Let's talk about managing finances when you get married

[CliffFletcher]

Originally Posted by Slava

Yeah and I guess that's obvious, but then why not just put the accounts together?

Yeah, if you're going to just move money around to split everything 50/50 anyway, why even have separate accounts? Just seems like more work.

[Fuzz]

Originally Posted by Locke

I think you're ignoring the sheer joy incurred by paying Bank Fees. Its a real thrill.

Bank fees? LOL. Haven't paid those in years!

[troutman]

Originally Posted by Travis Munroe

Does anyone know if there is such thing as a much more simple prenup? Something that essentially wipes out any obligation of spousal support but everything else would remain in the courts hands if not agreed on privately? I have spoken with a number of people who feel this is the fairest option which includes couples on different income levels but have never heard of anything other than spending a good chunk of money on a full out prenup.

I don't see how a lawyer would advise their lower income spouse/client to waive the right to claim spousal support in the future.

Avoid anything described as a "simple prenup" as it could be fairly easy to demolish it later. Do it right, and don't cheap out on this. Obtain independent legal advice (ILA) and make full disclosure to each other, and your agreement is far more likely to be binding. A proper pre-nup does not have to be super-expensive, and will help you to avoid further uncertainty and costs in the future.

An agreement done without ILA is close to worthless.

[CliffFletcher]

Originally Posted by EldrickOnIce

Be handy if there was some way to have a little autonomy on a tiny bit of frivolous spending.

A lot of couples have discretionary spending 'allowances.' I don't see any reason they would need to be secret. If people feel their partner is critical or disapproving of how they use their discretionary spending then they have issues that separate accounts won't fix.

[EldrickOnIce]

Originally Posted by CliffFletcher

A lot of couples have discretionary spending 'allowances.' I don't see any reason they would need to be secret. If people feel their partner is critical or disapproving of how they use their discretionary spending then they have issues that separate accounts won't fix.

Right. So some money is kept separate. As it should be. It really only comes down to how, and how much.

[Handsome B. Wonderful]

I'm a contractor and make significantly more than my wife. She is full time.

Some of you are accountants and financial planners. Surely you can understand the tax implications behind keeping the money separate and out of our personal accounts until it's needed.

[Slava]

Originally Posted by Handsome B. Wonderful

I'm a contractor and make significantly more than my wife. She is full time.

Some of you are accountants and financial planners. Surely you can understand the tax implications behind keeping the money separate and out of our personal accounts until it's needed.

Of course, but that's not quite what we're talking about, right? I thought this was a discussion about basic household spending and that sort of thing. Whether you get that money from your corporation or paid to you by an employer wouldn't really impact this.

[Ducay]

Originally Posted by Handsome B. Wonderful

I'm a contractor and make significantly more than my wife. She is full time.

Some of you are accountants and financial planners. Surely you can understand the tax implications behind keeping the money separate and out of our personal accounts until it's needed.

But even us "team approach" folks deal with that, we still have separate accounts, but its all 50/50 money in the relationship's eyes. Sure to the tax man they are personal accounts only in 1 of our names, and the money may be attributed or tied to a corp or individual - but good tax planning and cash management is easier with the team approach as it is one pool of money being handled, generally, by 1 individual. Not some complex system of bill payments, savings contributions, allocations, and slush "fun money" funds.

[Imported_Aussie]

My wife and I set up joint accounts after we got engaged, while we were preparing to pay for a house, wedding, etc.

Only things that are separate is TFSA, RRSP (for tax reasons) and my wife has an extra credit card (and I will likely get one of my own too when I get around to it) so we have a Mastercard for places that don't take Visa (e.g. Costco) or if we ever have to cancel a card while travelling.

I couldn't imagine it any other way, and it makes it so much easier to manage our finances as everything is open. I am not one for extravagant purchases anyway (got that out of my system when I was younger) so not having a "fun" account is not a barrier.

I have seen one time though when separate accounts has helped, and that is with my grandparents. My grandfather passed away recently, and his account was frozen once bank notified, until will is executed (so they would then know where to release the funds), but my Nanna has her own account (with more in it as they used to spend more out of the other account) so she never had a problem handling any expenses.

[DuffMan]

Originally Posted by Slava

I'm just wondering: for those of you who keep everything separate how that would work easily for a situation where she's on maternity leave or either one is on parental leave?

that's what 1 joint account is for.

