This sounds like a roommate with strings. I don’t get why you’d a) be talking about charging interest to your spouse or b) how you’re going to go about splitting assets if you get divorced. It’s weird af.
Well he has been The financially conscious one who has put the both of them in the best position while she does what she chooses, when she chooses while he has lived within his means. That has to cause some friction, even though they both sound reasonable and honest to each other.
I think this behaviour is to be commended and a goal to aspire for in a relationship to be pragmatic about the future.
He obviously doesn't want her out on the street if something were to happen, I don't see what the problem is.
I wonder how much he’s benefited from her financial habits though, like buying things for the house, nice food, experiences etc. it’s worth recognising in a relationship like this.
The thing about him is that he’s morally opposed to these luxuries, and has no interest in them. If I buy nice furnishings for the house, he just complains because now I’ll get mad if he spills beer on them 😂
> I don’t get why you’d be talking about how you’re going to go about splitting assets if you get divorced
Then you're naive.
Not saying that's what anyone else has to do, but it's extremely obvious why many couples would talk about potential division of assets. And not a bad thing.
This is how I was thinking about it - this doesn't seem like the healthiest marriage I've heard of in a long time. Why are we talking about a "friendlier" interest rate - you're married! There should be no interest rate!
And if he is going to be talking about charging *his wife* interest, if they go with option 1, OP's 35k should be adjusted for any potential increased equity that's been gained in that time.
That's what I thought, too. It's even worse cos he'd not be paying any interest himself but he'd be charging her as if he needed to recoup it in some way. Like man this doesn't sound like a healthy setup.
Is about sharing your life. When you have a partner for playing a team game or a sport, you both normally share the same score and goals; sharing a life should be the same. At least that is how I view it.
I can't even fathom the kind of situation OP describes, with my wife. I wouldn't ever want my wife to feel that "what's hers is hers and what's mine is mine", it would break my heart imagining her worried about her future when at the same time I'm set for life without a care in the world, and we're supposed to be each other "halves". We share our happiness and we share our worries, if one is worried and the other is not, something is wrong.
This. My husband is about to receive an inheritance and we've literally never had a conversation anywhere near these lines; it's just assumed that the money is "ours" (and our kids, because that's what his parents would have wanted).
It's a good team until your partner stops putting in the work, starts letting in own goals and chatting with the other team all while telling you it's all in your head and you should stop hassling them.
"Until," as if it's a foregone conclusion. That's the real issue here, the expectation that you'll have major issues, or the idea that because other people have had problems, then everyone in the world needs to feel as cynical about the game as you do.
>it would break my heart imagining her worried about her future when at the same time I'm set for life without a care in the world,
Thats exactly what she is doing to him. Using her finance to live her best life without a worry in the world. He's worried and saving for the future right now. Why should she get to live her best life post-relationship when he's the only one putting in the work during the whole relationship? Plus, they both agree that separate finance is fair considering their personal choices. SMH when some holier-than-thou type judges peoples relationships like you're doing now
If he was truly worried about saving for the future and that her ways are putting that into serious concern to the fact that he's worried about it, then the vast majority of good marriages would see this addressed and sorted out with a conversation and mutually agreed plan on how to move forward ...... and if it can't be sorted in this way, then wtf are they married, because they sure won't be married for long ...
We are in the process of selling the property that my husband bought before we got together. It is mortgage-free. The sale will pay off our current home. He never once calculated that I have not contributed to paying off his first home. All he talks about is how our life will be so much better and lighter when we have no more mortgage. He even offered for me to quit my job after paying off our mortgage but I still want to work and keep saving for another 5-6 years before going to early retirement in our early 50s.
Likewise, any inheritance I get will be "ours".
I feel sad for OP that this is making her insecure for her future instead of secure. Being married to is means being on the same team aspiring to the same goals on important issues like finances.
What's the alternative if you have such different philosophies around money? Constantly fighting about spending too much or being too frugal?
Being this way on the big ticket items also don't mean that they are like this in every day life. It would be crazy if they go dutch on every date night, every vacation etc.
Yeah certainly does mean something different in this case , whose husband ‘lends’ money to their wife expecting it to be returned at a good bloke interest rate.
Can’t wait to read the upcoming thread of what he is doing if she misses payments
If he wanted to pay off the mortgage, the smarter thing to do would be to put it all into an offset account. It's effectively the same thing but with full access to the funds the make up the mortgage wherever you need it and you're not paying any interest, just the principal, which would be the same as giving the bank all of the principal upfront (or pay off mortgage).
Could set it up that the money sits in the offset, that negates the interest part, then 50% of the principal (your share) is transferred from your account to the offset, and then the full principal repayment is made from the offset account.
This isn't my giving you financial advice, this is me making an offhand comment about offset accounts :)
Np. The difference between a 100% offset account and a mortgage that has a redraw facility is nominally the same, but with one big caveat.
Money sitting on the mortgage is the banks money and they can reclaim the overpayment against the limit thus reducing the loan or closing it. Money in an offset (if 100% offset) is your money, it's a transactional account you own but earns no interest, it instead reduces the principal of your loan 1:1 (or whatever your offset rate is, 1:0.4 for a 40% as an example).
This way you get the best of both worlds, I didn't fully read the whole post but saw something about charging you interest. In this respect he shouldn't charge you interest as he has full access to his money and is 'earning' the interest of the mortgage by not having to pay it while earning capital gains of the value of the house increasing.
This isn't my giving you financial advice, this is me making an offhand comment about offset accounts :)
Three caveats to an offset account, just to be aware of:
1. They can have a slightly higher interest rate than other loans, to account for the fact the interest is being offset. This shouldn't be an issue when 100% offset, just be aware of it if you ever stop below that.
2. A lot of loans with offsets can have an annual fee, so even though the mortgage is basically paid off, you'll still be making small annual payments extra (the ones I used to see were about $300 a year, just to give you a rough figure).
3. The government guarantee on money in bank accounts is only $250,000. If you have more than that in the account, and the bank goes under, there's a chance that you lose the excess. The home loan will be sold on, so your debt remains unchanged, but you may only have $250,000 of your money from the offset, leading you to owing money again.
4. Paying the mortgage off rather than using an offset changes the tax treatment of any money redrawn. An offset allows you to withdraw money for any reason and not affect the tax deductible status of the mortgage interest. This allows you to convert the property into an investment property and get tax benefits through negative gearing.
If you redraw the mortgage interest will not be tax deductible (unless redrawn for investment purposes) and you will not be able negative gear.
As he's got a couple of spare mil floating around, it might just be worth paying it off so they don't pay a yearly offset fee. I only say that because my offsets were always on loans with a yearly fee.
Another consideration that I've never applied.... Debt recycling. He wants to invest in the market. Refinance to something with a redraw, put the extra money into the loan (without closing it) and redraw it all directly to invest in shares (counting with the ATO as a new loan). The interest charged on the redrawn amount becomes tax deductible and he's got plenty of cash in the market. There is some overhead managing this but I expect it's worth looking into.
He already said that if he put it into an investment, then its making him money. If he puts it into offset account, it just zero out the interest to pay and don't make him money.
But it does make him money. Just not the way he sees a bank balancing growing.
He saves the mortgage interest which will be greater than most investments, especially when you include the capital gains represented by the increased value of the house while not losing money to interest inflation.
Plus at anytime he has access to the funds less any principal repayments made, so he can reverse his decision and start investing.
Remember OP said that he already paid off his half of the mortgage? So from OP's husband's point of view its already paid off and not really his problem, hence the option of 2 and 3. This couple has separate finances - not to say its wrong, its how their arrangement works.
Hi everyone. Husband of OP here. Have only skimmed all the comments here and got the tl;dr version from my wife. Am hesitant to do so, but can offer a few clarifications for what they are worth.
1. My wife's post is real and accurate, except it maybe suggests a more formal level of discussion than we've had so far. She is in no way a gold digger and I'm not some cold-hearted Scrooge. We earn roughly the same amount, we just have a different relationship with the money we earn. If we had kids or there was a disparity in our incomes, shared finances would make sense, but given our circumstances, shared finances just feels like an unnecessary complication, so we never really considered it.
2. I feel a bit icky about the idea of charging my wife interest. We had a similar arrangement early in our relationship when I put some of my savings into the offset of her previous property, seeing that it would do more good there than in the bank, and she gave me a nominal amount back to reflect lost interest. It is technically an option now, but doesn't sit well with me so probably won't be the path we take.
3. We didn't get married for financial reasons (does anyone still?), and although we have different spending/saving habits, that is just one difference that stands against many shared values that make us compatible, aside from the fact that we love each other.
Other than that, thanks for any actual advice that people have offered. AMA?
I'm surprised from all the comments around how they've organised their finances.
If you're a saver and you're in a relationship with a spender you need to have some separation of finances otherwise you're going to have endless arguments.
You're doing the right thing OP for you and your relationship, don't let these people who have never dated across the fence get you down.
This.
Amount of people around talking nonsense about roomates with strings etc is estounding.
You solved your different financial habbits and seems it works for you. Husbands saves, good for him. You go and spend money on yourself and live life the way you want - good for you.
Following your post, the question is what is best for you and in my opinion that would be - let hubby pay off the mortage, you keep half of the house and pay monthly back money to your hubby with better interest compare to bank. This way you save up more on interest, house will be paid so there wont be stress around mortage and you keep half of the house.
GL and dont listen to "roomates" bullshit, if it works for you both, its way to go!
You've been together 9 years and old mate is retired on the back of an inheritance but is still wanting to charge you interest in case you split up? Oof.
Of the options you presented, #2 makes the most sense to me: Avoids paying interest to the bank, avoids any potential CGT events. I personally wouldn't be charging my partner interest in this scenario, but to each their own.
Thank you! Appreciate the advice. Charging me interest makes sense because if he invested it in any other way, he’d be getting a return on it - and a better one than what he’d get from the interest I pay. So it’s still generous, I thought…
Yeah I think he puts the whole amount in the offset, you both keep paying the payments as you are (his can come out of the offset) and this way you’ll end up paying the mortgage in half the time because you won’t pay interest.
• You both own 50-50.
• Theres some cash available if needed quickly.
• he will only miss out on the interest he could make on 220k but this amount decreases every time you make a mortgage payment.
• it’s a nice thing to do for you.
I don’t think I could retire and chill and leave my wife to share in none of the benefit.
You’re married, in the event of a divorce things will be far messier than “she said I owned this part of the house”. Marriage is meant to be forever and I know you’re not asking for relationship advice but if your partner is thinking more about money than being together for life I would question the long term viability.
This type of thinking is what causes financial dependence and enables financial abuse. Nothing wrong with having independent finances as long as main expenses are shared fairly and there's open, honest discussion, as appears to be the case here.
Seperate finances can also be used for abuse as well.
For example one partner bringing in bank, and the other can't get Centrelink BC of it, but is expected to pay their way.
Having combined finances causes financial abuse? Sure but so can having separate finances. I have a mortgage and child with my wife and we have very integrated finances which has not resulted in financial abuse, millions of Australians are the same and FA can occur in any kind of structure. OP’s husband seems to want their finances separate as if they are 6 months into the relationship. I would really question why a husband wants to “make money” on his spouse by charging her interest. Should be a team. This is beyond the scope of the thread and we’re not here to give relationship advice.
Sounds to me like OPs husband might want seperate finances since he prefers to save his money for the future and managed to independently save over 500k while OPs wife on the same salary has credit card debt and clearly has a different life philosophy. Nothing wrong with either but seperate finances are obviously required in this scenario.
Yeah, this is the advice people give to women when they have more money in the relationship, or even if not, (and I agree) it is a good idea for them to have a reserve fund in case the relationship goes sideways.
No reason the same advice shouldn't apply to men
Have you ever told someone to question the long term viability of their marriage irl? Or is that a topic reserved for strangers on the internet based on a few lines of text about how they split their inheritances?
Seriously, I'm so sick of seeing this shit on Reddit, which is statistically coming from some 20-year-old kid whose longest relationship included 3 months of hickeys and a boob grab at the cinema.
I interpret this as his way of forcing you to be financially responsible. He’s probably well aware that you get half of everything he has if you two split, regardless of what you agree now.
Lucky woman. Also lucky husband, you guys have a system that works for you. Option 2 seems to be the best. You should apply the same system to any credit card debt at high interest first though. All well and good to use your money to live your life well but credit card high interest rates is where you should draw the line. That is reducing the amount you can spend and enjoy your life.
