The Polyamorous Misanthrope
Just for Fun
What is Polyamory?
Featuring Spice! -- The PolyFamily Web Comic
Polyamory for the Practical
Handling Money in the Family:
In total, the income into the house is $125,000. Each person earns a percentage of that income:
Instead of breaking down the costs of living together by "equal shares," we break them down by percentage in accordance with the percentage of income earned. This means that the expenses have fair, proportionately equivalent, impact on everyone, even though the dollar amounts are different. This is a dynamic model: you can adjust the percentages as the income in the household varies.
That's the simplest version of the model. Let me address some particulars:
In our case, we did not use gross income, but instead used take-home income after major expenses such as health insurance, student loans, and some other agreed-upon expenses. We had a whole set of decisions around what counted as house expenses vs individual expenses. For instance, while cable TV was deemed a house expense, pay-per-view movies would be paid for individually; basic phone service became a house expense, while long-distance bills were split according to usage. We chose to make most child-related expenses house expenses. The major exceptions were college savings and school expenses, paid for by the parents. Those decisions worked for us, though they might not work for you.
When looking at the finances (among other things), we found that it's very important to have a strong consensus model for how to make those decisions. It's important to come to solutions that everyone is really comfortable with and to make sure they get recorded accurately.
There are ways to take unfair advantage from within this system, but it's important to remember that this is about living with people you care about and wish the best for. You are setting up these guidelines for you, your household, not for a random group of strangers.
After a couple of years of renting and using this model, we bought a house together. We investigated incorporation but determined that it would be too difficult to get the mortgage we needed. Instead three of us bought the house together. With the help of a lawyer we developed a joint operating agreement that described the ownership structure that overlaid the mortgage.
Basically, it's a system for determining percentage of ownership. Part of each person's overall monthly contribution is tagged for ownership expenses. Over time, the total amount that one person puts in towards ownership expenses over the total amount that everyone has put in is that person's percentage of ownership. So let's say that after a given amount of time, it looks like this:
You need a strong consensus model here, too. What counts as an ownership expense? We decided to count anything a landlord would pay for if we were renting. This includes not only the mortgage and homeowner's insurance, but also major appliances, repairs, trash and snow removal, lawn work, etc.
So here's some advice on making this work:
Last but not least: remember that people can be uncomfortable and edgy about money, and that shifting to a new model can have emotional repercussions. Be gentle with one another. Keep talking.
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