Working towards financial independence with a partner who spends more than you

This post will chronicle my personal path of working towards financial independence with a partner who spends more than me.

I’ve seen a lot of questions on various blogs around this topic and wanted to share my personal experience in case it helps others on their path.

Early relationship – Year 1

Mr. MH and I met when I was just shy of 20 and he was 24. Like most new relationships, we kept our money separate and paid our own way.

I had come to Ireland on a 1 year working holiday visa with the intention of using Ireland as a base to see more of Europe.

1 month to the day after arriving, I met Mr. MH.

He had moved to Cork with a bunch of college friends who had other plans. They were saving towards a 1 year working holiday in Australia through the USIT round the world trip scheme.

I just looked up their website to include a link and sadly discovered the company entered liquidation 2 weeks ago as a result of COVID-19.

Anyhow, a whirlwind romance ensued and 2 months after meeting I had moved in. A few weeks after that I asked if I could tag along on their trip. Needless to say, Mr. MH agreed, though with a much internalized freak out which I was oblivious to at the time.

And I have yet to see much else of Europe!

At that time we were both working at a call centre earning less than 10€/hour. At that, I was on emergency tax and was being charged the full 42% on my income. I still somehow managed to get by. It was the most money I’d ever made as it was my first full time job out of college.

Luckily the emergency tax came in handy as when I left Ireland, I got all of that tax back which I put towards my next adventure.

Neither of us had saved anything for our travels. In fact Mr. MH had taken out a 6,000€ loan for the trip with no repayments due for 1 year (earning interest all the while). And later on, I borrowed 4,000$ from my parents.

Throughout our travels, we continued to pay our own way. We both lived pay check to pay check at that time, taking on whatever jobs we could get to afford our backpacker lifestyle.

Back to reality – Year 2

Once our travels were over, we were at a cross roads. Where do we go next? Do I stay in Ireland and apply for my last 1 year visa? At the time you could only get 2 per lifetime. One as a student and one as an under 35 year old. Or do we go to Canada and I sponsor Mr. MH for permanent residency?

Although it made sense to stay in Ireland and make Euro to pay off the debts we had accumulated, I wasn’t ready to use up my last visa in case we needed it in future. There was no option at the time to sponsor someone under a de facto/common law relationship and at 21, I wasn’t willing to get married for the sake of staying in the same country.

So, Canada it was.

I went home ahead of Mr. MH and we submitted our application for permanent residency.

We both got jobs in separate countries, living in limbo for 7 months until the application was finally approved.

At that point, I believe I forced offered to help Mr. MH pay off his loan which had grown to 7,000€ with interest. This became something like 12,000$ with the exchange which he would pay me back for interest free.

For part of the time we were apart I lived with my parents, getting lifts to a local water bottling plant for work, probably earning a little over minimum wage. All of my earnings went towards the debt.

Part way through I had built up enough for flights back to Ireland and stayed with Mr. MH for about 5 weeks where he paid for our food and rent as he was earning Euro.

Back home then, I moved in with my grandma rent free and got a job in a town near where I grew up. I walked to work and got my groceries on foot. My only expense was food at about 60$/week, getting some meals from my grandma and parents.

My entertainment consisted of binge watching a DVD set of House in my room and playing PS2 games in the evenings.

Like I said, living in limbo!

Together again – Year 2 to 5

Once Mr. MH got to Canada, we moved to Ottawa. I had gotten the debt down to a little shy of 5,000$. As I had a credit rating in Canada, I applied for a line of credit for the remainder and paid the Irish loan off in full. This enabled us to pay off lump sums regularly without incurring electronic international fund transfers and avoided currency fluctuations each time. It was also a much lower interest rate than the original loan.

I can’t remember exactly when we started tracking shared expenses but it must have been around this time.

We were also sharing an apartment with my sister and one of our best friends from Ireland who had come over for a working holiday there.

I started an excel sheet for budgeting and for tracking who owed who what. I paid for most of the household bills so this helped me keep track of my mom’s portion for my sister and the loan repayment Mr. MH had totted up.

This set the trend for most of our relationship money wise up until very recently.

Different spending habits

Mr. MH and I had very different feelings towards money. At that time I was cheap (not frugal…cheap). I hated when people at work would go around asking for a few dollars here and there for birthdays or other events. I hated being asked to donate to charities. I made my lunch everyday and ate at my desk most days. I would spend on very little other than necessities for long periods of time.

This allowed me to, even though I was only earning something like 14$/hour, amass cash for big purchases. I paid cash for our 4,200$ car. I paid cash to furnish and decorate our home.

I did however, go big at Christmas and for birthdays.

Mr. MH continued to live pay check to pay check. He bought his lunch every day. He went out a lot more than me. He smoked at the time. He wouldn’t bat an eyelid if someone was doing a charity drive.

As we had such different viewpoints on money, we felt the only way to work our finances was to keep them separate. I would pay for things I valued and Mr. MH would pay for things he valued. This helped us from feeling too much guilt or resentment around how the other person spent money.