[burn_this_city]

We were married 6 years ago, she was with RBC and I was with Scotia. We never bothered to merge everything, arguing over which bank was better. I make more than she does, but we essentially just split things based on earnings and carrying capacity. I have been paying for her cars in my name, and she paid for my car in her name, simply based on who had the carrying capacity for the cost at the time. I pay the mortgage, she covers the utilities ect. It has been largely irrelevant to us and not a source of friction. TLDR, we were lazy and never merged our stuff, but it's been fine.

[Handsome B. Wonderful]

Originally Posted by Ducay

But even us "team approach" folks deal with that, we still have separate accounts, but its all 50/50 money in the relationship's eyes. Sure to the tax man they are personal accounts only in 1 of our names, and the money may be attributed or tied to a corp or individual - but good tax planning and cash management is easier with the team approach as it is one pool of money being handled, generally, by 1 individual. Not some complex system of bill payments, savings contributions, allocations, and slush "fun money" funds.

All our bill payments, allocations, investments and big decisions are handled joint by actually talking to each other. That's our team approach. Some of our stuff is complex. That's what accountants and financial planners are for.

What's the point of pooling it all in to one account? No one has shown how that is beneficial.

We have a joint account for rare occasions, it spends most of its time mostly empty. Because we're with the same bank it costs zero to transfer money between each other anyway.

[Locke]

Originally Posted by burn_this_city

We were married 6 years ago, she was with RBC and I was with Scotia. We never bothered to merge everything. I make more than she does, but we essentially just split things based on earnings and carrying capacity. I have been paying for her cars in my name, and she paid for my car in her name, simply based on who had the carrying capacity for the cost at the time. I pay the mortgage, she covers the utilities ect. It has been largely irrelevant to us and not a source of friction. TLDR, we were lazy and never merged our stuff, but it's been fine.

I've got something of a similar story as all of my business accounts were with another bank and it'll be a cold, cold day in hell before I deal with RBC or Scotia ever again, which is where her accounts are held.

So we have a single joint personal account, but all my business accounts are held elsewhere.

[DuffMan]

Is there no divorced people here who can advocate for or against separate accounts?

[WhiteTiger]

Originally Posted by DuffMan

Is there no divorced people here who can advocate for or against separate accounts?

I was divorced, and pooling of money and the friction it caused was one of the three major problems that caused the breakup.

[CliffFletcher]

Originally Posted by Handsome B. Wonderful

What's the point of pooling it all in to one account? No one has shown how that is beneficial.

So you can track your savings in one place. Our major expenses are collective - mortgage, insurance, car, utilities, RESPs, kids activities, groceries. Our savings are all for collective goals - vacations, home repairs and renos, big ticket family purchases. Tracking all that in one place is just easier than having to assess several accounts to see how much we have saved for vacation or how much we can spend on new flooring.

The only budget item that isn't collective is our discretionary spending, and that's such a small fraction of our expenses that we just manage it informally. No point setting up separate accounts to cycle a few hundred dollars in and out of.

[Handsome B. Wonderful]

Originally Posted by CliffFletcher

So you can track your savings in one place. Our major expenses are collective - mortgage, insurance, car, utilities, RESPs, kids activities, groceries. Our savings are all for collective goals - vacations, home repairs and renos, big ticket family purchases. Tracking all that in one place is just easier than having to assess several accounts to see how much we have saved for vacation or how much we can spend on new flooring.

But in my situation, that money stays in the company until needed. Why pay taxes on money I'm not using?

[CliffFletcher]

Originally Posted by Handsome B. Wonderful

But in my situation, that money stays in the company until needed. Why pay taxes on money I'm not using?

I thought we'd already established that if you're running a business none of this applies.

[CliffFletcher]

Originally Posted by EldrickOnIce

Right. So some money is kept separate. As it should be. It really only comes down to how, and how much.

But you don't need to keep it separate. We like to have something close to an equitable consumption of cookies in our house. But we don't split up the cookies into separate bags with names on them. We would only take those measures if trusting each other to be fair and honest about how many cookies we were eating had failed and was causing problems.

[MoneyGuy]

Originally Posted by Handsome B. Wonderful

I'm a contractor and make significantly more than my wife. She is full time.

Some of you are accountants and financial planners. Surely you can understand the tax implications behind keeping the money separate and out of our personal accounts until it's needed.

I see that it’s accountants, financial planners and lawyers thanking your post.