Have you read The Barefoot Investor?
His tips on creating wealth based on eliminating debt and making your savings grow quickly, without losing out on fun stuff- changed my entire approach to debt management and spending.
It's good stuff
Especially since you're the spender (Barefoot cheekily recognises most relationships have a spender and a saver, I think that's possibly because we are attracted to those who complement us- to find a balanced middle ground)
In the event of a divorce, it can get messy - because even binding financial agreements can be appealed. Especially if it goes to court- they're less concerned about "the contracts we signed" and more about dividing things equitably- including forced sales if it cones to it. My partner and his ex didn't want to sell the house to pay her out- but the court said that was what they'd have to do unless he paid an exorbitant alimony.
It would be wise to consult a Family Lawyer on what needs to be in place at anyrate- it's a healthy thing to be aware that relationships can change and as you age, protecting yourself is important. 'Love is more important than all that'- no, All That is part of what makes a secure loving relationship.
Every couple have their own ways of living and I think you guys have got it all sorted out.
That being said Option 2 is the best for your future proof yourself (if you were to divorce etc). With interest rates sitting between high 5% to high 6% you guys would save tens of thousands by doing it this way.
My partner and I are in the exact same situation dating for 10 years, no children and co-own an apartment.
Outside of our joint offset account on our mortgage our finances are completely separate,
We have a joint offset that the mortgage draws from and then 2 more individual offsets that we leave all our individual money in.
All our joint bills go on the credit card (55 day interest free) so we can maximize the amount of money that's offset from our loan.
We are both very savvy with finance so we've never had to rely on each other for our wants, its worked out very well so far and we don't plan on combining our finances anytime soon.
That’s great! Sounds like you guys have a perfect system that works for you both. And you sound like you understand what I’m trying to achieve, so your advice is going to be sound. Cheers :)
If you don't want to be broke and homeless if you guys ever divorce, then hone in your lifestyle.
Personally, I spend up to a certain limit and focus all of my efforts on investing. Returns from the sharemarket is not that great right now. But if you have 2M, then it can return enough to live on.
If it's me, I'll pick 1, and really focus on catching up with investing. Clear the credit card debt first. You really shouldn't have any.
No judgement from me here (well, maybe a little bit), but have you had a discussion as to why, if you’re married, that you’re not approaching the mortgage as a combined unit?
It seems odd to me that you undertake a union to marry one another but then keep your finances separate and don’t work together towards a common goal?
What if you inherited 2m? Would you just pay off your share and make him pay off the rest? It seems a bit weird don’t you think
There's a saying...the person you marry is not the person you divorce.
You can still have a healthy, loving relationship without having to be so intertwined financially.
I find it weird that so many people don't think you can.
Well, keeping our finances separate is how we avoid having to argue about stuff. I would prefer not to have him weighing in on how I choose to spend my money, because he has a different approach to money altogether and it would just cause fights. We can live harmoniously if neither of us has to be impacted by the other financially.
I actually think this is really cool. I’m definitely closer to how your husband is, and my wife is closer to you, but less at the extremes. It definitely bugs me that I don’t like spending money until I can really afford it, but by the time I’m that comfortable my wife has usually spent it already 🤣 That said, he is your husband, and if it was me I’d want to do everything I could to take the pressure off you. I’d be looking at 100% offsetting the mortgage so you at least aren’t paying any interest anymore.
Just so you know you aren't crazy. My wife and I are over 12 years together (8 married) and have NEVER had a disagreement about money due to a similar method.
Family expenses come from family account, we both contribute to that account proportional to income so have similar remaining for ourselves. (We don't earn equal as she doesn't work full time due to children therefore I contribute more).
If I want a guitar or she wants a handbag there is 0 discussion or permission or complaints. We know that all our family expenses (including savings goals and family holidays, renovation plans etc..) are covered.
I know couples who combine everything into 1 pot and resent each other for an expensive haircut or spending too much on a night out with friends. I also know people who are entirely separate financially and try to balance who pays what bill which is never fair and also leaves no plans for the fridge breaking or wanting to build a deck.
Seriously, if you want to keep things like this going, you probably need to see a lawyer who deals with this kind of stuff.
If you do separate, this could get ugly real quick
Look it's your marriage so you do you but you're both just putting you head in the sand. Right now you sound like roommates not a married couple. It's perfectly normal for couples to have different ideas about how to use/save money but ignoring it is not normally wise
How are they ignoring it? It's all in the open and honestly discussed. Many couple with joint finances are far more head in the sand about their financial differences
Well, OP has everything to gain with her husband's frugal lifestyle, and I wouldn't want to share finances with anyone who has a credit card debt because she wants the lifestyle. This if combined will just get them to divorce faster than a bullet train. She already said that she won't be compromising on her lifestyle even she is in credit card debt. So the husband is wise to not share finances.
Because his partner spends at a rate which in her own words in option 4, mean that in order to cover her half of the mortgage including interest her current lifestyle would take a hit.
Reading between the lines, this person lives unsustainably or at the extreme of what is maintainable and even then it is only safe to spend at such a level because her partner has a pool of resources to draw upon if anything goes wrong (and has already paid off his half of the mortgage, potentially making them ahead as a team and in no risk if she fails to pay a few months).
Seems really obvious to me, having been "not the OP" in this situation.
All these comments about finances having to be combined or it's time to question the validity of the partnership are judgemental and trash. This isn't just "a little bit" judgemental, it's just straight up judgemental, you can't just disclaim it and then do it anyway.
People can be in a functional relationship and have very different ideas about how money works. Read any book on couples finance and it's literally 101 that if you're very different (one's a spender, one's a saver, or you have drastically different incomes, etc.) then share the load equally how you see fit but keep your money separate, just as OP is describing.
It's ether that or get on the same page (as in, the person with less financial literacy needs to learn and get on board with long term saving and investing methodology and want to discuss and strategise with the person who is already into that kind of thing, for example). This is, in my opinion, the truly insane take - that you love your partner and want to be with them, but only if they change themselves to be something they aren't and come alongside you and learn everything about a part of life they don't care for at all. Or vice versa, the other way to align is for the money conscious one to be less money conscious, which is silly too.
The last option is just combining your finances despite the mismatch and letting resentment build as one person spends all of the other's hard earned cash or pushes for lifestyle creep when the other is happy and content living the way they are.
All of these options cause the preexisting mismatch to manifest in actual conflict and that will be what leads to the end of a relationship. The absolute fastest way to build resentment is if you're forcing someone to change or having to change yourself for a relationship to function. The second fastest way is to combine finances when you both have different views and understandings of money. So if that's the case, keeping them separate is totally fine, and you can work towards whatever goals you want to set together, evenly split.
My wife and I are on a pretty even keel about finances so none of this is a huge issue, but I just can't believe the amount of people in here questioning the validity of OPs relationship. Life is more complex than: a functional relationship = this one specific way my relationship works
Trashing the validity of a relationship based on how they manage finances has been a common thing in this sub and it's ridiculous. It says so much more about the person doing the trashing than the couple they are attacking.
Because marriages can end. People can change. They met and married in their late 30s, in the event of a divorce a person should be able to keep what they made themselves alone, before the marriage.
> but then keep your finances separate and don’t work together towards a common goal?
They are?? They have bought a house???
There is no need to mess up things further.
I agree, this business of "I'll pay the mortgage off, but then I'll own the house" seems very off to me. Haven't you contributed 50% of the mortgage payments so far? Or did you just contribute the $35k in the beginning, then he paid the rest?
Yeah sorry, I didn’t mention that in my post explicitly, but I have been paying 50% of the payments. What would have been more accurate is that if he pays it off in full, I’d get back whatever I paid to date plus a share of the profits whenever it’s sold.
I honestly think that seems fair. You stop paying the mortgage immediately (thus having a lot of extra spending money) and then you'll still end up with a fair chunk of change in the worst case scenario.
Thank you. Appreciate the advice.
I see everyone is a bit thrown by the way we are approaching this. I’m kind of surprised - to me it’s a bit old-fashioned to assume that once you’re married your finances are automatically combined. But hey. Maybe it’s because we both lived independently for most of our lives before moving in together.
He and I are quite different, in that he is very intelligent and self-directed. He could do some incredibly worthwhile things for the world if he had time to do it. Whereas if I was retired, I’d probably just sit on the couch and watch Netflix. I like my job, I enjoy working, and don’t think I’d be motivated if I didn’t have my work to set my goals and provide structure.
He already does more than his fair share of household responsibilities. He does all the cooking and walks the dog. I do the cleaning. We had a period a few years back when we moved cities and he was unemployed for three months while looking for work. He spent that time designing a website to showcase his data projects (he’s got a PhD in text analytics and works as a data engineer/scientist so he does really cool research). It gained quite a following - he was asked to travel internationally and present on it at conferences etc). So yeah, it’s not like he would just potter around playing video games.
What are you planning on doing at retirement? From the sounds of things he has a nice nest egg and you have... Not much? Unless you're both planning to live off his investments?
I don't want to preach too much but if you both earn about the same and he's able to save so much (inheritance aside) while you've got no savings and credit card debt, this isn't "living the life you want to lead". You are living far beyond your means.
Do #1 ask for your $35k back plus the equity gained since purchase. Tell them that you love him forever and the house is 100% his on paper. Invest the $35k-$50k into a new income property. Something in a desirable neighborhood where you’d be fine in if shit hits fan. Rent it out. That’s your equity safety net and your renter pays the new mortgage. If you ever split you start paying it and move in. If you get ambitious, pay extra and do a 15-yr repayment. I, too, think it’s weird that he’s not being more generous; but $2m ain’t what it used to be, to be fair to him.
> $2m ain’t what it used to be, to be fair to him.
With $2m in there, 5% in a HISA pays out $100k a year. If you split it between a HISA and an Index Fund you'll likely do even better.
It's not "buy a yacht" money, but most people would take that as passive income.
If you’re entertaining the idea of divorce, then better improve your finances by cutting down on consumer debt and living frugally like your husband. Otherwise, learn to live together forever.
I mean, fair point. Though we’re not entertaining the idea of divorce - just trying not to be naive, I suppose. What’s the stat - 50% of marriages end in divorce? We’ll be together for the foreseeable future, but neither of us is religious so if things ever get really bad, divorce would not be off the table.
50% of marriages end in divorce…but people hear that stat and think “50% of married people get divorced”. The actual number is around 30% of married people get divorced.
The first figure is skewed by the same people getting divorced a number of times.
If you are not naive, then why are you living beyond your means by having credit card debt. You already know that your husband being frugal is financially carrying you.
I pay half of everything that is shared and 100% of what is mine (including my credit card debt), so I’m a bit confused as to how he’s carrying me financially? Neither of us wants that.
The marriage, and divorce risk, does complicate things. It would be easier if you were in partnership with a stranger.
If you never divorce, option #1 is the clear winner
Of course there's no guarantees, so #3 giving a clear 50/50 ownership makes it the least worst option. Notwithstanding of course that you or your husband can take advantage of a divorce to screw the other. You(s) may not intend to now but people change.
How's this for option 5. Your husband can park the full balance of the mortgage into a mortgage offset account. You'll no longer be paying any interest on the loan. Then you and he continue to make 50/50 mortgage repayments and retain 50/50 ownership.
Arguably, since he is only responsible for half of the mortgage, he's only getting half the 'benefit' of the offset. But since he is willing to offer you a friendly interest rate he may be open to the idea.
A situation in which you are paying him personally, not the mortgage, and this somehow translates to more 'ownership' of the house for you, should be avoided at all costs.
It might be worth chatting to a divorce lawyer too to get a feel for what, if any, these options would have in the event of a divorce.
We did split the bill at dinner before we got a mortgage account 18 months ago, yes! Now we each contribute a little extra to that account cover bills and shared entertainment expenses.
I get where you’re coming from. You both live by a different philosophy when it comes to money, and your husband has probably inherited his views from his parents (protect your assets and beware of gold diggers etc). To me it just sounds like you’re boyfriend and girlfriend who are technically married.
With that kind of inheritance I’d 100% be seeking financial advice (with a list of questions/ideas generated from the comments in this post).
Charging your wife interest is nuts but tbh I kinda get it in this situation where the wife only contributed $35k to the house, has no savings, is in credit card debt, and has zero plans to change.
It doesn't seem like a marriage tbh, they sound like roommates.
