Give Me Back My Five Bucks

Do you make lump sum payments towards your mortgage?

How many of you make additional lump sum payments towards your mortgage?

Originally, RD and I weren’t going to bother making lump sum payments, but since we had a decent amount of money in our joint account, we revisited that idea a few weeks ago. After some consideration, we decided that once a year (every January) we’d take a portion of our savings to make a lump sum payment towards the principal amount of our mortgage. This year (after accounting for a decent buffer and renovations we want to do in 2018), we decided to put down $3,500 towards our mortgage.

Except that we couldn’t. Or rather, TD Canada Trust is making it very difficult.

Related: Why I don’t want to burn our mortgage

I went online and clicked on the  “Make a Prepayment” button on the sidebar. There, I learned that if we put down $3,500 towards the principal balance of our mortgage, our amortization would be reduced by 13 weeks, and we’d save over $2,000 in interest. Amazing.

But when I went to finalize the payment, I got an error message: “No payment account exists. Please select a valid payment account.”

Must be a mistake! After all, they’re taking my mortgage payments out of my Tangerine account (not to mention my mutual fund contributions), so why wouldn’t they be able to take and additional lump sum payment? I called customer service who confirmed that unless I have a chequing or savings account with TD, I’m unable to make lump sum payments towards my mortgage online or over the phone. In fact, my only option is to go to a branch with either a bank draft or cash. WHAT.

Related: How we saved a 6-figure down payment

After I got off the phone, I did some additional researching online, I found out that most major banks in Canada do not allow lump sum payments unless the borrower also has a chequing or savings account with that bank. I mean I get why the banks don’t want to make it easy for you to make extra payments, but it just seems crazy that I can’t move money from an account that has already been verified and authorized to make my normal mortgage contributions. The technology exists.

Anyway, after I told RD what I had learned, part of me wants to just get a Tangerine bank draft ($10) every year out of principle, because it doesn’t seem right that we have to open up a new bank product that we don’t actually need.

Has anyone else come across issues like this before?
Do you make additional lump sum payments towards your mortgage?

Do you have a marriage or prenuptial agreement?

Since our wedding date is in about 7 months, we’ve been talking a lot lately about marriage agreements (also known as prenuptial agreements). Did we need one? And if so, what would it look like?

I read a Global News article not too long ago that said that only 8% of couples in Canada had a prenuptial agreement, which actually really surprised me given that 4-in-10 first marriages in Canada end up in divorce!

So I asked people on Twitter if they had any sort of marriage / prenuptial /co-habitation agreement, and I got answers that ranged from “didn’t even think about it” to “wish we had, and now it’s messy.”

In British Columbia, couples who have been living together for at least 2 years share the same rights as married couples – which includes a 50/50 split of shared assets and debts. So basically you don’t have to get officially married in this province to be treated as a married couple in some aspects of the law. This can be scary for people who want to live with their partner, but either don’t want to get married yet, or just don’t want to get married at all.

When RD and I first moved in together, we talked at length about how we were going to split the household expenses, and made sure that every large joint purchase was split equally. This worked for us because we came into the relationship with similar assets, zero debt, and comparable salaries. But now that we’re getting married? We’re mostly in the “what’s mine is yours” boat, but there are some aspects of our personal finances that we both always want to keep separate. And we’ve seen too many seemingly great relationships fall apart to think we’re immune to divorce. So even though we both respect each other and (obviously) expect to spend the rest of our lives together, you can’t ignore all those scary statistics.

In researching the topic of prenups and marriage agreements, there were so many articles talking about how to approach your partner about the topic, how to resolve fights that escalate because of bringing it up, and how to convince the upset partner to get one in the end. I guess I don’t really understand why so many people think talking about a prenup is such a horrible idea. I mean, yeah it kinda sucks talking about potentially divorcing before you’re even married, but the financial topics surrounding what a marriage agreement entails are kind of must-have conversations anyway IMO – and will help you both think about your financial relationship in the future. I definitely know we had some good discussions surrounding topics we hadn’t even thought about before. Because if you put aside the emotions surrounding what marriage and a prenup both actually mean, you’ll see that personal finances play a huge role in every relationship, and is one of the leading causes of divorce.