I tracked all expenses periodically by extracting from our bank accounts and categorising and splitting all expenses. At somepoint I upgraded from excel to Quicken which better supported importing bank statements and some automation of categorisation.

We had a running total of who owed who what, usually with Mr. MH owing me large sums. He would transfer money to my account each pay check to bring down the figure.

I should also state that as administration and monitoring bank balances wasn’t Mr. MH’s strong suit, most of the big shared expenses came out of my account and so it was naturally going to trend towards Mr. MH “owing” me for those things.

Every time I did the bookkeeping, I would review what we were spending and would go through some of the bigger expenses with Mr. MH. He hated these discussions as he’d always feel guilty but I think this was the first step to slowly shift his money mindset.

First home – Year 6

Saving towards our first home was the first big joint financial endeavour for us.

We continued living like we had been the previous 5 years and I saved the majority of the downpayment.

Even though I didn’t bat an eyelid when I sponsored Mr. MH in year 1 of our relationship, technically taking all financial responsibility for him, buying our first home together was a HUGE commitment psychologically for me.

To me, being so money focused and knowing how much we differed on spending, this was a bigger commitment than marriage. I continued to freak out right up until we signed the paperwork at which point the worry seemed to disappear.

On paper, we split all of the purchase and ongoing home-ownership costs 50/50 outside of the downpayment.

I started to earn more and more and started increasing our living standards with big holidays, expensive gadgets and nice furniture while expecting Mr. MH to continue to split everything 50/50 even though his earnings weren’t increasing at the same rate as mine. Every now and then he would try to opt out of certain expenses to be more in line with what he could afford and me being bull-headed determined, I would offer to pay his half of things rather than do without, without tracking it as a debt.

When Mr. MH’s “debt” to me mounted, we started doing equity swaps.

I offered to pay for the mortgage on my own for a while to give Mr. MH a chance to catch up and when that didn’t seem to make much difference I cleared the “balance” by taking a chunk of the equity that Mr. MH had built up in the condo.

Move back to Ireland – Year 9

This cycle of building up “debt” to me and finding ways to wipe it out continued.

In 2013 we discovered that Ireland was now accepting de facto relationships as a valid means to sponsorship and decided we were going to move back.

The next year consisted of me saving up for the move while Mr. MH continued living pay check to pay check.

This worked out well enough as once we got back to Ireland, Mr. MH got a job fairly straight away but it took 7 months for my non-restricted visa to come through, and therefore I went 8 months between pay checks. The savings pretty much covered by expenses though we still split all expenses and any excess would have resulted in me “owing” Mr. MH for a change.

That said though it was a fairly quiet life. We barely went out, buying gifts for family birthdays and events was a stretch. I can remember reluctance to spend 10€ on bus fare to go visit a friend. I barely left the apartment. I watched the entire 10 seasons of Friends! Any time we’d visit friends in their homes they had bought, we felt like we’d taken a huge step back in quality of life.

Luckily, it was short enough lived.

Marriage – Year 11

The next big expense we saved for was our wedding. I think we managed to split this 50/50 without Mr. MH racking up any “debt” to me.

Most people would merge their finances at this point but the way we worked things to date still worked for us. If it ain’t broke don’t fix it.

At this point though, and I’m not sure what exactly to attribute my mindset shift to, whether it was years of being with Mr. MH, the Irish culture seeping in, or that I was earning more money than I needed to live, but I was starting to shift more towards Mr. MH’s way of looking at money.

I saw the value of contributing to life event things at work for other people, I was starting to be more charitable, I started buying my lunch every day at work. I started to value time over money.

And years of reviewing expenses with Mr. MH had slightly started to shift his mindset in my direction. He started looking for cheaper alternatives to certain expenses or limiting where he spent money frivolously. For the first time in our relationship, his bank account was starting to grow and last beyond pay check to pay check.

2nd Home – Year 12

After the wedding we started saving towards our home in Ireland. As we were considered 2nd time buyers we needed a 20% downpayment. Again, I saved the majority of the downpayment. Though to be fair, in year 11 and 12, I was taking home 20% more.

Same as before we split all purchase costs outside of the downpayment 50/50 on paper.

Somewhere in this year I discovered the concept of financial independence.

Baby – Year 13

Even though we went sale agreed in July of year 12, we only got the keys on Dec 23rd. I found out I was pregnant on Dec 27th. My plans of doing DIY jobs in the new house to save money went mostly out the window.

We paid to have renovations done to a certain degree before baby arrived.

I saved a good chunk of money towards my time off.

As I was contracting at the time, I wasn’t sure when or if I would be returning to work.

Mr. MH and I had some interesting discussions on how we would split money going forward.

When we started talking about starting a family a number of years earlier, I remember a discussion with my mother about how we would manage from a money perspective. When we were still in Canada, Mr. MH’s wage would not have been enough to cover our living expenses. I thought it would make sense for me to work and Mr. MH to stay home with our baby. Mom always told us to try and live off the lowest persons income even when both of us were working so that once we did have a family we would have the option of having one of us at home.