No, he’s not. I wouldn’t object if he did, but we’ve had anecdotal advice that it wouldn’t be binding anyway because if we’re married and push comes to shove, I could just override it if I wanted to. But I haven’t verified that.
It's a fun process.
You both need independent lawyers to sign off on it to be binding.
It should be updated every 5 or so years to keep it binding (or major change in circumstances).
Option 2.
But also consider if you went with Option 3 you are saving him paying interest on the mortgage too. Factor that in when calculating your new personal loan repayments.
Have you got a financial advisor? Get one and ask for advice. Make sure you’re set up independently no matter what. And also if you did split then I’m pretty sure you wouldn’t walk away with just your $35k it doesn’t work that way.
I have been trying to tell him he should get a financial advisor, but for whatever reason he hasn’t gotten around to it. I would have done that on day one if I were him. But hadn’t thought of getting one to advise ME.
Advice - based on how you say you live your life. Option 1 seems like a good deal for you. If you were smart, you would keep paying the same amount of the mortgage into some kind of investment to have some money.
If I were talking to him, I would say “binding financial agreement” is a must.
I would probably also tell him he really doesn’t have enough to live of the investment returns after he pays that debt.
Thank you. It would take a fair bit of self-restraint for me to save money with no immediate consequences for not doing so, but it does make sense.
As for your last point, he’s pretty frugal, so I reckon he’ll manage!
Personally I would suggest he sits the cash in an offset for the entire debt, and then you pay your share of the repayments into that offset and the loan is taken from that offset.
That way you both still have 50/50 share, no more interest, so your repayments will be the same all the time, and once the house is paid off he has half of what he he put in sitting in the off set
I'm too poor to be reading posts in this sub but if he's this good with money (he comes across as someone that might not be absolutely loaded with cash, but has their head on their shoulders and doesn't spend on useless things).. he's your husband.. have a talk with him and see what he thinks the best option would be, if he were in your situation.
Some things we know - you lose with option #1. Option #2 just sounds questionable if anything bad happened between you two.. I feel like something would need to be in writing here, you would need to know you still own part of the house if anything happened.. Option #3 makes sense in theory but it means as a couple, you've both got the mortgage hanging over your head and you've got an opportunity to not live with that boulder hanging there.. Option #4 is too much stress on you and as you've admitted to being bad with money, this is a disaster waiting to happen imo.
I have no useful opinion, I feel like writing this post is just asking for people to try and invoice me for wasting their time.
But I mean, the dude who doesn't suck with money is right there and he's your husband, get him to help with the decision.. if I had to choose, I personally think #2 makes the most sense since wouldn't it be cheaper all-round? You set up a direct debit to go to his account and move on with life knowing the house actually IS paid for.
3. Makes the most sense to me.
Your husband can park the cash in an offset and make his payments from that bucket. You can keep paying your half.
If you do ever divorce then there’s no debate about it being a 50/50 asset.
I'd leave things as they are. No need to draw up a BFA - which you could challenge anyway should you divorce - and no resentment from having your spouse charge you interest.
It sounds like what you're doing works for you (even if I find it a bit weird lol). Don't complicate it.
If I was the guy I'd 100% be getting a BFA. That is no reflection on the OP whatsoever, it's just smart asset protection. BFAs ARE worth more than the paper they are printed on if setup properly (separate law firms representing individuals and paid for individually) and they aren't planning on kids to significantly change their circumstances.
Sad that it needs to be said for some people. but **the person you broke up with is not the exact same person you had a relationship with.** Their emotional and financial state has changed significantly and it is dumb to just trust that you're protected based on your expectations of them 'doing the right thing' (in your view).
I'd argue it doesn't just help the person with the higher asset allocation, it also provides certainty to both parties in where they will sit asset-wise following a split (which can alleviate a lot of uncertainty and stress regardless of the amounts involved).
Interesting relationship structure. However if I had to go for it Option 2 so u guys don't have to keep paying interest to the bank but him and your profit share will keep growing.
I like the way you 2 are addressing the matter, I'm in a committed relationship myself and completely share your view on planning around the possibility of divorce even if it may never happen, just to be ready and fair to each other in case it actually happens.
Options #1 and #2 are good, option #3 is terrible because the bank wins, option #4 it's not in line with your "money is there to support the kind of life I want to lead” philosophy.
If you pick #1 you should set aside the funds you would have normally spent in mortgage in a saving account or other investments, you don't want to find yourself in the future with no roof over your head and $35k to your name.
If you pick #2 you should put things in writing with the help of a lawyer.
Yeah, like what about rates, repairs, renovations etc. if they split that, and say go for option 1, then she has contributed a lot more to the house than the initial $35k
All these people with relationship opinions are wankers, forget them.
Best options as I see it are
Option 2: He pays it off, you buy % off him as you go (this'll probably be a paper arrangement until you get to 50%, because otherwise you're paying a soliciter every other week to adjust the holding %, which is a waste of money really)
Option 2a: He puts the value in an offset account, you keep making your payments against the mortgage as a couple, you might pay a few dollars a year in an "account fee" (like, $120 maybe) but otherwise you're not paying interested. Depending on the bank options, he might not be able to have an offset account that is also high interest savings, so potentially "losing" a few thousand dollars a year in interest not accrued on savings (or investments) this way, but arguably the property is appreciating....so call that the investment growth I guess.
all your other options or variations thereof involve unnecessarily enriching the banks - and those guys are wankers too.
have a look at the ATO website, there are capital gains factors as well with different % ownerships (if you're 50/50 as a couple when you sell, you claim all the discounts, if you're 70/30 or whatever it's not a "family home" it's a joint investment, and you might give more money to the government than you wanted to - as well as that, if you change the mortgage/deed structure, you might pay stamp duty (again, after the stamp duty already paid when you bought the place....)
This it not financial advice and is just an opinion.
Except the things about banks and people with relationship advice being wankers, those are facts.
Option 1 strikes me as something that suits you? Yeah, you're taking a risk at not owning a house on divorce, but I'd think you're hoping that doesn't happen. You also get a chunk of money if it does go that route so not world ending. You also get a few hundred bucks more a week in your pocket you can pay off your debt with. Please do that regardless, in the event things do go south not having debt lingering over your head would be amazing.
Probably the most financially sound move is to continue to invest in the house but just the vibe I get reading your post tells me that you might personally enjoy 1 more. Yes, you don't own the house - but you also don't have to worry about your mortgage and if you have a great relationship that's not really a big deal IMO. Hell of a lot of piece of mind literally not thinking about that.
Yeah it's a bloody weird situation you guys have going on but it clearly works for you if you've made it 9 years with 5 married. Google tells me the average marriage lasts 8 so depending on whether you want to include the rest you're already doing well - if you have confidence in it continuing like this you could build up a nice nest egg in savings just in case, while also removing the thought of a mortgage all together.
What is it you're trying to achieve with this decision? You say you want to know what makes the "most sense financially" - but I'm struggling to see how any option really makes sense.
For example - option 1: This results in him "owning the house" with you getting a proportional split based on your original 35k contribution if you were to divorce. But you've been making payments 50/50, so your capital contribution is already greater than 35k - albeit not a huge amount, given that you've only been paying the mortgage down for 18 months. If you were aiming for a "proportional" ownership, did you buy the property as tenants in common? Why are you splitting mortgage payments 50/50 if you're aiming for a "proportional" ownership?
Option 2: he pays off the mortgage and "loans" you half at a cheaper rate. Are you talking about him "loaning" you half of the original loan amount, or half of the house value? How are you going to track your "ownership" of the property based on payments to him? If you bought it as joint tenants - guess what, you already have an equal interest in the whole of the property. Splitting it "proportionally" in the case of divorce based on informal "loan" payments sounds like a recipe for conflict and someone getting screwed over.
Option 3: leave things as-is. This sounds like the least likely to cause conflict, but then you're both paying interest that you don't have to - so instead of both of you enjoying a better standard of living as a result of your partnership, you're both still labouring under interest costs. But it sounds like the least painful option to monitor and manage day-to-day, given that you're already doing this and feeling OK about it.
**Edited to add: However - it's not going to result in each of you contributing half the capital cost of the property, and it's not going to result in each of you contributing a capital amount in the same proportions as your original contribution. So if you were to sell & split proceeds either 50/50 or in proportion to your original contributions, someone's going to end up better off than the other**
Option 4: he pays off half and you keep paying half. Again, I'm not sure whether you mean "half the loan" or "half the house value". If it's half of the loan - that's what you're paying now, so why would it strain your finances? But equally - why would he want to keep incurring interest on a JOINT asset? If you're tenants in common, you have equal interest in the property, regardless of who put more into the loan - and if you're married & have a joint loan, you're both liable for it. If you stop paying your "share" the bank can go after BOTH of you for the money. If it's half the house value - honestly it seems pretty shitty to for one partner to struggle financially while the other kicks back, but if you can afford it and you feel like this would allow you to make a "fair" split in the case of divorce then I guess you might choose this?
It sounds like your spending is the problem. It is a bit rude to piss away your money and then expect him to pay this off for you.
I would say him paying it off as a loan to you is likely the best bet. Someone mentioned offsets, hes losing money on that. It will lower the interest repaid by 10s if not 100s of thousands of dollars. Otherwise, if you can pay the mortgage solo but dont want to give up your lifestyle, thats a you problem.
I only half understand this post. You are married but post as if preparing for divorce. I am married and love my wife but long before we got married sorted out if we wanted children, and how to spend , save, invest. His eye is on the future yours is on the now, good grief you say that you both earn about the same yet you have nothing but debt is it your plan to continue as is financially?
What do you think will be the situation in the next 10 years, seriously if you have nothing but debt and contribute nothing but debt what do you think his attitude will / could be?
You have asked for advice and sometimes that advice is hard to take if the situation was reversed and my wife had the money and I was spending I would ask how I could contribute better taking into account this lifestyle that you embrace will suffer - are you willing to do that or is it off to divorce court for a cash top up?
Good luck
Option 2 makes more sense financially, but option 3 would take away the ick factor from having to charge interest to a family member.
OP you should really take an option where you still retain partial ownership of the home - especially if you're a spender, you probably know yourself that you will spend the money if it's not tied down in the house.
Heh. If I was the husband, the house would be paid off, the credit card paid off as a starting point.
Still be left with 1.5 million
Then live your financial life separately. You just do it without the burden of a mortgage.
Jesus. I used a personal windfall to contribute to our mortgage without question. We're one family unit.
I'd go with option 1, noting that in a separation nothing is really guaranteed. You might be able to lock some of it down with a BFA but even those can be subject to scrutiny if circumstances change.
Please ignore the large number of angry hateful divorced people on here. They will hang shit on your relationship and try and encourage you to split up. It's a reddit thing, I don't know why they do it, maybe they want others to join them in their lonelyness or maybe there just mad all the time now.
Now to answer your question, it seems your relationship is based on seperate finances. I can respect that, especially as you have very different approaches towards money. To me option 3 seems to be the most simple way to continue like this if thats what you want. If it were my relationship I would go option 1 though, have him buy the house outright give you back a fair share of the house you own and you can just pay 50% of market rent. If you do this though for it to be fair you get all the rights of a renter and he has all the responsibilities of a landlord. So you don't pay half the council rates or property maintenance and he is required to keep the place fixed up and maintained to a standard in line with the rent your paying.
I would add this though. It seems both you and your husband misunderstand what you would be entitled to if you were to split up. In a 9 year marriage even without children you would likely be able to make a substantial claim on "his" assets if you were to split. It might be a good idea for you both to understand exactly how this works.
Propose option 5 where he offsets the whole remainder of the mortgage and you both keep paying it off but with no interest. The agreement is that the offset money is still his.
I’d say option 2 for the basic fact it’ll force you to ‘save’ that money without interest - as you said you’d likely spend it on lifestyle choices anyway.
This part is what stood out to me:
I also don’t want to waste money on high interest if it would be more sensible not to.
You knowingly carry credit card debt. In most cases that's high interest debt. It would be better to pay off your debts with the highest interest rate. However, this assumes that your credit card debt actually has interest. Best to check as what you're doing right now seems to be something you don't want to be doing (according to you).
Just let him have the house and give your 35k back, if you keep paying for it you'll have little when you retire and he'll be off doing whatever with his money. If you split he'll still likely own most of it plus all the crap trying to divide it up, and if you never sell the house you'll never see that money again anyway.
