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Merging finances with your better half

April 1,2019

Author: Sarita Harbour

Congratulations! Whether you’ve just returned from your honeymoon or moved into your first home together, becoming part of an official couple is an exciting life change. However sharing your life also means sharing your finances. Here are five simple questions to help smooth the often-turbulent topic of couples and money.

Should we open a joint bank account?
Once you share a home, you’ll share household expenses. You may want to open a joint account to pay for them. Or not.  With one joint account, one or both spouses deposit money to the account. However regardless of who deposited it, either spouse may make withdrawals. 

Should we keep sole bank accounts when we become a couple?
Some couples prefer to keep their banking separate, with a sole account for each spouse. They split joint costs evenly or pro-rated based on their incomes. Yet problems like missing or late payments from a sole bank account to a joint utility account or mortgage account could negatively impact the credit of both spouses. 
Other couples combine these ideas.  For example, each spouse opens a sole account, and then together the couple opens one joint account.  Every month each spouse transfers money to the joint account to pay joint expenses, while ideally having some “spending” money left over in their sole account. 

Should we apply for joint credit?
Joint credit couples typically apply for may include a mortgage in both of your names on the family home, or a joint credit line.  
While two incomes may mean you can borrow more money, a joint credit application includes details from each spouse’s individual credit report, including all debt, delinquencies and bankruptcies.  And once you have joint credit, any problems such as late or missed payments impacts both spouses’ credit records.

What are our financial goals?
Just as you and your sweetheart may have different ideas about which movie to see or where to spend a vacation, your visions of your financial futures could be quite different. However you won’t know this if you don’t talk about it.
Have a frank conversation about where you see yourselves financially in two, five, ten, and 25 years time, and make this at least an annual discussion. Your plans may need revision due to career changes, expanding families, or changing priorities, and that’s okay. The key is to get comfortable talking about money, savings, and debt.

Key issues to touch on include housing goals, upcoming large expenses (such as cars or renovations), debt repayment, and education and retirement savings. 

How do we make long-term joint investing decisions?
Making long-term investment decisions is challenging enough when you’re single. Once you become part of a couple it often becomes more complex as you navigate two or more pension plans, Registered Retirement Savings Plans (RRSPs), Tax Free Savings Accounts (TFSAs) and non-registered savings options.

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