest rate.

    I get that they need to identify that it is him, but let's face it, it could be the pool boy that I've told the appropriate answers to. And our bank won't allow him to sign something to keep on file saying he authorises me to deal for him as long as they identify me.

    The only way I can do this is to apply to log in as a business account, which means a lot of rigmarole to transfer all seven loans to a different area, and I don't trust that this won't be stuffed up at the bank end. We have a long history of having things bungled, so I'm not prepared to take the risk.

    Rant over... :mad:

    Edit: At least some utilities allow him to put me as being able to speak with them these days.
     
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  12. Curious2019

    Curious2019 Well-Known Member

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    @wylie i feel your pain in this one too! I pay all the bills etc for hubby’s business and got this wall sometimes too. I’ve mainly overcome it by being added as a signatory on most of his business accounts which has allowed me to be identified by the bank now - also after 2 years of holding onto his banking dongle, finally got my own which made things easier
     
  13. Jmillar

    Jmillar Well-Known Member

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    That's a good point, and good way of looking at it. She fully trusts me to invest the money well, we trust each other not to waste money on stupid things, and we know what each other earn - it's just hard to share an actual account. Unless we set up a new one, but see below...

    Yeah we thought about setting up a joint account, but I always keep all my cash in my offset against the PPOR. Even if it's only $5-10k, I'd rather have that money offsetting my non-deductible loan at 2.8% than sitting in a savings account earning 0%.

    Currently she pays for most groceries and internet while I pay for mortgage, electricity, gas, etc. Not really any different from having a joint account as you say. I earn a lot more than her so I figure I should just pay for the majority of things :)

    Luckily we have the same view on money - ie we work hard to earn it, so don't blow it on things you don't need. I always shop around before I buy anything. I'll always check multiple websites to see if I can save money on whatever I'm about to buy... even if it's only $10 or $20! At the end of the day, every $1 you save is $2 you don't have to earn :D:D
     
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  14. Trainee

    Trainee Well-Known Member

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    Just get a joint credit card directly debited from the offset.
     
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  15. Tillie

    Tillie Well-Known Member

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    Excatly. I probably would have difficulties to be in the relationship with someone that does not share the same views on money. I would be completely intolerable, horrible, nagging partner to someone, who does not live within their means.:mad:
     
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  16. Joynz

    Joynz Well-Known Member

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    If you choose to have kids, I don’t think this will work (I.e. one person paying the mortgage and the other paying for the groceries etc).

    Whoever stays home to look after the baby, should not feel that they have to ask permission to spend money so consider what will happen if you do both choose to have kids.
     
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  17. New Town

    New Town Well-Known Member

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    I would encourage her to buy one or two investment properties in her own name using your skills to buy and manage. That way she has her own assets for her own peace of mind, and has something to save towards and put her money into herself.
     
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  18. Jmillar

    Jmillar Well-Known Member

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    Yep, very conscious this will all change when she's pregnant. We would then have joint account/credit cards etc. I think when we have a baby and she stops working, my serviceability will be shot down regardless so the plan is to acquire as much as possible before then. And then I can focus on developing my properties when we have kids.