Managing your money as a couple

Sharing financial responsibilities

Here are some examples of how some couples share financial responsbilities. Discuss the pros and cons of each option before you decide how you’ll share your finances.

Use a joint account for all individual and joint expenses

In this arrangement, couples pool their incomes. They pay all their expenses from a shared account. This makes it simple to track expenses as a couple.

If you choose this method, discuss the following questions:

  • How will you handle paying off debts you acquired before you became a couple?
  • Do you understand the risks and benefits of a joint account?
  • How much of your shared incomes will be set aside to reach savings goals?
  • How will you handle planning for retirement?

Use a joint account for household expenses only

In this arrangement, couples keep personal accounts for individual expenses, such as clothing or haircuts. They open a joint account for shared expenses. Shared expenses may include groceries, rent or mortgage payments and utility bills.

This option allows couples to split shared expenses easily. Budgeting may be more difficult because individual purchases are separate.

If you choose this method, discuss the following questions:

  • Which expenses will you pay for jointly?
  • How often will you put money into the joint account?
  • How much will you each contribute to shared expenses?
  • Will you each contribute equal amounts to the joint account or different amounts based on your incomes?
  • What will you do if you have to go down to one income due to job loss or illness?

Use separate accounts

In this arrangement, couples maintain separate finances. They split shared expenses and pay for individual expenses on their own. This may work well for couples who value financial independence.

If you choose this method, ask the following questions:

  • How will you divide expenses?
  • How will you budget as a couple if you have separate accounts?

Borrowing money as a couple

If you borrow money together, make sure you know your responsibilities as a joint borrower. For example, if you co-sign a loan, you become equally responsible for repaying the loan.

You can borrow money together using a joint line of credit, loan, mortgage or credit card.

Before you borrow money as a couple, discuss the following questions:

  • How will you use the loan?
  • What type of loan best suits your needs as a couple?
  • How will you share the payments on your loan?

Find out the pros and cons of joint credit cards.

Know your rights and responsibilities when you borrow as a couple.

Saving as a couple

Set savings goals together. To reach these goals, consider what type of investment will work best for you as a couple.

For example, you may want to save for:

  • an emergency fund
  • a trip
  • a home
  • your retirement
  • a car

Learn how to set savings and investment goals.

Savings Account

A savings account can help you build your savings. Usually interest paid on money in a savings account is higher than on a chequing account. You can set up automatic transfers from your chequing account to your savings account each time your pay cheque is deposited. This can help you make saving a habit.

Tax-Free Savings Accounts (TFSA) and couples

A Tax-Free Savings Account (TFSA) is a savings account registered with the federal government. Your savings grow tax-free. You do not pay tax when you take money out of your TFSA. You are allowed to contribute $5,500 to your TFSA each year.

Only you are allowed to contribute to your TFSA. However, you may give your spouse or common-law partner money to contribute to their TFSA if they haven’t used their contribution amount. This way you and your partner are making full use of the opportunity to have your savings grow tax-free.

When you or your partner dies, you can usually transfer a TFSA to the surviving partner.

Learn how Tax-Free Savings Accounts work.

Registered Retirement Savings Plans (RRSP) and couples

A Registered Retirement Savings Plan (RRSP) is a savings plan registered with the federal government to help you save for your retirement. You’re allowed to contribute a certain amount each year depending on your income. Every year you contribute to your RRSP, you receive a tax credit for that year.

You don’t pay tax on any money you earn from your savings until you withdraw money from your RRSP.

You may be able to contribute to a spousal RRSP. Spousal RRSPs allow you to contribute to an RRSP that is registered in the name of your spouse or common-law partner. To do this, you use your own contribution amount.

Spousal RRSPs help make sure you both have enough income at retirement. Spousal RRSPs also help make sure your income at retirement is similar, so you could both be taxed at a lower rate. If one spouse has a larger RRSP, they will have more income at retirement and will be taxed at a higher rate.

Learn how to contribute to your spouse’s or common-law partner’s RRSP.

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