Managing Finances As A Couple

-Written by Cel

Something we get asked about regularly is how we manage our day-to-day finances as a couple.  Over the years, our system has been refined greatly to be as efficient and convenient as possible.   Our setup is mostly relevant to couples who live together, share expenses, but do not want to have joint bank accounts for whatever reason.  However, even single people should still read this – particularly Canadians – as many of the details and tips could be applicable.

The most important, and defining, characteristic of our banking setup is that we pay zero dollars in fees.  We refuse to pay money to a bank for the privilege of holding our money – they should be paying us.  (Our investment accounts do have very small fees on the funds, but we have no account fees, maintenance fees, or service charges of any kind).

We each have two chequing accounts – President’s Choice Financial, and ING Direct (soon to be rebranded as  Tangerine).  Both these banks offer unlimited transactions, zero fees, decent interest rates, and good customer service.  President’s Choice offers free chequebooks, while ING does not.  However, ING Direct offers free online money transfers (which go through instantly if sent between two ING clients), whereas PC does not.  We pay our rent through cheques from PC, and transfer money between ourselves through ING when needed.

If you are Canadian and not already an ING customer, consider signing up.  If you do sign up, make sure to use a referral key from an existing customer during the sign-up process. This will get you a $25 (sometimes $50 during a promotion) cash bonus in cash (and a bonus for the existing customer as well). Failing to do this when signing up is throwing away free money. If you don’t know anyone who is a customer, you can use our referral key: 34704816S1

The second important element in our banking system is credit cards.  We try to put every expense possible on a credit card.  Partly because we get free cash back, but more importantly because it is the easiest way to keep track of joint expenses.  Our credit card purchases automatically post on Mint.com; we then do full payouts on all credit cards twice a month.

We have a total of four joint credit cards, each fulfilling a unique function:

1. Amazon.ca Visa – 1% cash back on all purchases, 2% on Amazon.ca purchases, and most importantly, no service charge or foreign currency exchange fee when used outside Canada.  This is the only card we use when we are travelling.

2. Costco American Express – 1% cash back on all purchases, 3% on restaurants, and 2% on gas.  We have this since it is the only credit card accepted at Costco.

3. President’s Choice Financial Mastercard: 1% cash back on all purchases (in the form of PC Points, which can be spent at Superstore, No Frills, etc.), as well as additional rewards through the PC Plus program.  We use this as our generic, all-purpose credit card.

4. MBNA SmartCash Mastercard: 1% cash back on all purchases, 2% on groceries.  This is our most recent card, and we got this mainly because they offered us a $100 gift card as a signup bonus.  We use this for most grocery purchases.

We split all our shared expenses (groceries, internet bill, etc.) 50/50.  Individual bills like our own cell phones, clothes, are paid for individually.

Our system may seem quite complicated when described, but it is incredibly simple in practice, an efficient way to maximize credit card rewards, and keep costs down by not paying service fees.

Here is a runthrough of a typical month:

January 1st through 15th: We buy groceries and whatever else we normally buy, putting all of it on the relevant credit card.

January 15th, end of day: We log into Mint and tally up all our credit card purchases, which are automatically tracked.  Any individual expenses, we add up separately and pay those off.  All joint expenses, we add up and then split in half, and we each pay off that half.

Cel also does an online transfer of money through ING Direct to Steph, to pay for his half of February’s rent.

January 16th to 31st – We buy groceries and whatever else we normally buy, putting all of it on the relevant credit card.

January 31st, end of day – We log into Mint and tally up all our credit card purchases, which are automatically tracked.  Any individual expenses, we add up separately and pay those off.  All joint expenses, we add up and then split in half, and we each pay off that half.

Both of us do a deposit into our respective investment accounts at month-end.  We also do a brief month-end accounting.

And that’s our system!

Our Tangerine Referral Key: 34704816S1

Advertisements

7 Comments

  1. A few years back I used PCfi and wasn’t really that happy with them. I think there were a lot of limits on the account such as transactions and withdrawal limits. I’ve since switched to Coast Capital for my SO and I’s finances and Vancity for the business account. Been very happy with both. Credit Unions are the best!

  2. I’m really surprised you use credit cards as most commonly held knowledge is they’re the devil. I’m a Canadian who lives in London (tres expensive, even by Vancouver standards). My boyfriend is British, and we rent a fairly nice flat in a relatively expensive neighbourhood. But we’re quite considerate with our expenses and I handle all the monthly budgeting using google doc spreadsheets. I have a Canadian credit card which is a money suck, but I can’t seem to get a British one, so it’s tucked away in my dresser. My boyfriend has a British one, both of us have had to carry balances on account of our travel expenses (we fly back to Canada twice a year). It’s been a real lesson in paying off debt and saving money – both hard to do simultaneously. But I’m interested to see that this is how you manage the joint expenses effectively. Do you ever worry that it looks bad on your credit rating to have more than 2+ credit cards? Are they joint cards?

    • Credit cards are a bad idea if you don’t pay them off and incur fees or interest – this is easy to avoid, however. We don’t pay a cent for any of ours, and get a few hundred dollars a year in rewards for what we would be spending anyways. You can use credit cards without going into debt – just pay it off.

      It doesn’t look bad on your credit rating to have multiple cards, as long as it’s not dozens of them. We both have excellent credit, which is how we qualify for the really good rewards cards.

      We don’t have any cards that are completely joint – we’re authorized users on each other’s cards, which is very similar to joint.

  3. Thank you for information! I am tired of paying banking fees and seriously thinking about switching (most likely to Tangerine)! I just had a couple of questions for you though…

    1) Do you only have 2 chequing accounts to make use of the free cheques that PC has and the free money transfers that Tangerine has or is there another reason as well?

    2) Do you have any “regular” savings accounts? I currently have a few savings accounts (because the eSavings accounts are free with RBC) and it sort of helps me shuffle my money out of my main chequing account, but I probably just need to rethink that whole system so I’m curious to hear what you do!

    • Hi Jolene, you should totally switch to Tangerine! Make sure to use a referral key when you do for the free money – if you don’t know anyone with Tangerine, feel free to use ours.

      1. Those are the main reasons. However, it is also due to our cautious nature – just in case one of them starts charging fees or does something we don’t like, then it is easy to switch over.

      2. Yes, we both have regular savings accounts, with PC and Tangerine. It’s good to have for emergency fund access.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s