In Addie Sorrell and Tyler Stevens’ Toronto apartment, the interior design reflects their intended lifestyle: on a bookshelf rests a sculpture of a little red bird they bought on vacation in Peru last year, below it are several tiki mugs they’ve collected during their many holidays.
An impressive vinyl collection rests near a widescreen TV, while their black cat, Indy, snoozes on a nearby seat.
“We love things and mementos of when we travel, or artifacts of our lives,” Sorrell says, pointing to another shelving unit holding a handful of other trinkets.
Sorrell, a user experience content lead at CIBC, and Stevens, a manager at Queen’s Pasta Café, are among the growing number of couples across the country who are opting to forgo parenthood for financial security. A 2022 Statistics Canada report found that couple-family households without children (25.6 per cent) surpassed those with children (25.3 per cent).
When they discussed the possibility of having children a couple of years after they got married, Sorrell and her husband realized it wasn’t an avenue they wanted to go down.
“We hit a point in our lives when we were making good money and were comfortable, and we didn’t have to worry about going out for dinner or travelling,” Sorrell says. “And we knew having children would change all of that for us.”
Raising a child costs an average of $293,000 from birth to age 17 — or roughly $17,000 a year — according to Statistics Canada. Factor in inflation, and that figure is almost certainly higher today than it was when the data was collected in 2017.
But while opting for the “dual income, no kids” lifestyle can have its financial perks, it doesn’t come without its own unique set of financial challenges.
“With dual-income, child-free couples, there can be more ambiguity about financial priorities, and they need to be more proactive about their shared intention and having continued conversations,” says Melissa Leong, Toronto author of “Happy Go Money: Spend Smart, Save Right and Enjoy Life.”
‘Fundamentals still matter’
Leong says couples without children often have more freedom to design their lives, but that freedom only works to their advantage when they’re both actively setting benchmarks and making financial decisions together.
“The fundamentals still matter — having an emergency fund, maximizing TFSAs and RRSPs, saving and investing consistently, and making sure you’re still having conversations about … long-term goals,” she says.
Spending can run amok
Dual-income, no-kid couples have to be just as on top of their spending as couples with kids, says Jessica Moorhouse, a Toronto personal finance expert. “That kind of extra cash flow you may have compared to a family is very easy to spend without thinking about it,” she says. “So having a plan on what to spend on what is critical.”
Discretionary spending run amok can creep into the lifestyle of a child-free couple, adds Leong, whether that wallet burn comes from dining out often or taking frequent trips.
It’s integral to communicate about what matters most to them. “I encourage these couples to identify their ‘hell yes’ spending — the things that genuinely bring joy, like experiences building core memories with loved ones,” Leong says.
Sorrell agrees; the couple prioritizes their goals as opposed to, say, last-minute decisions on dining out. They’re also on the hunt for their first home.
If there’s a misconception about their lifestyle they often hear, it’s “You must party every night and have so much fun!” Sorrell shakes her head. “On a recent Friday night we just stayed in and watched the reboot of ‘Scrubs.’ ”
Staying on top of lifestyle creep
Moorhouse says child-free couples should open a tax-free savings account with a different bank than their day-to-day bank and shift some income to that account. “You want to forget the money is there and don’t touch it,” she says.
Leong suggests automating those savings with the 50/30/20 rule: 50 per cent of income goes to needs, 30 per cent to lifestyle, 20 per cent to saving and investing.
Keeping an eye on fixed expenses is also important, Leong notes. “Those fixed costs can creep up with lifestyle inflation, larger mortgages, car payments, secondary properties, so revisit your expenses on a schedule to trim the fat and get rid of anything that no longer adds value,” she says.
When Sorrell and Stevens vacation, they’re shrewd about one particular detail. “We don’t need to stay at the Fairmont,” Sorrell says, “and our approach is that it’s just a place to sleep. That’s where we often save money.”
Hard facts about tax
Moorhouse says child-free couples should be aware of the benefits they won’t receive from the government; they can’t access the Canada Child Benefit, a tax-free monthly payment, for example.
Finding ways to lower your tax burden is also important, says Leong, since child-free couples don’t enjoy the same tax benefits as couples with children.
Leong says to begin with the basics: prioritize your RRSP contributions when income is at its highest and maximize your TFSA. “Then use the fact that there are two of you. Co-ordinate across two incomes and use tools like spousal RRSPs, or have the higher earner cover more expenses while the lower earner invests, which can help reduce taxes both now and in retirement.”
Insurance and elder care
“If you don’t have kids and you get sick as you get older, you won’t have anyone to help you.”
Sorrell says this is one of the most frustrating statements she hears — she’s aware.
“My mother requires personal assistance, and we would be in a very different place financially were it not for disability insurance, so I’ve prioritized that since the day it was offered,” she says.
Child-free couples should prioritize laying out a plan if someone needs care for several years, says Leong. “Higher-income couples may choose to self-fund long-term-care but long-term-care insurance is another way to insure that risk,” she notes.
It’s a good idea to have a life insurance policy that could cover funeral costs or any debts a couple’s estate can’t afford to pay off after they die, Moorhouse says. “Similarly, long-term-care insurance and disability insurance could be important no matter if a couple has kids or not,” she adds.
Core documents
At a minimum, Leong says, child-free couples should have three core documents when it comes to estate planning: a will, a power of attorney for property (someone who manages your finances if you’re unable to) and a power of attorney for personal care (someone who oversees your medical decisions if you don’t have the capacity to decide).
Moorhouse echoes Leong’s advice. “Make a will and make a plan, unless you want to leave it all up to the government to decide.”
