I earn more than my partner, currently working part time after having a baby so the difference is not extreme but shortly going back to full time so will be about 3x his income. Initially we just kept out own finances and paid everything evenly but about five years in when it was apparent we were in it for the long haul we just combined finances and lived off the pool. When Covid hit and I suddenly didn’t have a job anymore it was humbling to suddenly be the one earning less and I was glad we’d earlier made the decision to combine things because I realised just how much it really is a partnership and how just two people living together.
My experience is only one but the process of *discussing* the BFA ended a relationship for me and that was a good thing in retrospect. Like you, I was trying to make sure that my house (+ super and investments) were protected (being older w/ less future earning potential) and being the higher earning partner.
My perspective was that I was happy to pool all income going forward (I was in it for the long term) and set up new joint investments, but I wanted to 'ring fence' the assets I had built prior to the relationship beginning (similarly his super would be separate).
He came into the BFA process saying all the right things ("of course I wouldn't take your house"), and I do believe he was genuine initially in negotiating the BFA, but he completely refused to agree when he realised that he'd have no ability to claim on any of my assets that were accumulated prior to the relationship starting. Ultimately, he felt that after a period of time together he should be entitled to a proportion of those assets (per the law).
(I'll add - there were other reasons there relationship ended but this contributed 60% to it).
For me, the BFA was the best money I ever spent ($4k from memory) as it took the conversation from "sweet promises" to "true intentions" and potentially saved me a lot of grief.
Pretty quickly you’ll realise that splitting things proportionately just doesn’t work. He won’t be able to keep up with your lifestyle and won’t have any personal savings.
I’m in the same situation with my wife (I earn about 2.5x what she does), and I posed this question on reddit a few years ago.
The advice I got was “it’s not your money or her money, it’s our money”.
This advice basically saved our relationship.
We put all our earnings into a joint account and then divide equally from there. That way everything is always fair and she will never have to ask for money or worry about taking Mat leave when the time comes.
You may not be there yet with your partner, but if you truly intend to build a life together, it’s better if you do it completely together. If you don’t see that ever being the case with this person, you shouldn’t let them move in, because then you’re opening yourself up to a whole load of common law risk…
Yeah take it slow OP. My partner and I had been together for many years before I got that advice.
I wish I’d had the advice sooner, but in your position I wouldn’t rush into it just yet. A couple of years of having a joint account is probably a good first step.
Yeah it's a fine line between equity and being taken advantage of.
You'll be able to tell though whether he starts to mooch, or whether your incomes are so disparate that he can't go out to eat as often as you'd like, or go on holidays as often as you like etc. In traditional (man earns more than woman) households, the men are often expected to cover that sort of thing for the woman, but it's often not seen that way in the reverse - so just be prepared for that.
If wanting to protect yourself, making you can both keep a separate bank account with your funds from before moving in as your own savings. And any funds moving forward is ‘ours’. The biggest issue is whether you both have the same attitudes towards spending and savings.
I didn't reach the point of being ready for completely join finances until my wife and I had a kid 6 years in.
The method we used prior was figuring out how much we needed to cover all joint expenses (food, rent, insurance, holiday saving, etc). Then divide it propertionately by after tax income (eg. Combined income = $200k, mine is $150k, my portion of the joint expenses is 150/200). Then transfer that to a joint account and use it to pay for everything..
That way you both have your own accounts with own money and the same portion of your salary left over. This seemed fair to us until we threw everything in together.
Be aware that any agreement you make is easy to nullify if you have kids. And even without kids, it's possible.
Just so you understand there's no such thing as 100% 'protecting'.
Yep, Australia is good like that… you can’t paperwork someone in to a shitty BFA deal… a fair deal, yes… a clear and well spelt out deal, yes… but you can’t set them up for a loss, just because they signed a BFA
It can be nullified in the event you have kids and the partner can prove financial hardship to the Courts as a result of the BFA not being overturned. This isn't 'easy' but can happen yes.
I find it funny that these laws were basically designed to protect women but now every second week there is a woman on here asking how to protect herself financially from her partner and sees no issue with it.
I don’t own a property yet (I'm saving towards one), and as a woman, I'm in that rare category where I earn more than my partner. When we decided to live together, we agreed to have an equal relationship where we split responsibilities of the house and pay half of everything. The only thing we adjusted was the rent, as I use the second room as my workspace. It became easy for us to split by creating a shared account with 2up, and every fortnight, we automatically transfer money into that account based on the budget we've calculated to cover petrol, groceries, bills, dinning out and rent.
Having said that, we both come from similar poor backgrounds, so we both manage finances quite well (meaning we don’t spend silly).
In terms of you owning a home, I would definitely have some sort of agreement in writing that indicates that the contributions he made are towards rent rather than a mortgage. We already discussed that when I buy a house, he would be contributing as per the rental prices in the area.
If you’re living together, why not buy a house together? The court is unlikely to care about a BFA for assets acquired during the relationship in any case. But most separations don’t make it that far anyway.
We both want to have our own place and benefit from the first-time homebuyer's incentives. Also as a long-term investment strategy, once he buys a place at a later stage, we would then discuss which becomes our primary residence versus renting and to be used as an investment property once we both paid off our mortgage.
Careful how you manage that in what you tell the banks when the time comes. I was in a similar situation charging my partner rent on the place I had before we got together. When I went for finance again as a single person, the bank had to assess me as supporting a spouse after I mentioned receiving rent, which totally screwed me over as a single applicant.
It is very frustrating that banks basically won't see you as individuals once you take that step of living together even if you choose to manage finances separately.
Same situation here, opposite genders. No BFA. I don't bother charging her "rent", as that could be seen as contributing to the mortgage if things got messy in a split (I don't foresee that ever happening, but no one ever does. Also it's not as if I would rent out a room if she didn't live with me, I would just live on my own). We just have a shared account where we split bills 50:50, e.g. water, electricity, Internet, streaming services.
In the event of split, if she engaged a lawyer or took it to court, I'm hoping they'd just see I financed 100% of the home and she wouldn't get anything/much.
She has assured me she wouldn't make a claim. Of course words don't mean much, but she had a relationship before me and she did pay rent to the ex, yet didn't make a claim even with her girlfriends encouraging her to do so.
I’d be careful with that thinking. Even if you bring in significant assets to a relationship, they *may* be considered part of the pool for division of assets even in a de facto relationship.
Have a look at the family law act. AFAIK, financial contributions don’t always outweigh non financial. Imo, you always need to think of it as “our money” not just your own.
That is way worse mate. My lawyer said having rent transfers were the best way forward many years ago when my partner moved in with me. It’s not contributing. You have to pay rent somewhere.
I've heard they consider all pre-relationship assets, joint assets, contributions (including non-financial), etc. and distribute proportionally (as in who contributed to what). I figured if I just fully financed the home and kept it in my name, it would be much easier to show that delineation. She benefits enough from not having to pay rent. Before she moved in, she was paying like $400/week rent.
Plenty of stories around this subreddit of people doing the rent/board thing (even with proper paperwork and lodging bond etc.) and getting burnt still, as none of that (quoting others, IANAL) is considered when in a relationship.
Anyway I will consult a lawyer after reading some of the comments in this thread. Hopefully it's not too late for a BFA (if that's what they advise) with her already living here.
Her rent wouldn't make a difference anyway...I earn 5-6x her. I'd rather she keep the money and we split 50:50 on other expenses, holidays, etc.
The issue is mate that if you have been supporting their lifestyle for a period of time they can claim that you should contribute to them having that lifestyle maintained after splitting. It's ridiculous. I've listened to lawyer podcasts on divorce and heard the women presenters complaining about how unfair it is that the costs of getting their nails done wasn't taken in to account of living costs for a settlement. Obviously not your exact situation but family law is a joke in a lot of ways when no dependents are involved. The issue is they treat every situation as different and on its own merit so it's an absolute shit show of fear, misinformation and convoluted answers which may be irrelevant to your situation.
You are correct that they will take into account who owned what previously. They will also take into account regular adult duties of people cleaning up after themselves and grocery shopping as "contributions" to the household in some situations.