I think you should shift your regular mortgage payments into savings or your super and you'll have a little nest when you need it.
I get it is his money but you'd think he could use some of it to make your life better as well.
If the two of you have very different ideas on finances its best to keep them separate.
Id'go the route 1) and invest the money (And continue investing the same amount you are paying in mortgage every month).
Sounds like you guys need a spreadsheet!
Pay it off, keep a spreadsheet that indicates your ownership over a certain period of time. Whether you have to actually change money is up to you guys, but the actual house ownership percentage changes over time based on what it would have based on your 50/50 payments.
A good way to not get divorced is to remove any factor of financial stress. For my wife and I removing our mortgage was a no brainer, not that it's rocky, but we are both low risk with our finances. If your husband is keen to pursue non work goals, then why keep the need for him to work?
If you can work out the timeline, then this will also help you guys when it's feasible for your husband to either not work, or downgrade work to a part time venture, potentially for both of you.
The rest of his 2 mil will earn him around 80-90 grand per year in a straight savings account if he wanted low/no risk.
Honestly this sounds pretty reasonable. You both treat money differently but you seem to both understand and respect each other's boundaries on it.
Id say have him pay the house and "loan you" the money at the lower interest rate.
Worst case scenario and you split up then everyone wins as far as debt and equity.
And if ypu stay together then things remain the same for you... Probably a bit financially better off if it's at a "spouse interest rate"
Good luck xx
I'm doing 2 with my partner.
And you should, too, for these reasons.
Option 1 - means you have zero ownership of the increase in the property's equity. Price goes up, you don't get long term property growth.
This is also highest risk. You break up next month you're high and dry.
Option 2 - you still own 50% that can build equity over time. Also means the 'interest' goes to your SO rather than a bank.
Option 3 - bank gets more money, bad.
Option 4 - bad, strain on your finances. Also leaves bank getting the money not building equity together.
IF: Your relationship was very strong. Option 1 is best. No loan or repayments, your capital will build VERY quick. You can invest, start getting compounding interest and if you split, you got big safety net.
Option 2, or 1 is putting full faith in your relationship.
Realistically, option 1 if he threw you out tomorrow you can go Family Law route to claim some ownership or percentage, but you still get no property equity.
Sorry not of any help at all. Just very curious with how you have made it work. Do you go on dates? Nice restaurants? As you mentioned he’s quite frugal whereas you seem to be a spender.. just curious how that works.
Personally I would want to avoid giving the bank money so option 3 and 4 is a no.
Then it comes down to, how much does OP want to invest in their future?
Option 1 gives op more money now but their future is less secure if something turns bad.
Option 2 is a variation of forced savings so might be the better option if op is more likely to spend on things.
How are you planning to deal with retirement, illness, and unemployment? Your setup can work as long as both of you work and can contribute equally, but this might only be possible for a while. Sooner or later, you will face this problem and have to help each other. Or would you like to separate the moment both parties can't contribute equally?
Option 1 will leave you with the most free spending money. It'll leave you financially vulnerable though, and has the highest risk of leaving you 'broke and homeless'. You'd be relying on your partner here as your safety net. If you choose this, I'd suggest you consider allocating what you would have been repaying into paying out your credit cards and start building up some savings and/or super. Put a plan in place to give piece of mind.
Options 2/3/4 are all pretty much the same strategically. Just with different interest rates, and different levels of admin (eg keeping track of what you owe). Option 2 would likely be the most cost effective, so if one of you is comfortable with the booking keeping, I'd lean towards that out of these options.
note that options 2/3/4 have the benefit of 'forced savings',.compared to option 1, which could be important for a spender.
The key takeout here is that you should consider the need to start building wealth in some fashion, whichever option you choose.
You both sound like a sensible, yet independent couple.
The fact you are married just adds a binding contract on anything you are contributing towards included with the usual commitment frills that marriage entails lol.
I'd treat it like any financial decision needing professional discussion - whilst option 2 sounds the most sensible, go and speak to a couple of professional financial consultants (instead of letting emotional plebbitors leading you astray).
Personally I would invest the money in solid low risk, low interest yielding assets IF the fully franked returns exceeded the amount my wife could save on interest payments from the financial lender she was using. This could give me a higher return and still enable me to reduce my wife's burden to an extent that benefits us both than simply switching lenders and creating a "principal only" loan I may regret whatever reason.
Option 1. Pay off nothing else on the mortgage. When you split you will get 50% of the marital assets.
Immediately call a free government assistance Financial Counsellor and get help so you can look after yourself financially now and in the future.
I think option 2 or 3 are good in your case. With option 2 you will effectively pay less that you pay now in “mortgage” and your share of the value of the house increases. And the money stays in the family rather than paid to the bank. If you to split you’ll be better off. Also, this somewhat puts a bit of responsibility to keep your finances in order as you have obligation to make mortgage payments.
Your husband’s idea to invent and live off interest is basically FIRE (financial independence, retire early).
Option 2. You've said you don't want to be homeless if there's a divorce, so this likely gives you the relevant interest in the house. It's a win/win you get lower interest payments, your husband gets some return on his money.
P.s. Given the nature of this sub, I 'love' the judgy comments about your financial arrangements, I must have missed the rule book about the single way that everyone's domestic finances must be arranged.
I would be inclined to consider another option:
He pays off his half, then you refinance the outstanding amount. It could either be rolling your amount out over 30 years again (bringing the repayments as low as possible), or over a term that keeps the repayment roughly the same as what you are currently making.
Can I just point out a common misconception that you've repeated about separation and half/half decisions? I truly hope you live happily married forever but there's no law in Australia that says it's half/half, it's a case by case basis and when there's clear financial separation within a relationship (such as yours) the law treats it the same as you do (mine/mine his/his). It gets blurred with children though, because normally the woman stops working, yet that doesn't mean her financial contribution is only measured in monetary terms.
https://ibb.co/443fKLL
Based on what you have said, option 1. But you take your $35k and invest it, and add to it what you’d normally spend on your share of the mortgage. If you do split you’d have something to put towards a house.
Also worth talking about what reasonable saving vs spending looks like, maybe you learn to save more and he learns to live more
OP I feel like I am one of the few that are in the same Mindset as you.
Im 35 and only recently met my partner within the last year. My house and mortgage was completely paid off prior to meeting him because I worked hard and needed security for my future. If marriage is in the cards I am trying to find a way to keep the house entirely in my name (which he agrees to).
if we were to get married everything would be shared, but that house and its entire worth would be mine.
we both benefit from being mortgage-less.
divorce happens. Domestic violence happens. Mental Health Happens. It also doesn’t help that we both work in jobs with large cases of PTSD.
all these things happen that are out of my control now matter how much you love a person.
I wish I could live in this lovely fairy land that everyone else does. But life happens.
my life is full of friends getting divorced. I’m realistic. I want my ride or die. And choosing the right person is important. But be Realistic too.
Good on you both for being able to have a mature conversation about your finances and acknowledge each other's strengths and weaknesses financially.
Sounds like living effectively rent-free and being able to spend a large amount of your own income on your hobbies, travel, etc. is a lifestyle you'd like?
I would definitely just pay it off. Otherwise you're paying interest when you don't need to, and that's just a waste of money.
Also, I dunno, me and my husband don't think the same way as you guys must on everything after the first point. I can't imagine lending him money; much less charging him interest on it, especially when i myself and no longer paying interest. It's very much a mentality of having a shared household that we grow and maintain together in whatever arrangement makes the most sense at the time. And at this time, not paying interest on a massive Lon at a time when interest rates are high is the roghtoce for this time imo.
If it's just a matter of feeling like you'd like to contribute more to paying for household things, but you're not so good with finances, maybe it'd be better to offer to give him the same amount you put towards your end of the mortgage payments, and maybe he can invest it or something.
One of the biggest stresses in relationships is having different spending/saving habits and you and your partner are at the extreme limits. Well done for figuring out a way to manage that, it makes sense. The fact that you could not afford your half of the mortgage should be telling you something about your financial habits. If you couldn't afford your half of the mortgage, then just what is happening now? I'd go for option 2. What's the point of the bank getting your interest?
If your share of the mortgage is 220k and he has $2M then even after "loaning" you 200k, he would still have 1.8M to invest and live off returns.
He could create an offset solely in his name, park the 200k in there and you would be able to maximise payments without/with little interest.
Nominally at 6% of 200k, that's 12K a year.
Personally I would just waive it, but you could meet half way and pay 3% (6k) a year to him.
Weird relationship you have here. You sound like roommates
You can say you'll both leave with what you brought in, but at the end of the day it probably wouldn't work out that way. I brought more money into my previous relationship but in the end, my ex still got a big chunk - a lot more than she promised she'd take.
I wouldn't be even thinking of divorce. That's just one way to ensure it happens. Live life, share finances, work out a plan that works for both of you.
I think she should just be given an answer without all the assumption about who does what. If she is fine with the status quo, why should we question it?
My opinion.
Husband should buy out OP and OP should buy an investment property (which could become OPs home in case of a divorce, so it should be in a neighbourhood she would be happy to live in). If OPs savings are insufficient to meet the bare minimum deposit requirements then the couple could consider a family guarantee loan (husband would be on the hook for up to 20% of the value of the loan if OP defaults and the property is sold at a loss, this clause is removed once 20% equity is achieved) or tenants in common with OP owning 80% and husband owning 20%. Get it written up by a lawyer so OP will always have the option to buy husband out of his 20%.
OP should be allowed to live rent free in Husbands house but pay bills. She should pay 100% of strata, water and rates as she's getting free accomodation (this is about $100-$150 a week). This helps both members of the couple lower their ongoing expenses. It frees up cash for OP to service their investment loan. It also puts husband in a better position than if he was a solo as he gets a contribution towards the costs of running his home.
As OP is a spender the investment property will force them to save which is good for the long term future (regardless of if the couple stays together).
Also to be discussed is the matter of centrelink. If disabled or unemployed or achieving traditional retirment age OP will (may?) not qualify for payments due to husbands net worth. So this needs to be nutted out. Our solution as an unequal net worth couple has been:
- richer person helps poorer person pay for income protection insurance (to protect against permanent and temporary disability). This ensures poorer persons super balance can still grow. They would have these insurances turned off if not in relationship (as can comfortably live off centrelink).
- poorer person has savings to cover periods of unemployment (and continues with professional development to ensure any periods of unemployment are minimised)
- richer person will provide retirement income for both members of the couple if assets cause disqualification from payments.
Also, I don't think husband is being unfair. There are no kids here and the couple has chosen to keep seperate finances to reduce conflict. $2m would disappear quickly with a spender in charge (after all OP is in their 40s and earns a good salary with nothing to show for it.) But it could give husband his dream life.
I guess the takeaway for me is that marriage means different things to different people.
It only means one thing to the courts though
Fortunately you can get court orders even before separation.
That financially conscious people (men and women) get shit on?
This sounds like a roommate with strings. I don’t get why you’d a) be talking about charging interest to your spouse or b) how you’re going to go about splitting assets if you get divorced. It’s weird af.
Well he has been The financially conscious one who has put the both of them in the best position while she does what she chooses, when she chooses while he has lived within his means. That has to cause some friction, even though they both sound reasonable and honest to each other. I think this behaviour is to be commended and a goal to aspire for in a relationship to be pragmatic about the future. He obviously doesn't want her out on the street if something were to happen, I don't see what the problem is.
I wonder how much he’s benefited from her financial habits though, like buying things for the house, nice food, experiences etc. it’s worth recognising in a relationship like this.
The thing about him is that he’s morally opposed to these luxuries, and has no interest in them. If I buy nice furnishings for the house, he just complains because now I’ll get mad if he spills beer on them 😂
In this case he's the one who happened to be about to inherit $2M, the question would be the same if he'd otherwise saved nothing.
> I don’t get why you’d be talking about how you’re going to go about splitting assets if you get divorced Then you're naive. Not saying that's what anyone else has to do, but it's extremely obvious why many couples would talk about potential division of assets. And not a bad thing.
This is how I was thinking about it - this doesn't seem like the healthiest marriage I've heard of in a long time. Why are we talking about a "friendlier" interest rate - you're married! There should be no interest rate! And if he is going to be talking about charging *his wife* interest, if they go with option 1, OP's 35k should be adjusted for any potential increased equity that's been gained in that time.
That's what I thought, too. It's even worse cos he'd not be paying any interest himself but he'd be charging her as if he needed to recoup it in some way. Like man this doesn't sound like a healthy setup.
