Finances in a relationship don’t have to be complicated, just early on find a fair and optimal financial balance which can withstand any situation (similar to our money tree).
The following setup should be applicable to most situations:
At some date (“starting date”), you decide together to implement this plan.Both individuals privately keep whatever savings/assets they have before the starting date.
Both individuals privately keep whatever savings/assets they have before the starting date.
As of that moment, 100% of all (new) income is transferred to a mutual bank account. This includes any (holiday) bonuses etc.
10% (at least) of the total income is monthly invested for the family future (retirement).
20% (for example) of the total income is split and transferred from the mutual account to the private account of both individuals.
The remaining 70% is for mutual expenses, including housing, groceries, family holidays, car(s), insurances, etcetera.
The 10% “private income” can be spend however that person wishes, it is their money. Examples are dinner or drinks with friends, mobile phone, clothing, hobbies, sports, etcetera.
If there are pre-existing debts, they become a mutual burden to be repaid from the mutual account. New debts (which are not mutual), stay private.
In case someone has significantly more private money to start, the person can choose to use that for mutual benefits to finance e.g. a car or house. The “loan” (at 0% interest) is repaid over time from the mutual account. 1/10th is gifted yearly though if it has not been repaid (so after 10 years, the loan is considered waived regardless of how much was repaid from the mutual account).
Any mutual money not spend goes to a joined savings account.
6-months worth of expenses is set aside in a mutual savings account as emergency cash fund.
Money is set aside monthly on a mutual account for planned incidental expenses such as housing maintenance, car repairs/replacement, etcetera.
In case of a breakup, the mutual bank account, invested funds, and assets related to that money are split 50%/50%. Any private money remains private.
If someone gets an inheritance, it is not considered mutual income and goes to the private account of that person.
If there is an unequal pension buildup, at breakup the difference of buildup during the relationship is split (and paid out assuming the highest tax bracket).
If someone has to make a career sacrifice (e.g. to spend more time with the kids), you can skew the monthly private income to compensate for that. This should be part of the (mutual) decision.
This system aims to achieve a fair balance. You want to enjoy life together, and not get a financial imbalance or dependence. Even if there is just a single income, or a significant difference in income, it allows both individuals to buildup private money whilst sharing responsibility over the monthly income/expenses and future.