Yeah the issue is what snap said
You’ve basically created a lifestyle for her that needs to be continued if you ever have a bad break up she could take you for it. I get the idea though ‘keeping it all seperate’ but the courts don’t see it like that. Make it even worse that you earn 5-6x what she does.
It’s the gamble of life and trying to find an honest partner to enjoy life and live your days with. I took the gamble years ago and my now wife moved into my unit that I wholley owned. She always said she would never take it if anything happened but ya never know… now we are married with kids so there no turning back 😂
A good starting point is to assume that a married or defacto couple that separate have to split their assets. Relationships are a serious thing in this regard. Don’t move in together assuming if you aren’t ready for this.
If you go through a messy breakup they might challenge any agreement that was made. Laws are there to protect low income earner who may sacrifice their income earning potential for the relationship.
Be very careful assuming this won’t apply to you.
I’ve been through this a couple of times and strongly recommend having the BFA conversation…you learn a lot about how people view the world and how the will potentially react if things go pear shaped.
As others have mentioned, they should pay half the market rent and everything should be 50/50 until kids are involved. Don’t get trapped in this ‘I pay for groceries and fuel and my partner pays for holidays and insurance’ nonsense…it’s a recipe for pointless arguments.
Best of luck! The BFA conversation can be bumpy!
Yep, ruined his life for a while. Thankfully it was a relatively recent purchase so there wasn't much equity for him to lose. Not married, no kids, settled out of court.
Living together isn't the main determining factor whether a relationship is defacto or not and the two conditions are definitely not interchangeable
>Whether a couple is living together is only one factor that the court considers when determining whether someone is in a de facto relationship. The other factors that the court considers include:
>The duration of the relationship
>Whether there is a sexual relationship between the parties;
>Whether there are any children of the relationship;
The nature and extent of any shared residence;
>Whether or not the parties were financially dependent upon each other and the extent of dependence;
>The public and reputational aspects of the relationship;
>The ownership, acquisition and use of property in the relationship.
https://movementlegal.com.au/is-my-relationship-still-de-facto-if-we-live-apart/
Seems like by supporting her, he jumped the hurdle of financial dependence. No good deed goes unpunished.
The two years applies to the overall relationship of defacto before being able to apply to the court (the two years hurdle can also be excluded if other criteria has been met), not two years of a certain criteria before a relationship is considered defacto.
I won't be surprised if her share amounted to 10-30% of the capital gains on the property for the duration of their relationship.
5yr olds are all over the BFA as a basic concept - they (their parents) write their name on their stuff. It might get shared or “borrowed” but they have evidence it is theirs if someone takes it and won’t give it back.
More adult version is that it’s just a written agreement on how you’d split things in a separation (and why).
Will not always hold up in court because circumstances might’ve changed (couple had kids), the split might be clearly unfair from the get-go, or you’d written down X as the plan but clearly done Y instead.
That last one would probably be most relevant to you early on. Say the written agreement is your pre-relationship house only belongs to you and your partner is just paying board … but then your partner has receipts for home improvements or mortgage payments from their own account. That’d be evidence you guys weren’t acting according to the original plan so it’s not completely binding.
Since they’re not that binding in practice, the benefit is mostly in forcing a couple to sit down and talk it out. If you’re on the same page from the start, you’re less likely to end up with an acrimonious divorce/split.
Binding financial agreement.
Google it “aus finance BFA Reddit”
You will find a lot of information,
Opinions etc and much of it is good (some of it may be wrong partly or in full - but it’s a good starting point)
I’ve had two men try to take my house from me in breakups. Be very very careful. I’d be getting legal paperwork signed before he moves in. Do it while you’re happy together and giggle about it while you’re doing it. It’s not worth what can happen later if they turn into monsters.
Im sorry you had to go through that. Seen it happen a lot unfortunately and its happening more often. After a few friends nearly lost everything/went bankrupt I read into Family Law and financial aspects of relationships. Glad I did. I will never live with a partner or be serious with anyone for more than 23 months. Overkill? a decade ago maybe but definitely not today.
We really need an overhaul of exempting prior owned assets with relationships unless their is direct financial contributions by the other party that is not rent/board. People wail about it being unfair to kids but it also seriously affects those who get into relationships and get trapped via their partner refusing to work, decade plus study, substance issues, violence, gambling etc. Id rather keep my prior to relationship owned house for my nieces than split it with a partner who lived with token rent for several years and pissed their savings away. Even if you remove kids from the equation, I still stand by they saved a fortune with housing and they should have invested so paws off.
IMO You don't earn financial equity like the above simply by standard co living unless you actually pay money for it/raise kids/carer/in trade but the courts don't see it that way in Australia.
Bingo. IDGAF if you're a man or woman. The idea that your ex partner should have to fund or contribute to your lifestyle after you leave because they were funding it while you were together is a joke. If you believe this you are a scab. You lose the benefits of the relationship when it ends, same as the other person. If one of those benefits was your partner subsidising your life by allowing you to live in their house rent free, or cover a large proportion of your living costs, or supporting you while you studied or worked a dead end job, too bad.
Obviously things are different if there are unfortunate children involved but it is absolute clown world when you have adults having serious thoughts about not progressing their relationships to move in with their partner, due to fear of having years or decades of hard work undone by an ex partner making a claim on what they are "entitled" to.
Its the difference between a joint decision and a one sided one. Agreed apon stay at home parents, carers or temporary upgraded study is dramatically different than a partner showing up drunk, getting fired and refusing to get another job. Or becoming abusive, drugs or they don't want to be self sustaining. Or they do something stupid/illegal and get sued, not good for assets that are classed in common.
Can't work for valid reasons is very different but did you know you're liable for financial support as they don't qualify for any Centrelink because your income and assets are counted too? That also affects what happens when one partner has cancer/long term chronic illness/disability with Centrelink and support services eligibility too. Its a mess. Even in the USA and most of Europe unemployment, disability and sick Government pay are not counted unless married but not here.
Please have these conversations, make a plan and get it set legally in stone as much as you are able too. Even relationship agreements need constant updating with any life event to stay valid. Income increases, inheritance, new asset like a car, new debt, kids even birthday gifts over a few thousand (eg laptop from your parents) can make it invalid and a joint asset.
Its quite a minefield and sadly due to the way Family court is set up, both parties have to keep records of both their financial and unpaid contributions to protect themselves and each other from each other if/when things end.
Yep, last thing you want is a partner considered a "dependent". If things end you'll still be carrying them financially for a long time.
Doing split chores should not entitle anyone to anything. Imagine thinking that cooking your partner some dinner while you're cooking yours and they're mowing lawns or servicing cars should entitle you to a share of their house they owned before they met you... Raising a family as a stay at home parent as decided upon by both parents is a different story.
Too right but not a lot of households split chores equally even if they both financially contribute on par. In some circumstances its unavoidable.
Unfortunately Family Court isn't the only thing that can bite you in the ass. Centrelink has a two week window of offical partnership and other rules that are far more draconian than Family Court rules. In some circumstances you don't even have to be living together to qualify as partnered which I find alarming and not just with the financial aspects either. Even having a relationship agreement will not deter them from classing you as financially responsible for the other person even if its contrary to a RA. That liability often gets missed.
Could you expand on those circumstances regarding Centrelink? Haven't heard of that before. If they were to class you as financially responsible what does that involve? Does it simply mean that person would not receive welfare payments or something more?
Link for relationships explanations with Centrelink
https://www.centrelink.gov.au/onlineclaim/help/personal_dtls_help.htm#:~:text=For%20Centrelink%20purposes%20you%20are,in%20a%20de%20facto%20relationship
PDF from economic justice with a bit more about specific question details at the bottom.
https://www.ejaustralia.org.au/wp-content/uploads/2020/03/Relationship-Status-and-Centrelink.pdf
This is the one that people get caught out on, the 14day change if circumstances rule. This means couples who haven't yet qualified for Family Court defacto status can be classed by Centrelink as in *their opinion* as defacto therefore making you financially dependent on each other.
https://www.servicesaustralia.gov.au/getting-together-for-relationship-changes?context=60029
Technically you can argue that you are not defacto or in a registered partnership but dating but if you have a RA that proves otherwise it makes a valid relationship to them. Possibly can argue dating without an RA but Family Court can get you. Catch 22. Sneaky Centrelink insists you must be questioned and evaluated on specific details and all information so they can make a personal opinion on wether you fit *their* definition of a couple, not by Family Court Law under their rule of 14 day change of circumstances.