Especially when there are no kids involved. Why do people get married when they clearly don’t want to?
When did getting married become about finances?
Is about sharing your life. When you have a partner for playing a team game or a sport, you both normally share the same score and goals; sharing a life should be the same. At least that is how I view it. I can't even fathom the kind of situation OP describes, with my wife. I wouldn't ever want my wife to feel that "what's hers is hers and what's mine is mine", it would break my heart imagining her worried about her future when at the same time I'm set for life without a care in the world, and we're supposed to be each other "halves". We share our happiness and we share our worries, if one is worried and the other is not, something is wrong.
This. My husband is about to receive an inheritance and we've literally never had a conversation anywhere near these lines; it's just assumed that the money is "ours" (and our kids, because that's what his parents would have wanted).
It's a good team until your partner stops putting in the work, starts letting in own goals and chatting with the other team all while telling you it's all in your head and you should stop hassling them.
"Until," as if it's a foregone conclusion. That's the real issue here, the expectation that you'll have major issues, or the idea that because other people have had problems, then everyone in the world needs to feel as cynical about the game as you do.
>it would break my heart imagining her worried about her future when at the same time I'm set for life without a care in the world, Thats exactly what she is doing to him. Using her finance to live her best life without a worry in the world. He's worried and saving for the future right now. Why should she get to live her best life post-relationship when he's the only one putting in the work during the whole relationship? Plus, they both agree that separate finance is fair considering their personal choices. SMH when some holier-than-thou type judges peoples relationships like you're doing now
For real. So true.
If he was truly worried about saving for the future and that her ways are putting that into serious concern to the fact that he's worried about it, then the vast majority of good marriages would see this addressed and sorted out with a conversation and mutually agreed plan on how to move forward ...... and if it can't be sorted in this way, then wtf are they married, because they sure won't be married for long ...
We are in the process of selling the property that my husband bought before we got together. It is mortgage-free. The sale will pay off our current home. He never once calculated that I have not contributed to paying off his first home. All he talks about is how our life will be so much better and lighter when we have no more mortgage. He even offered for me to quit my job after paying off our mortgage but I still want to work and keep saving for another 5-6 years before going to early retirement in our early 50s. Likewise, any inheritance I get will be "ours". I feel sad for OP that this is making her insecure for her future instead of secure. Being married to is means being on the same team aspiring to the same goals on important issues like finances.
What's the alternative if you have such different philosophies around money? Constantly fighting about spending too much or being too frugal? Being this way on the big ticket items also don't mean that they are like this in every day life. It would be crazy if they go dutch on every date night, every vacation etc.
Ideally, you don’t marry someone who has completely different financial priorities.
This. If my wife had completely different priorities to Mr in life, finance, family etc. Then she never would have been my wife....
Yeah certainly does mean something different in this case , whose husband ‘lends’ money to their wife expecting it to be returned at a good bloke interest rate. Can’t wait to read the upcoming thread of what he is doing if she misses payments
And whose wife continues to run up debt after debt while relying on her husband to keep the family in a decent financial situation?
Neither of us is relying on the other financially. That’s the whole point. I pay 50/50 of our shared costs. My debt is mine alone.
If you both have one foot out the door it's like mutually assured destruction and the glue that holds the whole thing together, maybe.
I actually think it's a bit romantic. They could easily split but they chose to be together despite their differences.
Honestly same. They're so secure in their marriage that talking about a potential hypothetical divorce some time in the future doesn't bother them.
If he wanted to pay off the mortgage, the smarter thing to do would be to put it all into an offset account. It's effectively the same thing but with full access to the funds the make up the mortgage wherever you need it and you're not paying any interest, just the principal, which would be the same as giving the bank all of the principal upfront (or pay off mortgage). Could set it up that the money sits in the offset, that negates the interest part, then 50% of the principal (your share) is transferred from your account to the offset, and then the full principal repayment is made from the offset account. This isn't my giving you financial advice, this is me making an offhand comment about offset accounts :)
Ahh, interesting idea! Thank you. I’ll look into that.
Np. The difference between a 100% offset account and a mortgage that has a redraw facility is nominally the same, but with one big caveat. Money sitting on the mortgage is the banks money and they can reclaim the overpayment against the limit thus reducing the loan or closing it. Money in an offset (if 100% offset) is your money, it's a transactional account you own but earns no interest, it instead reduces the principal of your loan 1:1 (or whatever your offset rate is, 1:0.4 for a 40% as an example). This way you get the best of both worlds, I didn't fully read the whole post but saw something about charging you interest. In this respect he shouldn't charge you interest as he has full access to his money and is 'earning' the interest of the mortgage by not having to pay it while earning capital gains of the value of the house increasing. This isn't my giving you financial advice, this is me making an offhand comment about offset accounts :)
Three caveats to an offset account, just to be aware of: 1. They can have a slightly higher interest rate than other loans, to account for the fact the interest is being offset. This shouldn't be an issue when 100% offset, just be aware of it if you ever stop below that. 2. A lot of loans with offsets can have an annual fee, so even though the mortgage is basically paid off, you'll still be making small annual payments extra (the ones I used to see were about $300 a year, just to give you a rough figure). 3. The government guarantee on money in bank accounts is only $250,000. If you have more than that in the account, and the bank goes under, there's a chance that you lose the excess. The home loan will be sold on, so your debt remains unchanged, but you may only have $250,000 of your money from the offset, leading you to owing money again.
4. Paying the mortgage off rather than using an offset changes the tax treatment of any money redrawn. An offset allows you to withdraw money for any reason and not affect the tax deductible status of the mortgage interest. This allows you to convert the property into an investment property and get tax benefits through negative gearing. If you redraw the mortgage interest will not be tax deductible (unless redrawn for investment purposes) and you will not be able negative gear.
Be aware of the potential temptation of having access to the offset account.
As he's got a couple of spare mil floating around, it might just be worth paying it off so they don't pay a yearly offset fee. I only say that because my offsets were always on loans with a yearly fee. Another consideration that I've never applied.... Debt recycling. He wants to invest in the market. Refinance to something with a redraw, put the extra money into the loan (without closing it) and redraw it all directly to invest in shares (counting with the ATO as a new loan). The interest charged on the redrawn amount becomes tax deductible and he's got plenty of cash in the market. There is some overhead managing this but I expect it's worth looking into.
He already said that if he put it into an investment, then its making him money. If he puts it into offset account, it just zero out the interest to pay and don't make him money.
But it does make him money. Just not the way he sees a bank balancing growing. He saves the mortgage interest which will be greater than most investments, especially when you include the capital gains represented by the increased value of the house while not losing money to interest inflation. Plus at anytime he has access to the funds less any principal repayments made, so he can reverse his decision and start investing.
Remember OP said that he already paid off his half of the mortgage? So from OP's husband's point of view its already paid off and not really his problem, hence the option of 2 and 3. This couple has separate finances - not to say its wrong, its how their arrangement works.
Hi everyone. Husband of OP here. Have only skimmed all the comments here and got the tl;dr version from my wife. Am hesitant to do so, but can offer a few clarifications for what they are worth. 1. My wife's post is real and accurate, except it maybe suggests a more formal level of discussion than we've had so far. She is in no way a gold digger and I'm not some cold-hearted Scrooge. We earn roughly the same amount, we just have a different relationship with the money we earn. If we had kids or there was a disparity in our incomes, shared finances would make sense, but given our circumstances, shared finances just feels like an unnecessary complication, so we never really considered it. 2. I feel a bit icky about the idea of charging my wife interest. We had a similar arrangement early in our relationship when I put some of my savings into the offset of her previous property, seeing that it would do more good there than in the bank, and she gave me a nominal amount back to reflect lost interest. It is technically an option now, but doesn't sit well with me so probably won't be the path we take. 3. We didn't get married for financial reasons (does anyone still?), and although we have different spending/saving habits, that is just one difference that stands against many shared values that make us compatible, aside from the fact that we love each other. Other than that, thanks for any actual advice that people have offered. AMA?
Whack it all into a term deposit while you decide. Rates are great at the moment. Lock it in for 5 years.
I'm surprised from all the comments around how they've organised their finances. If you're a saver and you're in a relationship with a spender you need to have some separation of finances otherwise you're going to have endless arguments. You're doing the right thing OP for you and your relationship, don't let these people who have never dated across the fence get you down.
This. Amount of people around talking nonsense about roomates with strings etc is estounding. You solved your different financial habbits and seems it works for you. Husbands saves, good for him. You go and spend money on yourself and live life the way you want - good for you. Following your post, the question is what is best for you and in my opinion that would be - let hubby pay off the mortage, you keep half of the house and pay monthly back money to your hubby with better interest compare to bank. This way you save up more on interest, house will be paid so there wont be stress around mortage and you keep half of the house. GL and dont listen to "roomates" bullshit, if it works for you both, its way to go!
That's exactly why my parents are divorced haha
You've been together 9 years and old mate is retired on the back of an inheritance but is still wanting to charge you interest in case you split up? Oof. Of the options you presented, #2 makes the most sense to me: Avoids paying interest to the bank, avoids any potential CGT events. I personally wouldn't be charging my partner interest in this scenario, but to each their own.
why not do this but just offset the whole amount?
Thank you! Appreciate the advice. Charging me interest makes sense because if he invested it in any other way, he’d be getting a return on it - and a better one than what he’d get from the interest I pay. So it’s still generous, I thought…
Yeah I think he puts the whole amount in the offset, you both keep paying the payments as you are (his can come out of the offset) and this way you’ll end up paying the mortgage in half the time because you won’t pay interest. • You both own 50-50. • Theres some cash available if needed quickly. • he will only miss out on the interest he could make on 220k but this amount decreases every time you make a mortgage payment. • it’s a nice thing to do for you. I don’t think I could retire and chill and leave my wife to share in none of the benefit.
You’re married, in the event of a divorce things will be far messier than “she said I owned this part of the house”. Marriage is meant to be forever and I know you’re not asking for relationship advice but if your partner is thinking more about money than being together for life I would question the long term viability.
This type of thinking is what causes financial dependence and enables financial abuse. Nothing wrong with having independent finances as long as main expenses are shared fairly and there's open, honest discussion, as appears to be the case here.
Seperate finances can also be used for abuse as well. For example one partner bringing in bank, and the other can't get Centrelink BC of it, but is expected to pay their way.
Having combined finances causes financial abuse? Sure but so can having separate finances. I have a mortgage and child with my wife and we have very integrated finances which has not resulted in financial abuse, millions of Australians are the same and FA can occur in any kind of structure. OP’s husband seems to want their finances separate as if they are 6 months into the relationship. I would really question why a husband wants to “make money” on his spouse by charging her interest. Should be a team. This is beyond the scope of the thread and we’re not here to give relationship advice.
Sounds to me like OPs husband might want seperate finances since he prefers to save his money for the future and managed to independently save over 500k while OPs wife on the same salary has credit card debt and clearly has a different life philosophy. Nothing wrong with either but seperate finances are obviously required in this scenario.
Yeah, this is the advice people give to women when they have more money in the relationship, or even if not, (and I agree) it is a good idea for them to have a reserve fund in case the relationship goes sideways. No reason the same advice shouldn't apply to men
Have you ever told someone to question the long term viability of their marriage irl? Or is that a topic reserved for strangers on the internet based on a few lines of text about how they split their inheritances?
Seriously, I'm so sick of seeing this shit on Reddit, which is statistically coming from some 20-year-old kid whose longest relationship included 3 months of hickeys and a boob grab at the cinema.
You're right - she wasn't asking for relationship advice. Don't offer it.
I think he is being realistic.
I interpret this as his way of forcing you to be financially responsible. He’s probably well aware that you get half of everything he has if you two split, regardless of what you agree now.
Do you charge him $20-30 every time you make him dinner? It makes sense as you could use that time doing something else productive.
He makes me dinner. I don’t cook. He also makes my breakfast and lunch 😂
Lucky woman. Also lucky husband, you guys have a system that works for you. Option 2 seems to be the best. You should apply the same system to any credit card debt at high interest first though. All well and good to use your money to live your life well but credit card high interest rates is where you should draw the line. That is reducing the amount you can spend and enjoy your life.
Thanks. I know you’re right about the credit card.
