August 2, 2008
Dear Economist: Should I subsidise my partner?
I have recently agreed with my student partner that she will move into my flat during the Edinburgh Festival so that she can sublet her room and pay for her half of our holiday together. She maintains that she should pay me for staying in the flat, whereas I argue that this would defeat the purpose of the exercise. How can we effectively resolve this dispute and look forward to our holiday? Should I simply charge her for any increase in my bills, or are there other considerations?
Ben, Edinburgh
Dear Ben,
Stop the tiptoeing about who pays what to whom. Let’s be blunt: she can’t afford this holiday, you can afford to subsidise her, but she doesn’t seem to want to incur too large a debt. It seems to me there are two solutions: an explicit contract, or an implicit one.
The implicit contract: quietly subsidise her holiday. Accept a little money from her as a tenant, and pick up a few of the extra holiday costs. The explicit contract: charge her the market rate for staying in your flat. Do not be surprised, however, if she begins to charge you for “services” provided either during her stay or on your holiday.
Choose whichever contract is to your taste. It will set the tone for your relationship – and the explicit contract may be cheaper in the long run.
Questions to economist@ft.com
Sounds like your girlfriend wants to assert her independence and doesn’t want you keeping her - fair enough. Let her pay you whatever she thinks is fair.
Posted by: Chris J | August 2nd, 2008 at 12:37 pm | Report this commentNonsense. If the holiday is worth having, it is a joint benefit. Costs are joint too, and so you both recognise or she would not be paying half. If you charge her any extra costs you incur because she is staying in your flat, there is no subsidy. You will have contracted as equal partners in order to share the holiday, and entered into no further contract (as yet).
Posted by: David Heigham | August 2nd, 2008 at 2:03 pm | Report this commentWhat is the problem here? This is like a battle of the sexes game where you both want to go and watch football, and you’re moaning because she doesn’t want to go to the opera. If she wants to pay, let her pay. You can even roleplay like me and my wife: she can leave the money on your nightstand when she leaves.
But, that’s the simplistic one stage view of this situation. I have been trying to think of why someone would have an incentive to insist on paying. One possibility is that she is playing a multi-stage game: she is only considering paying for things in the short-run.
My second wife tricked me with this scheme. She always insisted on splitting bills and cab fare. But once she had sealed the deal and set up a joint bank account (never set up a joint bank account!) she was bleeding me dry with hair appointments and manicures and spa treatments and new jewelry. I remember one month the debit card statement looked like a map of Bond street. It was really bad. Thank god I had a prenup (always get a prenup!).
So bottom line. Take my advice and let her pay, but make sure you’ve got a good lawyer before you buy an engagement ring. I have a guy in Chancery Lane, right next to a jewelry shop! It’s very practical. Oh and never get a joint account!
Best of luck
Stellan Sjögreen.
PS Don’t get a joint account!
Posted by: Stellan Sjögreen, Banker 39 | August 5th, 2008 at 9:29 am | Report this commentAnd dont you ever even think of opening a joint bank account!
Posted by: RND | August 6th, 2008 at 8:59 am | Report this commentStellan,
I have read that divorce courts in England have been setting aside more and more prenuptial agreements over the last few years, and that if you have any money, or even a realistic hope of making money in the future, England might not be a good place for your financial health.
Good luck.
Posted by: larry | August 6th, 2008 at 8:10 pm | Report this commentThis question is typical for Scots, I think…Being Swiss, and therefor near to the greedy mentality, I would consult a typically Swiss compromise. For exemple choosing a holiday in Switzerland and opening a common bank account. The girlfriend will be happy to have some money to shop with, and the young man may use it to hide future earings from the taxman.
This brings profits to both of you.
A happy yodel from the Alps
Al
Posted by: Al Kunz | August 7th, 2008 at 3:00 pm | Report this comment