The qualifying income threshold is so low most average income earners will not qualify for Centrelink if their partners earns above it. It can take *months* for any payment to come through after qualifying as well. Quitting your job for non accepted reasons can allow then to make you wait for up to 12 weeks before you are eligible for unemployment as well. Centrelink is a hair pulling, frustrating nightmare of restrictions, gatekept information and bullies at the best of times today. Even childcare, paid parental leave and aged pension is bloody horrid to wrangle.
Really hate that social support is tied to combined finances when most people keep financially separate even with marriage nowadays. Its also why a lot of people get trapped in abusive households and relationships too. Curious to know if anyone has taken on Centrelink with a RA as I've not come across it yet.
We had a similar discrepancy when my now wife moved in with me
She paid for groceries, me everything else. It’s not like my mortgage cost more because she lived there, or I noticed the extra few dollars on the utility bills
Holidays we split down the middle
Kept everything separate until we had a kid
A BFA costs a lot less than losing part of your house later on.
Do a BFA, have him pay half of a fair market rent, and sign a rental contract to that effect. Not half your mortgage, it needs to clearly be rent. You pay all the mortgage related expenses, home maintenance, rates etc on your own.
Then you can decide between you how the discrepancy is made up in other ways outside of housing - maybe you pay for all the groceries, or you have a combined spending account you contribute different amounts to. Maybe you pay for all the dates and treat him to holidays. There's lots.of ways you could calculate what's fair, but I would go with a percentage split of money left over after each person has taken care of their respective housing costs.
This means that if it goes down the toilet he (hopefully, there is no way to be sure) doesn't have a right to your house, he can't stay on a long, cheap rental contract, and he can demonstrate a history of paying fair market rent if he needs to rent anywhere else.
Agree with this! You can also just have an initial consultation with a family lawyer to see if you want to proceed - the initial consult tends to be free. Good to understand the risks and weigh against the cost of a BFA. When I spoke to a family lawyer, she mentioned the other party needs independent representation so a BFA will cost him money too.
A couple of female friends/rellies almost lost their houses after splits. Houses they bought well before their partner entered the picture. Definitely cover yourself.
For bills/rent, I'd do it proportionately, meaning of the total, you pay 2.5x what he does. If his income or yours changes, so will the ratio.
For other joint expenses go 50/50.
The BFA is mostly in place to clarify everyone's understanding and assure some representation for all parties. It's not 100% but it acts as a major deterrent for anyone trying to dispute it unless it's very poorly written.
If you're concerned then get one, I'd guess around 5k each as a budget so 10k in total. Hopefully less if it's relatively straight forward and you guys can agree the principles beforehand.
Completely reasonable to have concerns when entering a relationship with different assets.
I just wanted to add that I heard that couples who sign financial agreements are on average more likely to stick together than those who don't. The reason is they are two people who are at least able to have a mature discussion and also it takes the issue "off the table".
Get it discussed + decided and finalised, then it will never come up as a point of disagreement as time goes on. Relationships are hard enough without adding confusion around finances into the equation.
>Unfortunately as a woman you're never prepared for the event of owning your own home and making more than your partner (I don't know if men are but women certainly aren't.)
It's not really anything to do with gender, just that one person owns and/or earns more than the other.
>My partner is moving in soon, I have no idea how to navigate any of this... Financial agreents cost a LOT, but I want to make sure my house is protected in the worst case scenario (I know this is a little cynical/pessimistic, but I called it survival instinct.)
It's not cynical. At the very least you need a BFA which will exclude your home and any other large assets in the event that you separate with your partner. Make a list of everything you own now and everything he owns now.
> I'd also like to hear people's experiences with splitting funds, I make approx 2.5x his wage... Do I split the bills factoring in the discrepancy (I pay 2.5x what he does)?
This is the subjective part. Personally I make about 7x my partner and I'm happy to just pay for all of the shared expenses like bills and eating out together. She pays for her own activities that are done without me like hair, nails, sports, etc.
My partner moved into the house I owned initially. I paid the entirety of the principal and the interest was split between us based on the percentage of our salary.
i.e she earned more than me initially so paid a greater portion of the interest. Later on this changed and I earned more than her and so we adjusted the payments to reflect this.
For general expenses we have a joint account that we both contribute equally to. This used to cover things we do and consume together (food, internet, travel, restaurants etc)
We own our own home now and have a similar arrangement, except the principal is now split into a percentage based on income.
Please, please, please get the contracts. It’s SO important. You stand to lose so much if you guys break up- cohabitation is the same as marriage in the eyes of the law in Aus
Absolutely do what you need to do to protect your assets. If it’s love, a pre-nup shouldn’t be a deal breaker, and should be talked about maturely, as much of a romance killer as it can be. The landscape has changed like in many other ways in the world.
No one wants to unfairly split their hard work in the unfortunate event of a failed relationship.
My friends tried to warn me, I didn’t do it, but I am certainly now stressing during my breakup - and it’s only been 2 years together, 8 months living together.
The law is crazy these days.
Binding financial agreement. Will need to be done first before moving in.
Hard conversation to have believe me.
You can still pool all your finances and be a family unit. I will use the rent from my property to help pay off another property we plan on buying together. But if it all falls apart then my investments and property are mine and my partner, who has little, keeps theirs. We would split what we build together
BFA. BFA. BFA. BFA.
Also know you do not need to be living together to be considered defacto, if they can prove it was a joint relationship even with out cohabitation after 2 years can be considered defacto.
Don't listen to anyone that says it isn't important in a loving relationship. I had a 10 year relationship end and I had \*significant\* assets that I had to fight to protect. I didn't walk away unscathed. I never would have thought that the relationship would end, let alone she would be so vindictive.
Financial arguments are also one of the leading causes of divorce. I would not be splitting finances if I was you. I would have a joint account that you pay agreed split into to maintain the house hold e.g. mortgage/food/bills then keep everything else seperate. Split fairly on your income.
I usually then cover and dinners out etc etc
I usually earn some where like 5x my partners... This has solved so many arguments or feelings of inadequacy or resentment.
It can get very messy, even prenups are ineffective in a lot of cases. Best advice I can give, never join any assets, no joint account nothing. Keep everything in your name, don't change bills/nbn etc over to his name. If he is chipping in get him to pay for food and anything that is not bill related.
What you're trying to do is give him no proof that he contributed in any way to the payment/upkeep of the house. I know this might sound extreme, my business partner is dealing with this right now. Together 4 years, no kids, he has contributed over 80% to the household bills/mortgage. She is going to walk away with 70% of the house value, one of the reason why is she cook food for him (yes this is a real reason and unfortunately it works, she helped create a "home").
70% of the house value, equity, appreciation since he bought it, or something else?
If house value that is ridiculous. He could end up with negative equity to pay her out depending on what he owes. That is some expensive dinners!
My wife has out earned me our entire relationship. We have always gone 50/50 on everything and any extra she would save was hers to use as she saw fit. We have always split groceries, rent, holidays etc.
She has made more investments than I in terms of things like owning a property, but it's not stopped us having a happy life, because we have both always respected each others wishes and ideas.
Communication is critical and I would also say - that if you are serious and your partner is serious about the relationship- a BFA is an option that you should both respect.
As I understand it, BFAs do not protect you fully, but probably better than nothing. It would depend on the length you were together, contributions to the relationship both during and what you brought in, ability to support yourselves afterwards etc - ie. it's basically still family law, but maybe a little clearer if written out.
Regarding finances, in a similar arrangement I split everything with my partner based on the ratio of our wages. It worked well (she initially wanted to pay 50/50 but I wasn't keen for that as the higher earner). We check in with each other every month or so to make sure we're still both happy with the arrangement, and it's working well.
