couple

Forget the stereotypes!
A look at modern family finances

How does a typical modern family manage their finances? Here, we look at four very different setups – any of them ring true?

Family portraits have changed over the years. Gone are the days of formal paintings hung over the fireplace of a 2.4 setup; dad’s hand resting firmly on son’s shoulder. These days, you’re more likely to see a colourful selfie stuck to the fridge.

These portraits have evolved over the decades, and so have the families that feature in them. In fact, the definition of a ‘standard’ family (with the father as breadwinner, mother as stay-at-home housewife and two cute little children with a couple of years’ age gap) is a pretty outdated view.

What’s the modern approach?

With 18.7 million families in the UK in 2015*, there’s no ‘regular’ anymore – so when it comes to finances, there’s certainly no blanket solution. Each setup is different – each has ways of managing their finances that work (or don’t work) for them. Whether it’s a ‘what’s mine is yours’ scenario or more of a ‘what’s mine is mine’ approach, there are always ways of evolving your family finances to ensure you reflect your ever-changing situation. Here, we find out how four families make it work. Can you relate, or take some inspiration, from them?

I’m lucky that I’m with someone who was open to the idea of being a stay-at-home dad.

Lisa, 40, is a copywriter, and her partner Tom, 46, is a communications officer. They have two children aged 7 and 3.

coupleWe opened our joint bank account nine months after our son was born. During my maternity leave we had separate bank accounts but I quickly realised that I didn’t enjoy relying on one income – especially when that income wasn’t mine.

So that’s why I suggested opening a joint bank account when I went back to work full-time and my partner took over the day-to-day childcare while setting up as a freelancer. We knew that Tom’s income was taking a serious blow so one bank account seemed the obvious choice. Seven years later, we still have a joint bank account (and another child). It’s the only account we have and is used for everything – salaries in, bills out and everything in between.

If I was asked, I’d say that Tom is more frivolous and I am more frugal when it comes to money. But that was probably more the case when we first met. These days, our financial behaviours have rubbed off on one another and we are more evenly balanced in our approach to spending and saving.

One thing we have neglected up until recently is our pensions. We’re both in our 40s and now feel like we’re playing a risky game of pension pot catch up. My one regret is that we didn’t start a pension earlier. Although, on the plus side, our 20s and most of our 30s were a whole heap of hedonistic fun!

I like the idea of spreadsheets but not the practice. We manage our finances by keeping an eye on our account during the course of the month. If it looks like we’re spending too much we (try, at least) to rein it in. We are pretty organised when it comes to the kids and both of them have savings accounts. Even though they are still young, we are aware of the cost of tuition fees if they choose to go to university.

We do try to save what we can and have put money into ISAs in the past. Our savings aren’t huge, but it all counts.

When it comes to joint finances, trust and empathy are really important. Now that I’m working three days a week I’m not contributing as much income as I have done in the past, but it’s all swings and roundabouts. I’m lucky that I’m with someone who was open to the idea of being a stay-at-home dad – even suggesting the idea himself. Many of my friends didn’t have that option.

I think we're unusual in how 'fluid' we are with who pays for what, and genuinely not caring if one of us pays a little more.

Ben, 44, is managing director of a marketing agency; his wife Christine, 39, is regional director of an international recruitment consultancy. Ben has one daughter, aged 20, from a previous marriage.

coupleWe don’t pool our finances, but we don’t have completely separate finances – we have a hybrid of the two. We’ve kept our separate bank accounts, pay our own individual bills (like mobile phones etc.) and have our own spending money and savings.

We split joint bills (like the mortgage and utilities) 50/50, each of us paying some from our individual accounts. As I have less of the joint bills going out of my account, I transfer the difference to Christine each month. Weekly grocery shopping is paid by Christine on a cash-back credit card and then I transfer 50% when we settle the bill. In terms of savings, we both save an agreed amount towards holidays.

We've kept some separation because I've always had financial responsibilities from my previous marriage – initially maintenance and in recent years, costs associated with my daughter (education, transport, medication due to a serious ongoing health issue etc.) which I wouldn't expect Christine to split. She also has a shoe and clothing addiction which she wouldn't expect me to part-fund!

Because Christine earns more than I do and has less financial responsibilities (when we first got married, my daughter’s medical bills were running at £1500 a month!) she tends to cover the little extras as we go along, like eating out or the odd night away at a hotel. She'll also cover a few ad-hoc bills on the house if we've not planned and saved for them as she can lay her hands on some cash quicker than me.