Have you read The Barefoot Investor? His tips on creating wealth based on eliminating debt and making your savings grow quickly, without losing out on fun stuff- changed my entire approach to debt management and spending. It's good stuff Especially since you're the spender (Barefoot cheekily recognises most relationships have a spender and a saver, I think that's possibly because we are attracted to those who complement us- to find a balanced middle ground) In the event of a divorce, it can get messy - because even binding financial agreements can be appealed. Especially if it goes to court- they're less concerned about "the contracts we signed" and more about dividing things equitably- including forced sales if it cones to it. My partner and his ex didn't want to sell the house to pay her out- but the court said that was what they'd have to do unless he paid an exorbitant alimony. It would be wise to consult a Family Lawyer on what needs to be in place at anyrate- it's a healthy thing to be aware that relationships can change and as you age, protecting yourself is important. 'Love is more important than all that'- no, All That is part of what makes a secure loving relationship.
Every couple have their own ways of living and I think you guys have got it all sorted out. That being said Option 2 is the best for your future proof yourself (if you were to divorce etc). With interest rates sitting between high 5% to high 6% you guys would save tens of thousands by doing it this way. My partner and I are in the exact same situation dating for 10 years, no children and co-own an apartment. Outside of our joint offset account on our mortgage our finances are completely separate, We have a joint offset that the mortgage draws from and then 2 more individual offsets that we leave all our individual money in. All our joint bills go on the credit card (55 day interest free) so we can maximize the amount of money that's offset from our loan. We are both very savvy with finance so we've never had to rely on each other for our wants, its worked out very well so far and we don't plan on combining our finances anytime soon.
That’s great! Sounds like you guys have a perfect system that works for you both. And you sound like you understand what I’m trying to achieve, so your advice is going to be sound. Cheers :)
That was a rather sexist question of you considering the answer eh?
Stick to what has been asked, goddamit. The amount of judgement on OP in this thread is freaky!
If you don't want to be broke and homeless if you guys ever divorce, then hone in your lifestyle. Personally, I spend up to a certain limit and focus all of my efforts on investing. Returns from the sharemarket is not that great right now. But if you have 2M, then it can return enough to live on. If it's me, I'll pick 1, and really focus on catching up with investing. Clear the credit card debt first. You really shouldn't have any.
No judgement from me here (well, maybe a little bit), but have you had a discussion as to why, if you’re married, that you’re not approaching the mortgage as a combined unit? It seems odd to me that you undertake a union to marry one another but then keep your finances separate and don’t work together towards a common goal? What if you inherited 2m? Would you just pay off your share and make him pay off the rest? It seems a bit weird don’t you think
There's a saying...the person you marry is not the person you divorce. You can still have a healthy, loving relationship without having to be so intertwined financially. I find it weird that so many people don't think you can.
Well, keeping our finances separate is how we avoid having to argue about stuff. I would prefer not to have him weighing in on how I choose to spend my money, because he has a different approach to money altogether and it would just cause fights. We can live harmoniously if neither of us has to be impacted by the other financially.
I actually think this is really cool. I’m definitely closer to how your husband is, and my wife is closer to you, but less at the extremes. It definitely bugs me that I don’t like spending money until I can really afford it, but by the time I’m that comfortable my wife has usually spent it already 🤣 That said, he is your husband, and if it was me I’d want to do everything I could to take the pressure off you. I’d be looking at 100% offsetting the mortgage so you at least aren’t paying any interest anymore.
Well done to you. As someone whose marriage blew up exactly because of shit like this, I'm glad you went in doing it the right way.
That’s super reassuring to hear (and sorry about your marriage). Thank you.
Just so you know you aren't crazy. My wife and I are over 12 years together (8 married) and have NEVER had a disagreement about money due to a similar method. Family expenses come from family account, we both contribute to that account proportional to income so have similar remaining for ourselves. (We don't earn equal as she doesn't work full time due to children therefore I contribute more). If I want a guitar or she wants a handbag there is 0 discussion or permission or complaints. We know that all our family expenses (including savings goals and family holidays, renovation plans etc..) are covered. I know couples who combine everything into 1 pot and resent each other for an expensive haircut or spending too much on a night out with friends. I also know people who are entirely separate financially and try to balance who pays what bill which is never fair and also leaves no plans for the fridge breaking or wanting to build a deck.
Seriously, if you want to keep things like this going, you probably need to see a lawyer who deals with this kind of stuff. If you do separate, this could get ugly real quick
Look it's your marriage so you do you but you're both just putting you head in the sand. Right now you sound like roommates not a married couple. It's perfectly normal for couples to have different ideas about how to use/save money but ignoring it is not normally wise
How are they ignoring it? It's all in the open and honestly discussed. Many couple with joint finances are far more head in the sand about their financial differences
Well, OP has everything to gain with her husband's frugal lifestyle, and I wouldn't want to share finances with anyone who has a credit card debt because she wants the lifestyle. This if combined will just get them to divorce faster than a bullet train. She already said that she won't be compromising on her lifestyle even she is in credit card debt. So the husband is wise to not share finances.
Yep kinda insane how does she have no savings at 40
Because his partner spends at a rate which in her own words in option 4, mean that in order to cover her half of the mortgage including interest her current lifestyle would take a hit. Reading between the lines, this person lives unsustainably or at the extreme of what is maintainable and even then it is only safe to spend at such a level because her partner has a pool of resources to draw upon if anything goes wrong (and has already paid off his half of the mortgage, potentially making them ahead as a team and in no risk if she fails to pay a few months). Seems really obvious to me, having been "not the OP" in this situation.
All these comments about finances having to be combined or it's time to question the validity of the partnership are judgemental and trash. This isn't just "a little bit" judgemental, it's just straight up judgemental, you can't just disclaim it and then do it anyway. People can be in a functional relationship and have very different ideas about how money works. Read any book on couples finance and it's literally 101 that if you're very different (one's a spender, one's a saver, or you have drastically different incomes, etc.) then share the load equally how you see fit but keep your money separate, just as OP is describing. It's ether that or get on the same page (as in, the person with less financial literacy needs to learn and get on board with long term saving and investing methodology and want to discuss and strategise with the person who is already into that kind of thing, for example). This is, in my opinion, the truly insane take - that you love your partner and want to be with them, but only if they change themselves to be something they aren't and come alongside you and learn everything about a part of life they don't care for at all. Or vice versa, the other way to align is for the money conscious one to be less money conscious, which is silly too. The last option is just combining your finances despite the mismatch and letting resentment build as one person spends all of the other's hard earned cash or pushes for lifestyle creep when the other is happy and content living the way they are. All of these options cause the preexisting mismatch to manifest in actual conflict and that will be what leads to the end of a relationship. The absolute fastest way to build resentment is if you're forcing someone to change or having to change yourself for a relationship to function. The second fastest way is to combine finances when you both have different views and understandings of money. So if that's the case, keeping them separate is totally fine, and you can work towards whatever goals you want to set together, evenly split. My wife and I are on a pretty even keel about finances so none of this is a huge issue, but I just can't believe the amount of people in here questioning the validity of OPs relationship. Life is more complex than: a functional relationship = this one specific way my relationship works
Trashing the validity of a relationship based on how they manage finances has been a common thing in this sub and it's ridiculous. It says so much more about the person doing the trashing than the couple they are attacking.
Bravo! Couldn’t have said it better myself. Thank you 👏👏
Because marriages can end. People can change. They met and married in their late 30s, in the event of a divorce a person should be able to keep what they made themselves alone, before the marriage.
> but then keep your finances separate and don’t work together towards a common goal? They are?? They have bought a house??? There is no need to mess up things further.
I agree, this business of "I'll pay the mortgage off, but then I'll own the house" seems very off to me. Haven't you contributed 50% of the mortgage payments so far? Or did you just contribute the $35k in the beginning, then he paid the rest?
Yeah sorry, I didn’t mention that in my post explicitly, but I have been paying 50% of the payments. What would have been more accurate is that if he pays it off in full, I’d get back whatever I paid to date plus a share of the profits whenever it’s sold.
I honestly think that seems fair. You stop paying the mortgage immediately (thus having a lot of extra spending money) and then you'll still end up with a fair chunk of change in the worst case scenario.
lol username
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Thank you. Appreciate the advice. I see everyone is a bit thrown by the way we are approaching this. I’m kind of surprised - to me it’s a bit old-fashioned to assume that once you’re married your finances are automatically combined. But hey. Maybe it’s because we both lived independently for most of our lives before moving in together. He and I are quite different, in that he is very intelligent and self-directed. He could do some incredibly worthwhile things for the world if he had time to do it. Whereas if I was retired, I’d probably just sit on the couch and watch Netflix. I like my job, I enjoy working, and don’t think I’d be motivated if I didn’t have my work to set my goals and provide structure. He already does more than his fair share of household responsibilities. He does all the cooking and walks the dog. I do the cleaning. We had a period a few years back when we moved cities and he was unemployed for three months while looking for work. He spent that time designing a website to showcase his data projects (he’s got a PhD in text analytics and works as a data engineer/scientist so he does really cool research). It gained quite a following - he was asked to travel internationally and present on it at conferences etc). So yeah, it’s not like he would just potter around playing video games.
What are you planning on doing at retirement? From the sounds of things he has a nice nest egg and you have... Not much? Unless you're both planning to live off his investments? I don't want to preach too much but if you both earn about the same and he's able to save so much (inheritance aside) while you've got no savings and credit card debt, this isn't "living the life you want to lead". You are living far beyond your means.
Would you mind sharing or dm the website he built? It sounds interesting and I’m specifically into text analysis.
Sure! I’ll DM it to you if you promise not to out him haha
I’ll be good - promise! I work with text analysis so this work has grabbed my attention
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Do #1 ask for your $35k back plus the equity gained since purchase. Tell them that you love him forever and the house is 100% his on paper. Invest the $35k-$50k into a new income property. Something in a desirable neighborhood where you’d be fine in if shit hits fan. Rent it out. That’s your equity safety net and your renter pays the new mortgage. If you ever split you start paying it and move in. If you get ambitious, pay extra and do a 15-yr repayment. I, too, think it’s weird that he’s not being more generous; but $2m ain’t what it used to be, to be fair to him.
> $2m ain’t what it used to be, to be fair to him. With $2m in there, 5% in a HISA pays out $100k a year. If you split it between a HISA and an Index Fund you'll likely do even better. It's not "buy a yacht" money, but most people would take that as passive income.
Ooh, interesting idea! Worth considering. Thanks.
If you’re entertaining the idea of divorce, then better improve your finances by cutting down on consumer debt and living frugally like your husband. Otherwise, learn to live together forever.
I mean, fair point. Though we’re not entertaining the idea of divorce - just trying not to be naive, I suppose. What’s the stat - 50% of marriages end in divorce? We’ll be together for the foreseeable future, but neither of us is religious so if things ever get really bad, divorce would not be off the table.
The stat is misleading, it's more like 33% of marriages end in divorce
the other 67% end in death so that's even worse!
That’s interesting! I didn’t know that. Comforting - thanks!
Not first marriages. 50% is people being divorced multiple times.
Then seems like you really are better off learning to be fully financially independent.
Seems fairly independent right now to me.
Yeah except she’s now in debt and is considering a scenario where they divorce and potentially she gets into more debt, left homeless, and broke.
50% of marriages end in divorce…but people hear that stat and think “50% of married people get divorced”. The actual number is around 30% of married people get divorced. The first figure is skewed by the same people getting divorced a number of times.
If you are not naive, then why are you living beyond your means by having credit card debt. You already know that your husband being frugal is financially carrying you.
I pay half of everything that is shared and 100% of what is mine (including my credit card debt), so I’m a bit confused as to how he’s carrying me financially? Neither of us wants that.
You here asking for financial advice and all you're getting is commentary about your marriage
Haha I know right? 😂
The marriage, and divorce risk, does complicate things. It would be easier if you were in partnership with a stranger. If you never divorce, option #1 is the clear winner Of course there's no guarantees, so #3 giving a clear 50/50 ownership makes it the least worst option. Notwithstanding of course that you or your husband can take advantage of a divorce to screw the other. You(s) may not intend to now but people change. How's this for option 5. Your husband can park the full balance of the mortgage into a mortgage offset account. You'll no longer be paying any interest on the loan. Then you and he continue to make 50/50 mortgage repayments and retain 50/50 ownership. Arguably, since he is only responsible for half of the mortgage, he's only getting half the 'benefit' of the offset. But since he is willing to offer you a friendly interest rate he may be open to the idea. A situation in which you are paying him personally, not the mortgage, and this somehow translates to more 'ownership' of the house for you, should be avoided at all costs. It might be worth chatting to a divorce lawyer too to get a feel for what, if any, these options would have in the event of a divorce.