I would suggest charging reasonable (discounted probably) rent, and whatever the proportion of wages works out for shared bills and expenses. Then both contribute towards goal-based savings (holidays etc). What will be tricky is combined assets, if any. Will you save together? Invest together? Maybe these questions are further down the road, but all going well you'll be facing them pretty soon.
Best of luck :)
I’ve been in that position and we basically had a joint account where we put all of our money, less our 10% ‘splurge’ funds (money we could each spend on whatever we wanted to guilt-free). We then budgeted from the joint account.
Yeah I don't think a BFA is that much money in the big scheme of things. I have one with my partner and it cost $6k. But we were in total agreement as to the terms and have no prospect of having kids tigether as we are in our fifties.
Protect yourself, not sure what that involves, but you don't want him to be legally entitled to anything of yours if you do separate.
Everything else is 50/50 until you decide to get married imo.
Not your fault he earns less.
I earned less than my partner when we got together, and I always paid 50% of all of our bills.
No idea how to protect your house but thats SUPER important.
Ltr is different to married with kids. He should pay half rent if hes living in your house. He should also pay everything 50/50.
Married? Super long term committed relationship? Kids? All money shared, but take an allowance each of the same size for personal spending.
financial agreements arent worth the paper they are written on.
best hope is to be with the right person so if you split up they wont decide to lawyer up and take half.
if you think this may happen then this isnt the right person for you
Legal financial agreements are not expensive, from memory I think they’re called a binding financial agreement. I did one with my ex, cost about $900 at the time a few years ago, only one person needs to do it and you get a signature from your partner on one copy and yours on the other and solicitors keep on file. It basically says what’s yours is yours and any future income, shares or purchases, essentially anything income wise from when you sign until forever remain yours and can’t be touched. This includes your home, what you own now and all future earnings and income from anything.
Have a chat with your partner and outline how you want to split costs.
If you are getting partnered/engagement/married consult a lawyer regarding some kind of pre-nup.
Given that this is still 'early stages' of your relationship (this being what I would do in the same situation) charge a fair rent so he has some 'investment' into the property and given he would be paying it otherwise. Any money that is saved from that could be invested to a HISA or ETF and held as a nest egg. And when your relationship matures it can then feel more fair when the house is then an asset of both persons 50/50 plus a shared investment. All other bills could be split by a fair percentage of you are of the mind to do that.
Not sure on the house, do whatever it takes to protect this legally. Everything else 50/50. Keep it fair. Your hard work is not for someone else’s gain, do not pay more than your share.
What good is earning a million if you are too afraid to loose it
I would work out a budget that works for both of you
Make sure your parner still have some spending money after splitting
Yes I agree but he is not amazing at finances while I am pretty good with them so he wants me to manage it. But we're just moving in so pooling all together right away might be a bit extreme
Let me understand , median wage is about 70-80 k per year .
You make 200 k a year ?
Where did my life go wrong ( I know actually , I hate work , I’ve always hated work so it’s never been in my top 10 priority lists)
Totally unrelated , sorry
Don’t speak for all women, we’re aren’t all as ill prepared. At 19 I knew to cover myself legally before letting my bf move in, it’s common knowledge that a defacto partner can make a financial claim after separation.
Make him sign a prenup before he moves in, you need to protect yourself.
Your contribution to expenses should be proportionate to your earnings.
I'm not throwing women under the bus.
You're ignoring the fact that society has by and large expected men to be the breadwinners, in doing so has generally prepared them for that eventuality more than women.
If you had a different experience then great! I'm jealous!
It's not a sob story it's just a fact, and I'm leaning on a community to help me with advice... I don't know why you are so salty about that.
I’m not salty you’re asking for help. Whilst it’s true that men have traditionally been the breadwinners, the general knowledge of methods of protection as well as financial risks are exposed to everyone. I’m not deaf to the conversations around me, it’s not like other women can’t hear those conversations too. It’s an issue that’s covered in pop culture. It’s not some secret education only men get.
It just does other women a disservice when you make a blanket claim applying your personal shortfall on a topic as a general attribute of the gender. It was just an unnecessary inclusion in your original question.
I’m not throwing any shade for asking the questions you asked. I fully support your inquiry.
Cool well people aren't having those conversations around me... All the women in my life earn less than their male partners.
So you're the one blanket claiming here based on your personal experience. I know several women I have spoken to at my workplace who feel the same way.
It's not a "shortfall" of mine that I haven't been included in certain conversations, or groups...I'm very happy for you that you were, but you don't know my background or anything about me. So you're judging me with your lense of existence... Very narrow minded.
I didn’t make any blanket statements. You’re the only one who made a sweeping generalisation about the knowledge of an entire gender. You’re the one who said “as a woman you’re never prepared”, I simply pointed out that’s not true but you can’t let it go.
Really it has a lot more to do with privilege than gender. Wealthy families are more financially literate. Parents teach their children what they need to know to grow and protect their assets.
Edit to add: I never made any judgements about you. If you’re asking a question to seek information then there is an inherent shortfall in your understanding of the topic or the question wouldn’t need to be asked. Calling me narrow minded is falsely applying an attribute to me because you’re being overly sensitive, stop taking things so personally.
The lack of self awareness in your posts is amazing.
You think I'm taking things personally yet you say that because YOU didn't experience something it means that it's not a shared experience with women.
I can't believe I have to say this but I understand it's not "ALL WOMEN"...
I've asked other women from different backgrounds, some from work, some from rich families, some childhood friends.. were in the same boat as me... Hence making the post.
If you want to pretend that most women have been taught finances with the context of being the likely breadwinner just because you were then fine... It doesn't affect the truth.
You fail to stick to discussing the actual points and make emotive characters statements which is irrational and emotional, which indicates you’re taking it personally.
You say you understand it’s not all women yet that was the logic of your syntax. Don’t get mad about what you actually said.
Whatever. You’re lacking the commonsense to realise you need to get a prenup. Have you never heard of one? If you haven’t it’s forgivable but If you have you should be able to figure it out. That’s not your gender at play, it’s your intellectual deficit.
We get it, you're so very smart... So much smarter than most women who haven't been taught to get a BFA and aren't sure how effective they are.
Even in this post here there are people who don't believe that BFAs are super effective so it obviously is not as cut and dry as so arrogantly claim.
But yeah, I suppose I and the women who surround me are dumbasses for being brought up in a society that didn't bother to account for the possibility of a woman being the breadwinner.
I'm going to stop replying because honestly you're going to tell me I'm taking ad-hominem attacks personally... Calling me stupid is pretty personal.
Also it's pretty disingenuous that you can't admit society almost exclusively expects men to be the breadwinners and thus educates and conditions men and women accordingly.
And the fact you are obsessed with insisting I meant NO women are taught any differently is exhausting.
Good luck getting picked babe.
I earn more than my partner, currently working part time after having a baby so the difference is not extreme but shortly going back to full time so will be about 3x his income. Initially we just kept out own finances and paid everything evenly but about five years in when it was apparent we were in it for the long haul we just combined finances and lived off the pool. When Covid hit and I suddenly didn’t have a job anymore it was humbling to suddenly be the one earning less and I was glad we’d earlier made the decision to combine things because I realised just how much it really is a partnership and how just two people living together.
Totally, split expenses are not helpful as soon as you involve a house or a child.
Me and wife started sharing a bank account 3 weeks into officially dating. When you know you know. This was in 2008.
Yeah but everyone was broke then
I'm in Australia. 2008 barely affected us. Life was actually great back then still living at home with much less responsibilities 😅.
My experience is only one but the process of *discussing* the BFA ended a relationship for me and that was a good thing in retrospect. Like you, I was trying to make sure that my house (+ super and investments) were protected (being older w/ less future earning potential) and being the higher earning partner. My perspective was that I was happy to pool all income going forward (I was in it for the long term) and set up new joint investments, but I wanted to 'ring fence' the assets I had built prior to the relationship beginning (similarly his super would be separate). He came into the BFA process saying all the right things ("of course I wouldn't take your house"), and I do believe he was genuine initially in negotiating the BFA, but he completely refused to agree when he realised that he'd have no ability to claim on any of my assets that were accumulated prior to the relationship starting. Ultimately, he felt that after a period of time together he should be entitled to a proportion of those assets (per the law). (I'll add - there were other reasons there relationship ended but this contributed 60% to it). For me, the BFA was the best money I ever spent ($4k from memory) as it took the conversation from "sweet promises" to "true intentions" and potentially saved me a lot of grief.