Christine’s always been more frivolous; she has more income, and less expenses/responsibilities – plus that's her natural personality. I'm naturally more cautious, coupled with less disposable income. However, the longer we've been together the more we've met in the middle: I've learned to relax and live a little, and she's learned to curb her spending.

Apart from the equity in our house and the ability to downsize later in life, we don't have a proper pension plan and we definitely don't make our current incomes work as hard for us as we could. We need to get a structured savings/investment plan sorted ASAP and commit to it.

I have a spreadsheet so I plan my finances, savings, expenditure etc. about 6 months in advance and adjust monthly. Christine works out how overdrawn she is at the end of the month – if it looks good, she transfers to savings; if it's bad, she takes some out of savings to cover it!

We both save money for holidays, unseen costs (house/car etc.) and longer-term goals most months, but not every month. I generally save a little, she saves quite a lot. She's very good at saving a lump sum when she gets a bonus from work a couple of times a year. I think we're unusual in how 'fluid' we are with who pays for what and genuinely not caring if one of us pays a little more. I guess that's easier with two incomes and being at a stage in life where we're not stressing over every single penny, especially now my daughter has left home and is (virtually!) paying her own way.

James, 33, is a business strategist; his partner Michelle, 32, works for an independent retail shop. They have one daughter, aged 4.

coupleWe definitely have a ‘what's mine is yours’ approach. Although we earn very different amounts of money, we actually just believe in it being one ‘pot’. That way it feels like you can be much more accurate with budgeting and understanding all the outgoings. 

We found to get to this point we had to stop thinking about money being individual and that actually it’s a collaboration towards joint goals. However, the shoe is on the other foot on nights out. I tend to be the one who will pay more for the nice meal or will overspend on an evening out, whereas she is much more conscious of the cost of everything. I get out of an evening and suddenly believe I am a millionaire!

We've tried to write down everything we spend – even small consumables or general things, but you lose track when rushing around and you find that hundreds of pounds have somehow gone missing. You know that you or your partner must have spent it, but you don't know what on and why. I'd like to be able to track everything more efficiently, to see the exact breakdown of all our spending.

I do use the good old spreadsheet. I’ve tried other methods (apps etc.) but that seems to be the best ploy currently. I tend to use my gut as a pretty decent indicator of overspending, too. We make sure we save each month – we try to work with the policy that actually if you don't save it feels a little like you’re working just to live – not to move forward. We try to save the same amount each month as it builds funds towards something else.

The thing about us is that we never really limit each other. Although we make jokes about it, we’re pretty relaxed when it comes to each other’s spending habits, to the point where we never really restrict ourselves (within reason) because this tends to breed resentment about money, and we both hate that. We know we have to be conscious of what we spend, but at the same time like to at least give ourselves the feeling of liberation – just without a millionaire’s budget!

Cathy, 59, works in admin at a university; her husband Greg, 63, is retired. They have three children, aged 28, 30 and 33.

coupleIt may be an old-fashioned view, but when I said my wedding vows I committed to sharing everything I had with Greg – and vice versa. The younger generation seems to be more comfortable with being independent, but Greg and I come as a package.

We’ve been married 37 years this year, and since that day all our money has been each other’s. I can’t imagine it any other way.

I am coming up to retirement and Greg is already in retirement, so we’re currently thinking about where we are in life and evaluating where we want to be. We have a holiday home in the south of France and thought about moving over there permanently, but our eldest daughter has recently given us our first grandchild, so our priorities have since shifted.

Thanks to a mixture of good planning and good luck, we’ve managed to save quite a bit to allow us to help our grandchildren (we are hoping that more will come along!) in a way that will have a positive impact on their lives – from buying their highchairs and all the other baby paraphernalia to helping with childcare costs and university funds. We were lucky to have invested in property in the 70s – as everyone knows, house prices have increased a great deal since then.

We’ve also been quite sensible and contributed to our pensions for years to try and give us a lifestyle we can enjoy now. My husband would like to spend it all on holidays and eating at fancy restaurants, whereas I am a little more sensible. Saying that, I’m currently planning a big family holiday to Florida next summer. Treating the kids to a holiday of a lifetime is priceless.

So, do you recognise any of the traits from the families we spoke to? Perhaps you’ve been inspired by some of the ways they manage their finances, or it’s encouraged you to reconsider your approach? If you’d like to find out more, take a look at some of our other articles on finances below, and start planning a future you’ll love today.

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