Pros to getting a marriage or prenuptial agreement

  1. You are both protected in the worst case scenario. People compare marriage agreements with insurance, and that’s basically what it is. They exist for the sole purpose of being there if something goes horribly wrong. If you do end up getting divorced, you’re likely going to be in a complete emotional crisis (and you may not be thinking clearly). Having a document that lays out exactly what will happen will likely mean less stress, less fights, and less anxiety.
  2. Make plans when you’re happy together. If your marriage ends in divorce, it could be resolved amicably and maturely, but it could also end so, so terribly. One of the main reasons why a prenup might be a good idea is because you’re creating it when you’re happiest with each other – when you can be fair, and reasonable, and honest.
  3. Financial matters that need to be discussed get discussed. You get to talk about tough questions. Like, really tough questions. And discussing what a marriage agreement would look like also means you have to start thinking about finances and lifestyle – where do you really want to be in 5, 10, 20 years from now? And does that line up with your partner’s financial goals? What will you do in the future about income discrepancies, or windfalls, or inherited vacation properties, or family obligations?
  4. One or both of you have a substantial amount of property (or expects to acquire substantial assets). If you want to keep the family vacation home in your family’s possession, or if you plan to inherit a large sum of money or a business, it might be advantageous to have it put in writing that should your relationship end, those assets would remain in your name only.

Cons to getting a marriage or prenuptial agreement

  1. It’s pretty crummy timing. When you should be planning your wedding and talking about how great your new life together will be, thinking about breaking up is just about the last thing either of you want to do. It’s been a strange process listening to potential first dance songs one minute, and then talking through all the things that could happen if we were to divorce. But it’s important and we’re really putting in a lot of effort to think things through.
  2. It could be a deal breaker. For some people, the thought of a marriage agreement or prenup brings up thoughts of distrust, resentment, and could lead to questioning whether your partner is ready for a lifelong commitment. For me personally, I don’t see an issue with it – but perhaps that’s only because we come into the relationship with similar finances. Maybe I’d feel completely different if one of us had significant debt (or significant assets), or there was a large enough gap in our income levels.
  3. It can get expensive. It’s hard to predict what life will hold for you and your partner in the future, and it might be that your marriage agreement works for you when you’re newly married. But would it change if you had kids? Would it change again if one of you stopped working? Would it further change if there was an infidelity? Going to a lawyer every few years can be a costly expense that some couples don’t have the cash flow for.
  4. You’re young with little debt and little assets. If there aren’t any kids from a previous relationship to worry about, and neither partner has any assets to protect, a marriage agreement might not be the best fit.

So are we going to put together a marriage agreement? At this point, we’re not quite sure. But we are seriously considering it, and I would encourage anyone else living with a partner, or about to get married, to really start honest what-if discussions about the future if you haven’t done so already. You may come to realize that a prenuptial agreement isn’t the right way to go, or maybe you’ve decided that you definitely need one. Whatever happens, I think it’s naive to believe that divorce could never happen to you, and it’s also so important to keep an open dialogue going about money with your partner.

Do you currently have a marriage / prenuptial / co-habitation agreement with your partner?

January 2018 Goals

Well, I’m a little late with my January budget, but better than not getting it done, right? :)

First thing to report is that Zoey had her dental surgery on the 5th and she did really well when I took her in for her 1 week check-up. After a few down days where she was clearly in pain from the surgery, she has slowly returning back to normal. And I think she’s eating with a lot less pain now, which I’m thrilled about. However, she has had some major bowel issues which I won’t go into detail about, so we got some meds from the vet that will hopefully make the situation less messy for all of us. :)

And, I’m happy that the $1,700 we thought would cost for her surgery actually only cost $1,365. Which I mean, yeah that’s still a lot of money, but over $300 less than what we thought we would pay, so I’m counting that as a win.

Other than Zoey’s surgery, January is a quiet month. No travel to pay, no big film festivals, and nothing huge to pay for … except for the wedding of course. :) I’ve decided to keep our wedding expenses separate and outside of my monthly budget spreadsheet. I’ll be tracking all of our expenses on the side, and will give a brief update at the end of every month during my budget recaps.

One thing to note from the below budget is you’ll see our climbing membership has been suspended. RD sprained his MCL over the Christmas break, and will be out for at least another 6-8 weeks while he rehabs with a physio. :( He’s pretty bummed about it and I know it’s tough for him, but I’m happy that it wasn’t anything more serious than that. We’ll be back to the climbing gym before you know it! And in the meantime, I’ve been taking full advantage of the free gym in our building to supplement my weekly exercise outside of field hockey games and practices.

Anyway, onto the budget!

January 2018 Goals:

  • Bring my lunch to work. Except for team lunches if my boss comes to the downtown office where I work out of.
  • Sell my Leica camera and my Coach purse. Or at least post them online. They’re doing nothing for me collecting dust in my closet.
  • Move for at least 60 min. every day. Even it’s just a walk on the treadmill, I want to be moving every day in January.
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