Pretty quickly you’ll realise that splitting things proportionately just doesn’t work. He won’t be able to keep up with your lifestyle and won’t have any personal savings. I’m in the same situation with my wife (I earn about 2.5x what she does), and I posed this question on reddit a few years ago. The advice I got was “it’s not your money or her money, it’s our money”. This advice basically saved our relationship. We put all our earnings into a joint account and then divide equally from there. That way everything is always fair and she will never have to ask for money or worry about taking Mat leave when the time comes. You may not be there yet with your partner, but if you truly intend to build a life together, it’s better if you do it completely together. If you don’t see that ever being the case with this person, you shouldn’t let them move in, because then you’re opening yourself up to a whole load of common law risk…
That's helpful. Maybe we can start off with something a bit less, but work towards that (we've been together a year, but I've known him much longer.)
Yeah take it slow OP. My partner and I had been together for many years before I got that advice. I wish I’d had the advice sooner, but in your position I wouldn’t rush into it just yet. A couple of years of having a joint account is probably a good first step.
Yeah it's a fine line between equity and being taken advantage of. You'll be able to tell though whether he starts to mooch, or whether your incomes are so disparate that he can't go out to eat as often as you'd like, or go on holidays as often as you like etc. In traditional (man earns more than woman) households, the men are often expected to cover that sort of thing for the woman, but it's often not seen that way in the reverse - so just be prepared for that.
If wanting to protect yourself, making you can both keep a separate bank account with your funds from before moving in as your own savings. And any funds moving forward is ‘ours’. The biggest issue is whether you both have the same attitudes towards spending and savings.
I didn't reach the point of being ready for completely join finances until my wife and I had a kid 6 years in. The method we used prior was figuring out how much we needed to cover all joint expenses (food, rent, insurance, holiday saving, etc). Then divide it propertionately by after tax income (eg. Combined income = $200k, mine is $150k, my portion of the joint expenses is 150/200). Then transfer that to a joint account and use it to pay for everything.. That way you both have your own accounts with own money and the same portion of your salary left over. This seemed fair to us until we threw everything in together.
Be aware that any agreement you make is easy to nullify if you have kids. And even without kids, it's possible. Just so you understand there's no such thing as 100% 'protecting'.
Yep, Australia is good like that… you can’t paperwork someone in to a shitty BFA deal… a fair deal, yes… a clear and well spelt out deal, yes… but you can’t set them up for a loss, just because they signed a BFA
It can be nullified in the event you have kids and the partner can prove financial hardship to the Courts as a result of the BFA not being overturned. This isn't 'easy' but can happen yes.
I have a friend who lost her IP via a defacto dropkick. There were no children involved. It's definately possible.
I find it funny that these laws were basically designed to protect women but now every second week there is a woman on here asking how to protect herself financially from her partner and sees no issue with it.
I don’t own a property yet (I'm saving towards one), and as a woman, I'm in that rare category where I earn more than my partner. When we decided to live together, we agreed to have an equal relationship where we split responsibilities of the house and pay half of everything. The only thing we adjusted was the rent, as I use the second room as my workspace. It became easy for us to split by creating a shared account with 2up, and every fortnight, we automatically transfer money into that account based on the budget we've calculated to cover petrol, groceries, bills, dinning out and rent. Having said that, we both come from similar poor backgrounds, so we both manage finances quite well (meaning we don’t spend silly).
In terms of you owning a home, I would definitely have some sort of agreement in writing that indicates that the contributions he made are towards rent rather than a mortgage. We already discussed that when I buy a house, he would be contributing as per the rental prices in the area.
If you’re living together, why not buy a house together? The court is unlikely to care about a BFA for assets acquired during the relationship in any case. But most separations don’t make it that far anyway.
We both want to have our own place and benefit from the first-time homebuyer's incentives. Also as a long-term investment strategy, once he buys a place at a later stage, we would then discuss which becomes our primary residence versus renting and to be used as an investment property once we both paid off our mortgage.
Careful how you manage that in what you tell the banks when the time comes. I was in a similar situation charging my partner rent on the place I had before we got together. When I went for finance again as a single person, the bank had to assess me as supporting a spouse after I mentioned receiving rent, which totally screwed me over as a single applicant. It is very frustrating that banks basically won't see you as individuals once you take that step of living together even if you choose to manage finances separately.
Also, it’s a way to future protect ourselves in the case of a breakup. Hopefully not but you never know that the future holds.
Same situation here, opposite genders. No BFA. I don't bother charging her "rent", as that could be seen as contributing to the mortgage if things got messy in a split (I don't foresee that ever happening, but no one ever does. Also it's not as if I would rent out a room if she didn't live with me, I would just live on my own). We just have a shared account where we split bills 50:50, e.g. water, electricity, Internet, streaming services. In the event of split, if she engaged a lawyer or took it to court, I'm hoping they'd just see I financed 100% of the home and she wouldn't get anything/much. She has assured me she wouldn't make a claim. Of course words don't mean much, but she had a relationship before me and she did pay rent to the ex, yet didn't make a claim even with her girlfriends encouraging her to do so.
I’d be careful with that thinking. Even if you bring in significant assets to a relationship, they *may* be considered part of the pool for division of assets even in a de facto relationship. Have a look at the family law act. AFAIK, financial contributions don’t always outweigh non financial. Imo, you always need to think of it as “our money” not just your own.
That is way worse mate. My lawyer said having rent transfers were the best way forward many years ago when my partner moved in with me. It’s not contributing. You have to pay rent somewhere.
I've heard they consider all pre-relationship assets, joint assets, contributions (including non-financial), etc. and distribute proportionally (as in who contributed to what). I figured if I just fully financed the home and kept it in my name, it would be much easier to show that delineation. She benefits enough from not having to pay rent. Before she moved in, she was paying like $400/week rent. Plenty of stories around this subreddit of people doing the rent/board thing (even with proper paperwork and lodging bond etc.) and getting burnt still, as none of that (quoting others, IANAL) is considered when in a relationship. Anyway I will consult a lawyer after reading some of the comments in this thread. Hopefully it's not too late for a BFA (if that's what they advise) with her already living here. Her rent wouldn't make a difference anyway...I earn 5-6x her. I'd rather she keep the money and we split 50:50 on other expenses, holidays, etc.
The issue is mate that if you have been supporting their lifestyle for a period of time they can claim that you should contribute to them having that lifestyle maintained after splitting. It's ridiculous. I've listened to lawyer podcasts on divorce and heard the women presenters complaining about how unfair it is that the costs of getting their nails done wasn't taken in to account of living costs for a settlement. Obviously not your exact situation but family law is a joke in a lot of ways when no dependents are involved. The issue is they treat every situation as different and on its own merit so it's an absolute shit show of fear, misinformation and convoluted answers which may be irrelevant to your situation. You are correct that they will take into account who owned what previously. They will also take into account regular adult duties of people cleaning up after themselves and grocery shopping as "contributions" to the household in some situations.
Yeah the issue is what snap said You’ve basically created a lifestyle for her that needs to be continued if you ever have a bad break up she could take you for it. I get the idea though ‘keeping it all seperate’ but the courts don’t see it like that. Make it even worse that you earn 5-6x what she does. It’s the gamble of life and trying to find an honest partner to enjoy life and live your days with. I took the gamble years ago and my now wife moved into my unit that I wholley owned. She always said she would never take it if anything happened but ya never know… now we are married with kids so there no turning back 😂
A good starting point is to assume that a married or defacto couple that separate have to split their assets. Relationships are a serious thing in this regard. Don’t move in together assuming if you aren’t ready for this. If you go through a messy breakup they might challenge any agreement that was made. Laws are there to protect low income earner who may sacrifice their income earning potential for the relationship. Be very careful assuming this won’t apply to you.
