How my financial strategy changed with marriage
This summer, after plenty of pandemic setbacks, my partner and I finally tied the knot with a lovely small wedding outdoors. It gave us all the moments we cherished and more, but when I sat down to sign the paperwork, I knew it wasn't just about the peonies and sunshine. I was signing onto a whole new way of life.
For many people, marriage is as much a financial commitment as it is an emotional one. It's the beginning of a chapter in life that is deeply intertwined with another’s. It’s often the catalyst to stop thinking of yourself as an independent entity and start thinking of yourself as part of something bigger.
When I got married, I shifted my financial strategy to start thinking of myself as a financial family. It may just be a family of two right now, but it already means planning differently when it comes to everything from bank accounts to investments to taxes.
Taxes for Two
In Canada, you are required to report your marital status as of December 31st of the tax year. So, while you may prepare your tax returns separately, there's no getting around that little check box that makes a world of difference. For my spouse and I, the next step will be to set up a meeting with our accountant to discuss all the changes to how we need to calculate and report our taxes for the next tax year. This will include considerations that benefit us as a financial unit, like applying our home office expenses to offset the taxes either for whoever has the higher salary, or whoever could move down a tax bracket with the offsets.
Taxes is one area that we’re both happy to pay to have professionally managed. For us, the risk of getting something wrong or losing out on savings—because we didn’t have the knowledge of how to organize things better—far outweighs the cost of hiring an accountant.
New bank accounts
Before we got married, we opened a joint bank account to handle all the expenses related to running the new house we’d just bought together, such as paying property taxes, utility bills, and home insurance costs. We’ll now expand the joint account to cover most of our day-to-day spending needs.
Each of us will contribute a proportion of what we earn into this account on a regular basis so we have a comfortable reserve from which to draw, plus some extra to cover any emergency costs that might come up. We’ll also get a joint credit card to make purchasing things like groceries and tracking our shared budget easier.
Investing in RESPs
Over the next few months we’re going to start planning for future investments. To ease the cost of raising any kids we might have in the future, we want to be ready for it. While an RESP can't be set up until the child has a valid SIN, recognizing the contribution limits now will help us allocate our budget and be ready when the time comes.
Taking these big shared financial steps can be a little daunting for newly weds. Our rule of thumb with most things, including financial conversations, is to be open and honest with each other, and not be afraid to speak up when we feel unsure, when we don’t understand something, or when we feel a little nervous or stressed about decisions. We talk through everything in detail to make sure we’re both on the same page before moving ahead.
This approach has been a solid strategy not just for our financial decisions but for our relationship as a whole. It’s given us the confidence to feel excited and look forward to the prospects of sharing a financial future together.
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