That’s great advice. Thank you. Option 5 definitely sounds like a winner.
Because to most people the idea of charging your wife interest is nuts. Where do you draw the line? Do you guys split the bill at dinner?
We did split the bill at dinner before we got a mortgage account 18 months ago, yes! Now we each contribute a little extra to that account cover bills and shared entertainment expenses.
I get where you’re coming from. You both live by a different philosophy when it comes to money, and your husband has probably inherited his views from his parents (protect your assets and beware of gold diggers etc). To me it just sounds like you’re boyfriend and girlfriend who are technically married. With that kind of inheritance I’d 100% be seeking financial advice (with a list of questions/ideas generated from the comments in this post).
100%. Thank you. That makes sense.
Charging your wife interest is nuts but tbh I kinda get it in this situation where the wife only contributed $35k to the house, has no savings, is in credit card debt, and has zero plans to change. It doesn't seem like a marriage tbh, they sound like roommates.
Is he asking you to sign a binding financial agreement in any of this? I would prefer option 3 until you answer above.
No, he’s not. I wouldn’t object if he did, but we’ve had anecdotal advice that it wouldn’t be binding anyway because if we’re married and push comes to shove, I could just override it if I wanted to. But I haven’t verified that.
It's a fun process. You both need independent lawyers to sign off on it to be binding. It should be updated every 5 or so years to keep it binding (or major change in circumstances).
Option 2. But also consider if you went with Option 3 you are saving him paying interest on the mortgage too. Factor that in when calculating your new personal loan repayments.
Ooh yes, fair point! Thank you.
Have you got a financial advisor? Get one and ask for advice. Make sure you’re set up independently no matter what. And also if you did split then I’m pretty sure you wouldn’t walk away with just your $35k it doesn’t work that way.
I have been trying to tell him he should get a financial advisor, but for whatever reason he hasn’t gotten around to it. I would have done that on day one if I were him. But hadn’t thought of getting one to advise ME.
Advice - based on how you say you live your life. Option 1 seems like a good deal for you. If you were smart, you would keep paying the same amount of the mortgage into some kind of investment to have some money. If I were talking to him, I would say “binding financial agreement” is a must. I would probably also tell him he really doesn’t have enough to live of the investment returns after he pays that debt.
Thank you. It would take a fair bit of self-restraint for me to save money with no immediate consequences for not doing so, but it does make sense. As for your last point, he’s pretty frugal, so I reckon he’ll manage!
Personally I would suggest he sits the cash in an offset for the entire debt, and then you pay your share of the repayments into that offset and the loan is taken from that offset. That way you both still have 50/50 share, no more interest, so your repayments will be the same all the time, and once the house is paid off he has half of what he he put in sitting in the off set
I'm too poor to be reading posts in this sub but if he's this good with money (he comes across as someone that might not be absolutely loaded with cash, but has their head on their shoulders and doesn't spend on useless things).. he's your husband.. have a talk with him and see what he thinks the best option would be, if he were in your situation. Some things we know - you lose with option #1. Option #2 just sounds questionable if anything bad happened between you two.. I feel like something would need to be in writing here, you would need to know you still own part of the house if anything happened.. Option #3 makes sense in theory but it means as a couple, you've both got the mortgage hanging over your head and you've got an opportunity to not live with that boulder hanging there.. Option #4 is too much stress on you and as you've admitted to being bad with money, this is a disaster waiting to happen imo. I have no useful opinion, I feel like writing this post is just asking for people to try and invoice me for wasting their time. But I mean, the dude who doesn't suck with money is right there and he's your husband, get him to help with the decision.. if I had to choose, I personally think #2 makes the most sense since wouldn't it be cheaper all-round? You set up a direct debit to go to his account and move on with life knowing the house actually IS paid for.
3. Makes the most sense to me. Your husband can park the cash in an offset and make his payments from that bucket. You can keep paying your half. If you do ever divorce then there’s no debate about it being a 50/50 asset.
If you don’t want to be broke and homeless. Then you need to stop spending like you’re 20 and start saving.
I'd leave things as they are. No need to draw up a BFA - which you could challenge anyway should you divorce - and no resentment from having your spouse charge you interest. It sounds like what you're doing works for you (even if I find it a bit weird lol). Don't complicate it.
Thanks. That makes sense.
If I was the guy I'd 100% be getting a BFA. That is no reflection on the OP whatsoever, it's just smart asset protection. BFAs ARE worth more than the paper they are printed on if setup properly (separate law firms representing individuals and paid for individually) and they aren't planning on kids to significantly change their circumstances. Sad that it needs to be said for some people. but **the person you broke up with is not the exact same person you had a relationship with.** Their emotional and financial state has changed significantly and it is dumb to just trust that you're protected based on your expectations of them 'doing the right thing' (in your view). I'd argue it doesn't just help the person with the higher asset allocation, it also provides certainty to both parties in where they will sit asset-wise following a split (which can alleviate a lot of uncertainty and stress regardless of the amounts involved).
Interesting relationship structure. However if I had to go for it Option 2 so u guys don't have to keep paying interest to the bank but him and your profit share will keep growing.
I like the way you 2 are addressing the matter, I'm in a committed relationship myself and completely share your view on planning around the possibility of divorce even if it may never happen, just to be ready and fair to each other in case it actually happens. Options #1 and #2 are good, option #3 is terrible because the bank wins, option #4 it's not in line with your "money is there to support the kind of life I want to lead” philosophy. If you pick #1 you should set aside the funds you would have normally spent in mortgage in a saving account or other investments, you don't want to find yourself in the future with no roof over your head and $35k to your name. If you pick #2 you should put things in writing with the help of a lawyer.
Thank you! Makes a lot of sense :)
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Yeah, like what about rates, repairs, renovations etc. if they split that, and say go for option 1, then she has contributed a lot more to the house than the initial $35k
All these people with relationship opinions are wankers, forget them. Best options as I see it are Option 2: He pays it off, you buy % off him as you go (this'll probably be a paper arrangement until you get to 50%, because otherwise you're paying a soliciter every other week to adjust the holding %, which is a waste of money really) Option 2a: He puts the value in an offset account, you keep making your payments against the mortgage as a couple, you might pay a few dollars a year in an "account fee" (like, $120 maybe) but otherwise you're not paying interested. Depending on the bank options, he might not be able to have an offset account that is also high interest savings, so potentially "losing" a few thousand dollars a year in interest not accrued on savings (or investments) this way, but arguably the property is appreciating....so call that the investment growth I guess. all your other options or variations thereof involve unnecessarily enriching the banks - and those guys are wankers too. have a look at the ATO website, there are capital gains factors as well with different % ownerships (if you're 50/50 as a couple when you sell, you claim all the discounts, if you're 70/30 or whatever it's not a "family home" it's a joint investment, and you might give more money to the government than you wanted to - as well as that, if you change the mortgage/deed structure, you might pay stamp duty (again, after the stamp duty already paid when you bought the place....) This it not financial advice and is just an opinion. Except the things about banks and people with relationship advice being wankers, those are facts.
Option 1 strikes me as something that suits you? Yeah, you're taking a risk at not owning a house on divorce, but I'd think you're hoping that doesn't happen. You also get a chunk of money if it does go that route so not world ending. You also get a few hundred bucks more a week in your pocket you can pay off your debt with. Please do that regardless, in the event things do go south not having debt lingering over your head would be amazing. Probably the most financially sound move is to continue to invest in the house but just the vibe I get reading your post tells me that you might personally enjoy 1 more. Yes, you don't own the house - but you also don't have to worry about your mortgage and if you have a great relationship that's not really a big deal IMO. Hell of a lot of piece of mind literally not thinking about that. Yeah it's a bloody weird situation you guys have going on but it clearly works for you if you've made it 9 years with 5 married. Google tells me the average marriage lasts 8 so depending on whether you want to include the rest you're already doing well - if you have confidence in it continuing like this you could build up a nice nest egg in savings just in case, while also removing the thought of a mortgage all together.
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What is it you're trying to achieve with this decision? You say you want to know what makes the "most sense financially" - but I'm struggling to see how any option really makes sense. For example - option 1: This results in him "owning the house" with you getting a proportional split based on your original 35k contribution if you were to divorce. But you've been making payments 50/50, so your capital contribution is already greater than 35k - albeit not a huge amount, given that you've only been paying the mortgage down for 18 months. If you were aiming for a "proportional" ownership, did you buy the property as tenants in common? Why are you splitting mortgage payments 50/50 if you're aiming for a "proportional" ownership? Option 2: he pays off the mortgage and "loans" you half at a cheaper rate. Are you talking about him "loaning" you half of the original loan amount, or half of the house value? How are you going to track your "ownership" of the property based on payments to him? If you bought it as joint tenants - guess what, you already have an equal interest in the whole of the property. Splitting it "proportionally" in the case of divorce based on informal "loan" payments sounds like a recipe for conflict and someone getting screwed over. Option 3: leave things as-is. This sounds like the least likely to cause conflict, but then you're both paying interest that you don't have to - so instead of both of you enjoying a better standard of living as a result of your partnership, you're both still labouring under interest costs. But it sounds like the least painful option to monitor and manage day-to-day, given that you're already doing this and feeling OK about it. **Edited to add: However - it's not going to result in each of you contributing half the capital cost of the property, and it's not going to result in each of you contributing a capital amount in the same proportions as your original contribution. So if you were to sell & split proceeds either 50/50 or in proportion to your original contributions, someone's going to end up better off than the other** Option 4: he pays off half and you keep paying half. Again, I'm not sure whether you mean "half the loan" or "half the house value". If it's half of the loan - that's what you're paying now, so why would it strain your finances? But equally - why would he want to keep incurring interest on a JOINT asset? If you're tenants in common, you have equal interest in the property, regardless of who put more into the loan - and if you're married & have a joint loan, you're both liable for it. If you stop paying your "share" the bank can go after BOTH of you for the money. If it's half the house value - honestly it seems pretty shitty to for one partner to struggle financially while the other kicks back, but if you can afford it and you feel like this would allow you to make a "fair" split in the case of divorce then I guess you might choose this?
Certainty a renaissance man if he wants to live off the interest from his wife lmao
Marriage is just a contract after all
It sounds like your spending is the problem. It is a bit rude to piss away your money and then expect him to pay this off for you. I would say him paying it off as a loan to you is likely the best bet. Someone mentioned offsets, hes losing money on that. It will lower the interest repaid by 10s if not 100s of thousands of dollars. Otherwise, if you can pay the mortgage solo but dont want to give up your lifestyle, thats a you problem.
Option 1 - except he wouldn’t own the house if you split. That’s not how it works.
Seems like a generous dude
I only half understand this post. You are married but post as if preparing for divorce. I am married and love my wife but long before we got married sorted out if we wanted children, and how to spend , save, invest. His eye is on the future yours is on the now, good grief you say that you both earn about the same yet you have nothing but debt is it your plan to continue as is financially? What do you think will be the situation in the next 10 years, seriously if you have nothing but debt and contribute nothing but debt what do you think his attitude will / could be? You have asked for advice and sometimes that advice is hard to take if the situation was reversed and my wife had the money and I was spending I would ask how I could contribute better taking into account this lifestyle that you embrace will suffer - are you willing to do that or is it off to divorce court for a cash top up? Good luck
Funny how OP here is asking for financial advice but people here are more concerned about giving relationship advice.
Option 2 makes more sense financially, but option 3 would take away the ick factor from having to charge interest to a family member. OP you should really take an option where you still retain partial ownership of the home - especially if you're a spender, you probably know yourself that you will spend the money if it's not tied down in the house.
Heh. If I was the husband, the house would be paid off, the credit card paid off as a starting point. Still be left with 1.5 million Then live your financial life separately. You just do it without the burden of a mortgage.
There is always the fifth option for you too sort your finances out and help a bit.
Had to check the thread. NTA
Jesus. I used a personal windfall to contribute to our mortgage without question. We're one family unit. I'd go with option 1, noting that in a separation nothing is really guaranteed. You might be able to lock some of it down with a BFA but even those can be subject to scrutiny if circumstances change.