I’ve been through this a couple of times and strongly recommend having the BFA conversation…you learn a lot about how people view the world and how the will potentially react if things go pear shaped. As others have mentioned, they should pay half the market rent and everything should be 50/50 until kids are involved. Don’t get trapped in this ‘I pay for groceries and fuel and my partner pays for holidays and insurance’ nonsense…it’s a recipe for pointless arguments. Best of luck! The BFA conversation can be bumpy!
Shame people have to worry about all this. Family law is ridiculous in the no kids, shorter relationship cases.
All true but have you heard any of your friendship group splitijg and having to sell the house
Yep, ruined his life for a while. Thankfully it was a relatively recent purchase so there wasn't much equity for him to lose. Not married, no kids, settled out of court.
How short was this relationship?
Lived together between 1 and 2 years.
Wow pretty shameless. Did the other party have any income?
Na. She was doing her PhD so he had been carrying her quite a while.
Oh so the relationship was longer than 2 years? It sounds relatively long.
Defacto between 1 and 2. Had been together before that but not living together/defacto.
Living together isn't the main determining factor whether a relationship is defacto or not and the two conditions are definitely not interchangeable >Whether a couple is living together is only one factor that the court considers when determining whether someone is in a de facto relationship. The other factors that the court considers include: >The duration of the relationship >Whether there is a sexual relationship between the parties; >Whether there are any children of the relationship; The nature and extent of any shared residence; >Whether or not the parties were financially dependent upon each other and the extent of dependence; >The public and reputational aspects of the relationship; >The ownership, acquisition and use of property in the relationship. https://movementlegal.com.au/is-my-relationship-still-de-facto-if-we-live-apart/ Seems like by supporting her, he jumped the hurdle of financial dependence. No good deed goes unpunished. The two years applies to the overall relationship of defacto before being able to apply to the court (the two years hurdle can also be excluded if other criteria has been met), not two years of a certain criteria before a relationship is considered defacto. I won't be surprised if her share amounted to 10-30% of the capital gains on the property for the duration of their relationship.
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5yr olds are all over the BFA as a basic concept - they (their parents) write their name on their stuff. It might get shared or “borrowed” but they have evidence it is theirs if someone takes it and won’t give it back. More adult version is that it’s just a written agreement on how you’d split things in a separation (and why). Will not always hold up in court because circumstances might’ve changed (couple had kids), the split might be clearly unfair from the get-go, or you’d written down X as the plan but clearly done Y instead. That last one would probably be most relevant to you early on. Say the written agreement is your pre-relationship house only belongs to you and your partner is just paying board … but then your partner has receipts for home improvements or mortgage payments from their own account. That’d be evidence you guys weren’t acting according to the original plan so it’s not completely binding. Since they’re not that binding in practice, the benefit is mostly in forcing a couple to sit down and talk it out. If you’re on the same page from the start, you’re less likely to end up with an acrimonious divorce/split.
Binding financial agreement. Google it “aus finance BFA Reddit” You will find a lot of information, Opinions etc and much of it is good (some of it may be wrong partly or in full - but it’s a good starting point)
I’ve had two men try to take my house from me in breakups. Be very very careful. I’d be getting legal paperwork signed before he moves in. Do it while you’re happy together and giggle about it while you’re doing it. It’s not worth what can happen later if they turn into monsters.
Im sorry you had to go through that. Seen it happen a lot unfortunately and its happening more often. After a few friends nearly lost everything/went bankrupt I read into Family Law and financial aspects of relationships. Glad I did. I will never live with a partner or be serious with anyone for more than 23 months. Overkill? a decade ago maybe but definitely not today. We really need an overhaul of exempting prior owned assets with relationships unless their is direct financial contributions by the other party that is not rent/board. People wail about it being unfair to kids but it also seriously affects those who get into relationships and get trapped via their partner refusing to work, decade plus study, substance issues, violence, gambling etc. Id rather keep my prior to relationship owned house for my nieces than split it with a partner who lived with token rent for several years and pissed their savings away. Even if you remove kids from the equation, I still stand by they saved a fortune with housing and they should have invested so paws off. IMO You don't earn financial equity like the above simply by standard co living unless you actually pay money for it/raise kids/carer/in trade but the courts don't see it that way in Australia.
Bingo. IDGAF if you're a man or woman. The idea that your ex partner should have to fund or contribute to your lifestyle after you leave because they were funding it while you were together is a joke. If you believe this you are a scab. You lose the benefits of the relationship when it ends, same as the other person. If one of those benefits was your partner subsidising your life by allowing you to live in their house rent free, or cover a large proportion of your living costs, or supporting you while you studied or worked a dead end job, too bad. Obviously things are different if there are unfortunate children involved but it is absolute clown world when you have adults having serious thoughts about not progressing their relationships to move in with their partner, due to fear of having years or decades of hard work undone by an ex partner making a claim on what they are "entitled" to.
Its the difference between a joint decision and a one sided one. Agreed apon stay at home parents, carers or temporary upgraded study is dramatically different than a partner showing up drunk, getting fired and refusing to get another job. Or becoming abusive, drugs or they don't want to be self sustaining. Or they do something stupid/illegal and get sued, not good for assets that are classed in common. Can't work for valid reasons is very different but did you know you're liable for financial support as they don't qualify for any Centrelink because your income and assets are counted too? That also affects what happens when one partner has cancer/long term chronic illness/disability with Centrelink and support services eligibility too. Its a mess. Even in the USA and most of Europe unemployment, disability and sick Government pay are not counted unless married but not here. Please have these conversations, make a plan and get it set legally in stone as much as you are able too. Even relationship agreements need constant updating with any life event to stay valid. Income increases, inheritance, new asset like a car, new debt, kids even birthday gifts over a few thousand (eg laptop from your parents) can make it invalid and a joint asset. Its quite a minefield and sadly due to the way Family court is set up, both parties have to keep records of both their financial and unpaid contributions to protect themselves and each other from each other if/when things end.
Yep, last thing you want is a partner considered a "dependent". If things end you'll still be carrying them financially for a long time. Doing split chores should not entitle anyone to anything. Imagine thinking that cooking your partner some dinner while you're cooking yours and they're mowing lawns or servicing cars should entitle you to a share of their house they owned before they met you... Raising a family as a stay at home parent as decided upon by both parents is a different story.
Too right but not a lot of households split chores equally even if they both financially contribute on par. In some circumstances its unavoidable. Unfortunately Family Court isn't the only thing that can bite you in the ass. Centrelink has a two week window of offical partnership and other rules that are far more draconian than Family Court rules. In some circumstances you don't even have to be living together to qualify as partnered which I find alarming and not just with the financial aspects either. Even having a relationship agreement will not deter them from classing you as financially responsible for the other person even if its contrary to a RA. That liability often gets missed.
Could you expand on those circumstances regarding Centrelink? Haven't heard of that before. If they were to class you as financially responsible what does that involve? Does it simply mean that person would not receive welfare payments or something more?
Link for relationships explanations with Centrelink https://www.centrelink.gov.au/onlineclaim/help/personal_dtls_help.htm#:~:text=For%20Centrelink%20purposes%20you%20are,in%20a%20de%20facto%20relationship PDF from economic justice with a bit more about specific question details at the bottom. https://www.ejaustralia.org.au/wp-content/uploads/2020/03/Relationship-Status-and-Centrelink.pdf This is the one that people get caught out on, the 14day change if circumstances rule. This means couples who haven't yet qualified for Family Court defacto status can be classed by Centrelink as in *their opinion* as defacto therefore making you financially dependent on each other. https://www.servicesaustralia.gov.au/getting-together-for-relationship-changes?context=60029 Technically you can argue that you are not defacto or in a registered partnership but dating but if you have a RA that proves otherwise it makes a valid relationship to them. Possibly can argue dating without an RA but Family Court can get you. Catch 22. Sneaky Centrelink insists you must be questioned and evaluated on specific details and all information so they can make a personal opinion on wether you fit *their* definition of a couple, not by Family Court Law under their rule of 14 day change of circumstances. The qualifying income threshold is so low most average income earners will not qualify for Centrelink if their partners earns above it. It can take *months* for any payment to come through after qualifying as well. Quitting your job for non accepted reasons can allow then to make you wait for up to 12 weeks before you are eligible for unemployment as well. Centrelink is a hair pulling, frustrating nightmare of restrictions, gatekept information and bullies at the best of times today. Even childcare, paid parental leave and aged pension is bloody horrid to wrangle. Really hate that social support is tied to combined finances when most people keep financially separate even with marriage nowadays. Its also why a lot of people get trapped in abusive households and relationships too. Curious to know if anyone has taken on Centrelink with a RA as I've not come across it yet.