We didn’t feel that was attainable at that time.

I thought about how I would feel about Mr. MH’s spending habits if I was the one paying for them. It took me quite some time but eventually came to terms with the idea that I would cover our main expenses and then any money left over would be split 50/50 as disposable income. That would be for Mr. MH to spend as he pleased guilt free and resentment free on my side. Though I never discussed this idea with Mr. MH until I was on maternity leave.

Fast forward to when we actually did have a baby and our incomes were almost at a level where we could live off the lowest income. The first time I was splitting out our expenses it spurred a discussion about how we should be splitting things now that I was off and considering staying off as a full time stay at home mom.

Mr. MH thought it would be most fair to continue splitting things as we always had. I was earning more than him before I went on mat leave and had the savings to cover my expenses. I felt a bit hurt by this as I had it in my head that we would do it the way I had planned in my head years before. A plan I had years to come to terms with.

I agreed to continue as we always had but when I was leaning more towards staying off for a longer period of time, Mr. MH came around to the idea of covering our expenses with his income and investing the savings we had instead.

Mini-retirement – Year 14

During my time on maternity leave, I started this blog and got really into the idea of pursuing FI. I brought Mr. MH into a lot of my thought processes and we had a lot of discussions around what we would like to do if we retired early, why we’d like to achieve financial independence and so on.

I did a lot of analysis, looking at all conceivable options to reach financial independence as soon as possible, mostly spurred on by my want to stay home with our son. At the beginning, the analysis included a split of our assets. I figured out I was 40% of my way to FI (including the equity in our current home) but Mr. MH was only at 14%.

While we were on our mini-retirement, we had some time to discuss our future vision further.

On one of our walks, I commented that we were so lucky to be in a position to take an extended time off together as a family. Mr. MH then said that aside from being born in a developed country, and having good financial role models in my case, luck had nothing to do with it.

We do our best to keep expenses low even though our wages would support a more lavish lifestyle. Though perhaps 4 months off together would be considered lavish by some, if you looked at our clothes, car, house or other things people may attribute wealth to, you would never think we were lavish people.

We then talked about our financial upbringing and Mr. MH said that he never had any plans other than to live pay check to pay check. He was happy enough plodding along and never stopped to question if there was another way or any reason not to live that way.

Finding out about financial independence changed all of that.

I continued looking at how many years it would take for us to reach financial independence and when I really thought about “retiring early”, even though I could achieve that goal much sooner on my own, I didn’t want to retire on my own.

It made more sense to me to continue working together towards the same goal while we were in our highest earning years so that we could retire together much sooner.

The last time I had looked at our annual spending, Mr. MH had only spent 3,000€ more than me and that included some larger medical expenses which he has that I don’t.

I think over time, we have somehow met in the middle in terms of spending habit and outlook on money and our future.

We are both keen on attaining financial independence and finally in a place where we can pool our money together without guilt or resentment. And so, 14 years into our relationship, we finally agreed this was the best approach for us going forward.

The last time I tracked and categorised our expenses I no longer needed to split them. This is a huge time saver.

It’s a strange feeling to describe but it really feels good to no longer be looking at our money as separate and no longer have the discussions about which expenses we will split and which we won’t.

I don’t think we could have done it sooner, as we needed to go through the journey to get to this place but am really glad we are finally here.

Some stats

As part of writing this post, I back tracked over all our years together and figured out how much we each earned and spent over the years.

The outcome was interesting.

In 8 of the 13 years where I have data to compare, I earned an average of 18% more take-home than Mr. MH.

In 3 of the remaining 5 years (excluding maternity leave) where I earned less than Mr. MH, I earned an average of 8% less.

Since being back in Ireland, I spent an average of 9% less per year. I didn’t have the data at hand to see our split expenses from when we were in Canada.

Tallying up the years to right before maternity leave, I earned an average of 10% more.

BUT when you take maternity leave into account it brings us to….an exact 50/50 split in earnings as I earned 100% less in 2019 and 21% less in 2018.

So again, we met in the middle.

Summing up

Finances are tricky and emotional. Pooling resources together in any couple will take time, effort and communication so that both parties are happy with the approach.

For us, I think that tracking expenses and reviewing periodically together helped to build awareness and open communication around expenses on both parts.

I also think that as I’ve aged and earned more money (which would be typical for most people) is that I slowly started to value time over money. Something Mr. MH had right all along though without piecing together that saving and investing now ultimately buys more time in the future.

Eventually working towards the same goal of financial independence, though we have very different reasons for wanting to achieve it, has made it far easier for us to pool our resources together without guilt or resentment in how the other spends money.

I hope that has provided some insight into our journey and that it might help some other couples in their journey to financial independence where one partner earns less and/or spends more than the other.

Every couple will find some way that works for them but I must say that in the same way getting married made me feel somehow closer and more bonded to Mr. MH, so too has finally pooling our money together in our shared journey to FI.