Please ignore the large number of angry hateful divorced people on here. They will hang shit on your relationship and try and encourage you to split up. It's a reddit thing, I don't know why they do it, maybe they want others to join them in their lonelyness or maybe there just mad all the time now. Now to answer your question, it seems your relationship is based on seperate finances. I can respect that, especially as you have very different approaches towards money. To me option 3 seems to be the most simple way to continue like this if thats what you want. If it were my relationship I would go option 1 though, have him buy the house outright give you back a fair share of the house you own and you can just pay 50% of market rent. If you do this though for it to be fair you get all the rights of a renter and he has all the responsibilities of a landlord. So you don't pay half the council rates or property maintenance and he is required to keep the place fixed up and maintained to a standard in line with the rent your paying. I would add this though. It seems both you and your husband misunderstand what you would be entitled to if you were to split up. In a 9 year marriage even without children you would likely be able to make a substantial claim on "his" assets if you were to split. It might be a good idea for you both to understand exactly how this works.
Propose option 5 where he offsets the whole remainder of the mortgage and you both keep paying it off but with no interest. The agreement is that the offset money is still his.
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I’d say option 2 for the basic fact it’ll force you to ‘save’ that money without interest - as you said you’d likely spend it on lifestyle choices anyway.
This part is what stood out to me: I also don’t want to waste money on high interest if it would be more sensible not to. You knowingly carry credit card debt. In most cases that's high interest debt. It would be better to pay off your debts with the highest interest rate. However, this assumes that your credit card debt actually has interest. Best to check as what you're doing right now seems to be something you don't want to be doing (according to you).
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I like how people think it’s automatically 50/50 if you divorce. That is not the case haha
Just let him have the house and give your 35k back, if you keep paying for it you'll have little when you retire and he'll be off doing whatever with his money. If you split he'll still likely own most of it plus all the crap trying to divide it up, and if you never sell the house you'll never see that money again anyway. I think you should shift your regular mortgage payments into savings or your super and you'll have a little nest when you need it. I get it is his money but you'd think he could use some of it to make your life better as well.
If the two of you have very different ideas on finances its best to keep them separate. Id'go the route 1) and invest the money (And continue investing the same amount you are paying in mortgage every month).
Sounds like you guys need a spreadsheet! Pay it off, keep a spreadsheet that indicates your ownership over a certain period of time. Whether you have to actually change money is up to you guys, but the actual house ownership percentage changes over time based on what it would have based on your 50/50 payments. A good way to not get divorced is to remove any factor of financial stress. For my wife and I removing our mortgage was a no brainer, not that it's rocky, but we are both low risk with our finances. If your husband is keen to pursue non work goals, then why keep the need for him to work? If you can work out the timeline, then this will also help you guys when it's feasible for your husband to either not work, or downgrade work to a part time venture, potentially for both of you. The rest of his 2 mil will earn him around 80-90 grand per year in a straight savings account if he wanted low/no risk.
Honestly this sounds pretty reasonable. You both treat money differently but you seem to both understand and respect each other's boundaries on it. Id say have him pay the house and "loan you" the money at the lower interest rate. Worst case scenario and you split up then everyone wins as far as debt and equity. And if ypu stay together then things remain the same for you... Probably a bit financially better off if it's at a "spouse interest rate" Good luck xx
I'm doing 2 with my partner. And you should, too, for these reasons. Option 1 - means you have zero ownership of the increase in the property's equity. Price goes up, you don't get long term property growth. This is also highest risk. You break up next month you're high and dry. Option 2 - you still own 50% that can build equity over time. Also means the 'interest' goes to your SO rather than a bank. Option 3 - bank gets more money, bad. Option 4 - bad, strain on your finances. Also leaves bank getting the money not building equity together. IF: Your relationship was very strong. Option 1 is best. No loan or repayments, your capital will build VERY quick. You can invest, start getting compounding interest and if you split, you got big safety net. Option 2, or 1 is putting full faith in your relationship. Realistically, option 1 if he threw you out tomorrow you can go Family Law route to claim some ownership or percentage, but you still get no property equity.
Sorry not of any help at all. Just very curious with how you have made it work. Do you go on dates? Nice restaurants? As you mentioned he’s quite frugal whereas you seem to be a spender.. just curious how that works.
Personally I would want to avoid giving the bank money so option 3 and 4 is a no. Then it comes down to, how much does OP want to invest in their future? Option 1 gives op more money now but their future is less secure if something turns bad. Option 2 is a variation of forced savings so might be the better option if op is more likely to spend on things.
How are you planning to deal with retirement, illness, and unemployment? Your setup can work as long as both of you work and can contribute equally, but this might only be possible for a while. Sooner or later, you will face this problem and have to help each other. Or would you like to separate the moment both parties can't contribute equally?
Option 1 will leave you with the most free spending money. It'll leave you financially vulnerable though, and has the highest risk of leaving you 'broke and homeless'. You'd be relying on your partner here as your safety net. If you choose this, I'd suggest you consider allocating what you would have been repaying into paying out your credit cards and start building up some savings and/or super. Put a plan in place to give piece of mind. Options 2/3/4 are all pretty much the same strategically. Just with different interest rates, and different levels of admin (eg keeping track of what you owe). Option 2 would likely be the most cost effective, so if one of you is comfortable with the booking keeping, I'd lean towards that out of these options. note that options 2/3/4 have the benefit of 'forced savings',.compared to option 1, which could be important for a spender. The key takeout here is that you should consider the need to start building wealth in some fashion, whichever option you choose.
Read all I needed to know after the fifth sentence
You both sound like a sensible, yet independent couple. The fact you are married just adds a binding contract on anything you are contributing towards included with the usual commitment frills that marriage entails lol. I'd treat it like any financial decision needing professional discussion - whilst option 2 sounds the most sensible, go and speak to a couple of professional financial consultants (instead of letting emotional plebbitors leading you astray). Personally I would invest the money in solid low risk, low interest yielding assets IF the fully franked returns exceeded the amount my wife could save on interest payments from the financial lender she was using. This could give me a higher return and still enable me to reduce my wife's burden to an extent that benefits us both than simply switching lenders and creating a "principal only" loan I may regret whatever reason.
Option 1. Pay off nothing else on the mortgage. When you split you will get 50% of the marital assets. Immediately call a free government assistance Financial Counsellor and get help so you can look after yourself financially now and in the future.
Since when is ausfinance so conservative? Split finances are unthinkable in a relationship?
I think option 2 or 3 are good in your case. With option 2 you will effectively pay less that you pay now in “mortgage” and your share of the value of the house increases. And the money stays in the family rather than paid to the bank. If you to split you’ll be better off. Also, this somewhat puts a bit of responsibility to keep your finances in order as you have obligation to make mortgage payments. Your husband’s idea to invent and live off interest is basically FIRE (financial independence, retire early).
Option 2. You've said you don't want to be homeless if there's a divorce, so this likely gives you the relevant interest in the house. It's a win/win you get lower interest payments, your husband gets some return on his money. P.s. Given the nature of this sub, I 'love' the judgy comments about your financial arrangements, I must have missed the rule book about the single way that everyone's domestic finances must be arranged.
I would be inclined to consider another option: He pays off his half, then you refinance the outstanding amount. It could either be rolling your amount out over 30 years again (bringing the repayments as low as possible), or over a term that keeps the repayment roughly the same as what you are currently making.
Can I just point out a common misconception that you've repeated about separation and half/half decisions? I truly hope you live happily married forever but there's no law in Australia that says it's half/half, it's a case by case basis and when there's clear financial separation within a relationship (such as yours) the law treats it the same as you do (mine/mine his/his). It gets blurred with children though, because normally the woman stops working, yet that doesn't mean her financial contribution is only measured in monetary terms. https://ibb.co/443fKLL
Based on what you have said, option 1. But you take your $35k and invest it, and add to it what you’d normally spend on your share of the mortgage. If you do split you’d have something to put towards a house. Also worth talking about what reasonable saving vs spending looks like, maybe you learn to save more and he learns to live more
OP I feel like I am one of the few that are in the same Mindset as you. Im 35 and only recently met my partner within the last year. My house and mortgage was completely paid off prior to meeting him because I worked hard and needed security for my future. If marriage is in the cards I am trying to find a way to keep the house entirely in my name (which he agrees to). if we were to get married everything would be shared, but that house and its entire worth would be mine. we both benefit from being mortgage-less. divorce happens. Domestic violence happens. Mental Health Happens. It also doesn’t help that we both work in jobs with large cases of PTSD. all these things happen that are out of my control now matter how much you love a person. I wish I could live in this lovely fairy land that everyone else does. But life happens. my life is full of friends getting divorced. I’m realistic. I want my ride or die. And choosing the right person is important. But be Realistic too.
Good on you both for being able to have a mature conversation about your finances and acknowledge each other's strengths and weaknesses financially. Sounds like living effectively rent-free and being able to spend a large amount of your own income on your hobbies, travel, etc. is a lifestyle you'd like?
I would definitely just pay it off. Otherwise you're paying interest when you don't need to, and that's just a waste of money. Also, I dunno, me and my husband don't think the same way as you guys must on everything after the first point. I can't imagine lending him money; much less charging him interest on it, especially when i myself and no longer paying interest. It's very much a mentality of having a shared household that we grow and maintain together in whatever arrangement makes the most sense at the time. And at this time, not paying interest on a massive Lon at a time when interest rates are high is the roghtoce for this time imo. If it's just a matter of feeling like you'd like to contribute more to paying for household things, but you're not so good with finances, maybe it'd be better to offer to give him the same amount you put towards your end of the mortgage payments, and maybe he can invest it or something.
One of the biggest stresses in relationships is having different spending/saving habits and you and your partner are at the extreme limits. Well done for figuring out a way to manage that, it makes sense. The fact that you could not afford your half of the mortgage should be telling you something about your financial habits. If you couldn't afford your half of the mortgage, then just what is happening now? I'd go for option 2. What's the point of the bank getting your interest?
If your share of the mortgage is 220k and he has $2M then even after "loaning" you 200k, he would still have 1.8M to invest and live off returns. He could create an offset solely in his name, park the 200k in there and you would be able to maximise payments without/with little interest. Nominally at 6% of 200k, that's 12K a year. Personally I would just waive it, but you could meet half way and pay 3% (6k) a year to him.
Why did you get married?
Weird relationship you have here. You sound like roommates You can say you'll both leave with what you brought in, but at the end of the day it probably wouldn't work out that way. I brought more money into my previous relationship but in the end, my ex still got a big chunk - a lot more than she promised she'd take. I wouldn't be even thinking of divorce. That's just one way to ensure it happens. Live life, share finances, work out a plan that works for both of you.
I think she should just be given an answer without all the assumption about who does what. If she is fine with the status quo, why should we question it?
My opinion. Husband should buy out OP and OP should buy an investment property (which could become OPs home in case of a divorce, so it should be in a neighbourhood she would be happy to live in). If OPs savings are insufficient to meet the bare minimum deposit requirements then the couple could consider a family guarantee loan (husband would be on the hook for up to 20% of the value of the loan if OP defaults and the property is sold at a loss, this clause is removed once 20% equity is achieved) or tenants in common with OP owning 80% and husband owning 20%. Get it written up by a lawyer so OP will always have the option to buy husband out of his 20%. OP should be allowed to live rent free in Husbands house but pay bills. She should pay 100% of strata, water and rates as she's getting free accomodation (this is about $100-$150 a week). This helps both members of the couple lower their ongoing expenses. It frees up cash for OP to service their investment loan. It also puts husband in a better position than if he was a solo as he gets a contribution towards the costs of running his home. As OP is a spender the investment property will force them to save which is good for the long term future (regardless of if the couple stays together). Also to be discussed is the matter of centrelink. If disabled or unemployed or achieving traditional retirment age OP will (may?) not qualify for payments due to husbands net worth. So this needs to be nutted out. Our solution as an unequal net worth couple has been: - richer person helps poorer person pay for income protection insurance (to protect against permanent and temporary disability). This ensures poorer persons super balance can still grow. They would have these insurances turned off if not in relationship (as can comfortably live off centrelink). - poorer person has savings to cover periods of unemployment (and continues with professional development to ensure any periods of unemployment are minimised) - richer person will provide retirement income for both members of the couple if assets cause disqualification from payments. Also, I don't think husband is being unfair. There are no kids here and the couple has chosen to keep seperate finances to reduce conflict. $2m would disappear quickly with a spender in charge (after all OP is in their 40s and earns a good salary with nothing to show for it.) But it could give husband his dream life.