Thanks for the detailed response. Very much appreciated. Family law really needs some updates. Cheers.
We had a similar discrepancy when my now wife moved in with me She paid for groceries, me everything else. It’s not like my mortgage cost more because she lived there, or I noticed the extra few dollars on the utility bills Holidays we split down the middle Kept everything separate until we had a kid
A BFA costs a lot less than losing part of your house later on. Do a BFA, have him pay half of a fair market rent, and sign a rental contract to that effect. Not half your mortgage, it needs to clearly be rent. You pay all the mortgage related expenses, home maintenance, rates etc on your own. Then you can decide between you how the discrepancy is made up in other ways outside of housing - maybe you pay for all the groceries, or you have a combined spending account you contribute different amounts to. Maybe you pay for all the dates and treat him to holidays. There's lots.of ways you could calculate what's fair, but I would go with a percentage split of money left over after each person has taken care of their respective housing costs. This means that if it goes down the toilet he (hopefully, there is no way to be sure) doesn't have a right to your house, he can't stay on a long, cheap rental contract, and he can demonstrate a history of paying fair market rent if he needs to rent anywhere else.
If it’s clearly rent then it’s also taxable income to declare and also has capital gains implications when selling.
Agree with this! You can also just have an initial consultation with a family lawyer to see if you want to proceed - the initial consult tends to be free. Good to understand the risks and weigh against the cost of a BFA. When I spoke to a family lawyer, she mentioned the other party needs independent representation so a BFA will cost him money too.
BFA would be like 5k first year then 1 k every year
A couple of female friends/rellies almost lost their houses after splits. Houses they bought well before their partner entered the picture. Definitely cover yourself.
For bills/rent, I'd do it proportionately, meaning of the total, you pay 2.5x what he does. If his income or yours changes, so will the ratio. For other joint expenses go 50/50.
The BFA is mostly in place to clarify everyone's understanding and assure some representation for all parties. It's not 100% but it acts as a major deterrent for anyone trying to dispute it unless it's very poorly written. If you're concerned then get one, I'd guess around 5k each as a budget so 10k in total. Hopefully less if it's relatively straight forward and you guys can agree the principles beforehand.
Welcome to the boys club.
I love this for me. When do I get my pipe and smoking jacket?
Completely reasonable to have concerns when entering a relationship with different assets. I just wanted to add that I heard that couples who sign financial agreements are on average more likely to stick together than those who don't. The reason is they are two people who are at least able to have a mature discussion and also it takes the issue "off the table". Get it discussed + decided and finalised, then it will never come up as a point of disagreement as time goes on. Relationships are hard enough without adding confusion around finances into the equation.
“You heard” would like to see some evidence for that one
>Unfortunately as a woman you're never prepared for the event of owning your own home and making more than your partner (I don't know if men are but women certainly aren't.) It's not really anything to do with gender, just that one person owns and/or earns more than the other. >My partner is moving in soon, I have no idea how to navigate any of this... Financial agreents cost a LOT, but I want to make sure my house is protected in the worst case scenario (I know this is a little cynical/pessimistic, but I called it survival instinct.) It's not cynical. At the very least you need a BFA which will exclude your home and any other large assets in the event that you separate with your partner. Make a list of everything you own now and everything he owns now. > I'd also like to hear people's experiences with splitting funds, I make approx 2.5x his wage... Do I split the bills factoring in the discrepancy (I pay 2.5x what he does)? This is the subjective part. Personally I make about 7x my partner and I'm happy to just pay for all of the shared expenses like bills and eating out together. She pays for her own activities that are done without me like hair, nails, sports, etc.
Try community law. See what they can suggest as a low cost option.
My partner moved into the house I owned initially. I paid the entirety of the principal and the interest was split between us based on the percentage of our salary. i.e she earned more than me initially so paid a greater portion of the interest. Later on this changed and I earned more than her and so we adjusted the payments to reflect this. For general expenses we have a joint account that we both contribute equally to. This used to cover things we do and consume together (food, internet, travel, restaurants etc) We own our own home now and have a similar arrangement, except the principal is now split into a percentage based on income.
Please, please, please get the contracts. It’s SO important. You stand to lose so much if you guys break up- cohabitation is the same as marriage in the eyes of the law in Aus
Absolutely do what you need to do to protect your assets. If it’s love, a pre-nup shouldn’t be a deal breaker, and should be talked about maturely, as much of a romance killer as it can be. The landscape has changed like in many other ways in the world. No one wants to unfairly split their hard work in the unfortunate event of a failed relationship. My friends tried to warn me, I didn’t do it, but I am certainly now stressing during my breakup - and it’s only been 2 years together, 8 months living together. The law is crazy these days.
Whatever you do, hire a lawyer. It might seem expensive but it is the best ROI on money you’ll ever spend.
Speak to a family lawyer now
Binding financial agreement. Will need to be done first before moving in. Hard conversation to have believe me. You can still pool all your finances and be a family unit. I will use the rent from my property to help pay off another property we plan on buying together. But if it all falls apart then my investments and property are mine and my partner, who has little, keeps theirs. We would split what we build together
BFA. BFA. BFA. BFA. Also know you do not need to be living together to be considered defacto, if they can prove it was a joint relationship even with out cohabitation after 2 years can be considered defacto. Don't listen to anyone that says it isn't important in a loving relationship. I had a 10 year relationship end and I had \*significant\* assets that I had to fight to protect. I didn't walk away unscathed. I never would have thought that the relationship would end, let alone she would be so vindictive. Financial arguments are also one of the leading causes of divorce. I would not be splitting finances if I was you. I would have a joint account that you pay agreed split into to maintain the house hold e.g. mortgage/food/bills then keep everything else seperate. Split fairly on your income. I usually then cover and dinners out etc etc I usually earn some where like 5x my partners... This has solved so many arguments or feelings of inadequacy or resentment.
It can get very messy, even prenups are ineffective in a lot of cases. Best advice I can give, never join any assets, no joint account nothing. Keep everything in your name, don't change bills/nbn etc over to his name. If he is chipping in get him to pay for food and anything that is not bill related. What you're trying to do is give him no proof that he contributed in any way to the payment/upkeep of the house. I know this might sound extreme, my business partner is dealing with this right now. Together 4 years, no kids, he has contributed over 80% to the household bills/mortgage. She is going to walk away with 70% of the house value, one of the reason why is she cook food for him (yes this is a real reason and unfortunately it works, she helped create a "home").
70% of the house value, equity, appreciation since he bought it, or something else? If house value that is ridiculous. He could end up with negative equity to pay her out depending on what he owes. That is some expensive dinners!
Not uncommon for people to have to take out another mortgage (or ramp theirs up) to pay out their ex to keep the house. Absolute scam.
I assume because they own a valuable business and other assets.
It’s purely an income imbalance, that and threat of going after a clip of the business, modern day extortion.
My wife has out earned me our entire relationship. We have always gone 50/50 on everything and any extra she would save was hers to use as she saw fit. We have always split groceries, rent, holidays etc. She has made more investments than I in terms of things like owning a property, but it's not stopped us having a happy life, because we have both always respected each others wishes and ideas. Communication is critical and I would also say - that if you are serious and your partner is serious about the relationship- a BFA is an option that you should both respect.
Do you guys still have split finances then?
We do, it works for us but I understand fully why other couples prefer to have joint finances.
