TORONTO, Oct. 28, 2013 /CNW/ - First comes love, and then comes…a joint
bank account. Whether a couple is cohabitating in their twenties,
getting married in their thirties, or remarrying in their sixties, at
some point in any serious relationship the conversation about joint
finances will surface. Regardless of life stage, successfully
integrating finances requires open and honest communication to
determine how to best combine and plan for the future together.
According to research from TD Canada Trust, which surveyed adults in
committed relationships, the top three personal finance products that
Canadians combine with their partner are a joint bank account (64%), a
mortgage (60%) and a joint credit card (50%), compared to only 36% of
couples who have a joint financial plan.
"A common first step in combining finances with a partner is a joint
account for shared household expenses, and like other aspects of the
relationship, communication is key to keeping things harmonious," said
Janice Farrell Jones, TD Canada Trust. "It's important that both
parties have a clear understanding of household finances - from day to
day spending to long-term savings and investments - and all aspects of
each individuals finances - from everyday banking to credit card
management - to set the framework for a strong financial future
TD Canada Trust provides some advice that may help in maintaining
financial harmony when integrating finances with a partner at any life
Combining finances is often a first for many couples in their 20s,
whether it's renting an apartment together or working to pay down
existing student debt. When and how to share money will always vary
depending on an individual couple's financial situation and
relationship, but communication is always key.
"Start by discussing debt, saving, spending habits, financial goals, and
credit history to determine if there is anything that may affect the
ability to secure future loans together," said Farrell Jones. "Next,
work together to create a household budget that meets the needs of
expense and debt management and has a little left over to put towards
the collective financial goals."
Paying down student debt and saving for a home in the future, for
example, are common goals for many couples in their 20s. As with any
financial goal, it's important to discuss and align on key
considerations like timing, affordability and overall expectations. In
the case of home ownership, couples should also make sure they agree on
whether they are buying for the long or short-term as it will have a
financial impact down the road.
Paying down debt, raising kids and saving for retirement - with many
financial priorities, streamlining is essential for couples looking to
combine their finances in their 40s.
"First and foremost, couples at this life-stage should focus on what
will make life easier, financially, together," said Farrell Jones.
"Consider working with an expert to make sure each individual financial
strategy aligns with the other to maximize savings potential and keep
all of the household financial priorities on track. Couples can also
further streamline by making savings automatic with pre-authorized
transfers into a TFSA, RSP and a child's RESP."
Some couples may choose to merge certain aspects of their finances,
while retaining individual accounts for additional saving or
discretionary spending. Whether a couple decides to combine everything,
keep everything separate, or somewhere in the middle, it's important
that both parties are ultimately working towards the same financial
Likely, many couples in their 60s have a solid financial base, but with
fewer peak income earning years remaining, it's important to have a
clear picture of what retirement looks like and what it will take,
financially, to get there.
"Spending time with the grandkids will have a much different price tag
than travelling the world, so alignment on the retirement vision is
essential," said Farrell Jones. "If there is not enough saved for the
type of retirement a couple wants, they should work with an expert to
help determine how much more needs to be saved and ensure each
individual financial plan complements the other to maximize savings and
Whether married or common-law, couples should also ensure their
retirement savings strategy takes advantage of spousal RSP
contributions to help reach their retirement goals faster while
lowering income taxes now and in retirement.
About the TD Canada Trust Love & Money Poll
TD Bank Group commissioned Environics Research Group (www.environics.ca) to conduct an online custom survey of 4,564 Canadians aged 18 years
and older who are currently in a committed/serious relationship.
Responses were collected between January 10 and 25, 2013.
About TD Canada Trust
TD Canada Trust offers personal and business banking to more than 11.5
million customers. We provide a wide range of products and services
from chequing and savings accounts, to credit cards, mortgages and
business banking, to credit protection and travel medical insurance, as
well as advice on managing everyday finances. TD Canada Trust makes
banking comfortable with award-winning service and convenience through
24/7 mobile, internet, telephone and ATM banking, as well as in over
1,100 branches, with convenient hours to serve customers better. For
more information, please visit: www.tdcanadatrust.com. TD Canada Trust is the Canadian retail bank of TD Bank Group, the
sixth largest bank in North America.
Image with caption: "Ready to say I do to joint finances? Here's how to combine dollars and cents at any life stage. (CNW Group/TD Canada Trust)". Image available at: http://photos.newswire.ca/images/download/20131028_C7218_PHOTO_EN_32576.jpg
SOURCE: TD Canada Trust
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