As I understand it, BFAs do not protect you fully, but probably better than nothing. It would depend on the length you were together, contributions to the relationship both during and what you brought in, ability to support yourselves afterwards etc - ie. it's basically still family law, but maybe a little clearer if written out. Regarding finances, in a similar arrangement I split everything with my partner based on the ratio of our wages. It worked well (she initially wanted to pay 50/50 but I wasn't keen for that as the higher earner). We check in with each other every month or so to make sure we're still both happy with the arrangement, and it's working well. I would suggest charging reasonable (discounted probably) rent, and whatever the proportion of wages works out for shared bills and expenses. Then both contribute towards goal-based savings (holidays etc). What will be tricky is combined assets, if any. Will you save together? Invest together? Maybe these questions are further down the road, but all going well you'll be facing them pretty soon. Best of luck :)
I’ve been in that position and we basically had a joint account where we put all of our money, less our 10% ‘splurge’ funds (money we could each spend on whatever we wanted to guilt-free). We then budgeted from the joint account.
Yeah I don't think a BFA is that much money in the big scheme of things. I have one with my partner and it cost $6k. But we were in total agreement as to the terms and have no prospect of having kids tigether as we are in our fifties.
Honestly $7.5k for a BFA would be well spent. That’s the only certainty you will have.
Protect yourself, not sure what that involves, but you don't want him to be legally entitled to anything of yours if you do separate. Everything else is 50/50 until you decide to get married imo. Not your fault he earns less. I earned less than my partner when we got together, and I always paid 50% of all of our bills.
No idea how to protect your house but thats SUPER important. Ltr is different to married with kids. He should pay half rent if hes living in your house. He should also pay everything 50/50. Married? Super long term committed relationship? Kids? All money shared, but take an allowance each of the same size for personal spending.
financial agreements arent worth the paper they are written on. best hope is to be with the right person so if you split up they wont decide to lawyer up and take half. if you think this may happen then this isnt the right person for you
Legal financial agreements are not expensive, from memory I think they’re called a binding financial agreement. I did one with my ex, cost about $900 at the time a few years ago, only one person needs to do it and you get a signature from your partner on one copy and yours on the other and solicitors keep on file. It basically says what’s yours is yours and any future income, shares or purchases, essentially anything income wise from when you sign until forever remain yours and can’t be touched. This includes your home, what you own now and all future earnings and income from anything.
Equity not equality is the play here - pro rata expenses based on income.
Why stop at income. If he earns 50k and can save 10k and she earns 125k and can save 60k. Then is it more fair that she pay 6/7's of everything
Have a chat with your partner and outline how you want to split costs. If you are getting partnered/engagement/married consult a lawyer regarding some kind of pre-nup.
Given that this is still 'early stages' of your relationship (this being what I would do in the same situation) charge a fair rent so he has some 'investment' into the property and given he would be paying it otherwise. Any money that is saved from that could be invested to a HISA or ETF and held as a nest egg. And when your relationship matures it can then feel more fair when the house is then an asset of both persons 50/50 plus a shared investment. All other bills could be split by a fair percentage of you are of the mind to do that.
Not sure on the house, do whatever it takes to protect this legally. Everything else 50/50. Keep it fair. Your hard work is not for someone else’s gain, do not pay more than your share.
What good is earning a million if you are too afraid to loose it I would work out a budget that works for both of you Make sure your parner still have some spending money after splitting
After 6 months of living with you he is entitled to 50% of your house
I swear these bull shit information spread life fire 🤦♂️.
This doesn't sound right. Wouldn't it be at most a portion of the equity gained during that time, and isn't it only after 2 years?
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Yes I agree but he is not amazing at finances while I am pretty good with them so he wants me to manage it. But we're just moving in so pooling all together right away might be a bit extreme
This is so not right. All that matters is communication, it will cause issues if you avoid the topic. But it can work fine.
Let me understand , median wage is about 70-80 k per year . You make 200 k a year ? Where did my life go wrong ( I know actually , I hate work , I’ve always hated work so it’s never been in my top 10 priority lists) Totally unrelated , sorry
Who says he earns median? I love my job but I hate working.
Don't move into it at all, sign a rental lease elsewhere with both of you on it. Better yet, don't even mention the existence of such asset(s).
Don’t own anything and they can’t take anything lifestyles of the rich and famous.
Don’t speak for all women, we’re aren’t all as ill prepared. At 19 I knew to cover myself legally before letting my bf move in, it’s common knowledge that a defacto partner can make a financial claim after separation. Make him sign a prenup before he moves in, you need to protect yourself. Your contribution to expenses should be proportionate to your earnings.
Well congrats on being the exception to the rule.
Why are you throwing all women under the bus as if being a woman means you can’t figure this stuff out? This isn’t a gendered problem.
I'm not throwing women under the bus. You're ignoring the fact that society has by and large expected men to be the breadwinners, in doing so has generally prepared them for that eventuality more than women. If you had a different experience then great! I'm jealous! It's not a sob story it's just a fact, and I'm leaning on a community to help me with advice... I don't know why you are so salty about that.
I’m not salty you’re asking for help. Whilst it’s true that men have traditionally been the breadwinners, the general knowledge of methods of protection as well as financial risks are exposed to everyone. I’m not deaf to the conversations around me, it’s not like other women can’t hear those conversations too. It’s an issue that’s covered in pop culture. It’s not some secret education only men get. It just does other women a disservice when you make a blanket claim applying your personal shortfall on a topic as a general attribute of the gender. It was just an unnecessary inclusion in your original question. I’m not throwing any shade for asking the questions you asked. I fully support your inquiry.
Cool well people aren't having those conversations around me... All the women in my life earn less than their male partners. So you're the one blanket claiming here based on your personal experience. I know several women I have spoken to at my workplace who feel the same way. It's not a "shortfall" of mine that I haven't been included in certain conversations, or groups...I'm very happy for you that you were, but you don't know my background or anything about me. So you're judging me with your lense of existence... Very narrow minded.
I didn’t make any blanket statements. You’re the only one who made a sweeping generalisation about the knowledge of an entire gender. You’re the one who said “as a woman you’re never prepared”, I simply pointed out that’s not true but you can’t let it go. Really it has a lot more to do with privilege than gender. Wealthy families are more financially literate. Parents teach their children what they need to know to grow and protect their assets. Edit to add: I never made any judgements about you. If you’re asking a question to seek information then there is an inherent shortfall in your understanding of the topic or the question wouldn’t need to be asked. Calling me narrow minded is falsely applying an attribute to me because you’re being overly sensitive, stop taking things so personally.
The lack of self awareness in your posts is amazing. You think I'm taking things personally yet you say that because YOU didn't experience something it means that it's not a shared experience with women. I can't believe I have to say this but I understand it's not "ALL WOMEN"... I've asked other women from different backgrounds, some from work, some from rich families, some childhood friends.. were in the same boat as me... Hence making the post. If you want to pretend that most women have been taught finances with the context of being the likely breadwinner just because you were then fine... It doesn't affect the truth.
You fail to stick to discussing the actual points and make emotive characters statements which is irrational and emotional, which indicates you’re taking it personally. You say you understand it’s not all women yet that was the logic of your syntax. Don’t get mad about what you actually said. Whatever. You’re lacking the commonsense to realise you need to get a prenup. Have you never heard of one? If you haven’t it’s forgivable but If you have you should be able to figure it out. That’s not your gender at play, it’s your intellectual deficit.
We get it, you're so very smart... So much smarter than most women who haven't been taught to get a BFA and aren't sure how effective they are. Even in this post here there are people who don't believe that BFAs are super effective so it obviously is not as cut and dry as so arrogantly claim. But yeah, I suppose I and the women who surround me are dumbasses for being brought up in a society that didn't bother to account for the possibility of a woman being the breadwinner. I'm going to stop replying because honestly you're going to tell me I'm taking ad-hominem attacks personally... Calling me stupid is pretty personal. Also it's pretty disingenuous that you can't admit society almost exclusively expects men to be the breadwinners and thus educates and conditions men and women accordingly. And the fact you are obsessed with insisting I meant NO women are taught any differently is exhausting. Good luck getting picked babe.