The Best Combination: Self-Employed and the Employed

The Best Combination: Self-Employed and The Employed

Growing up, I always wanted to be in a relationship with someone who was self-employed so that we could reap the best benefits and be a united, superpower duo-couple.  I know, this is an odd desire as a young adult isn’t it?  Perhaps it was because my dad always was self employed and I could see that his schedule was very flexible.  My mom worked as an employee until I was five and then she became a stay at home mom.

I knew that I wouldn’t have what it takes to be self employed completely, as I like the safety net and security of gainful employment.  I also really like having benefits, I know that I’m paying for it in having a lower salary (because people that are freelancers tend to make more salary-wise in lieu of benefits such as sick time, vacation time, health and dental benefits).  That’s why, when I met my husband, I was happy that he was self-employed, because we could then unit to form my idealized combination.  Here’s why I think the best symbiotic combination is the self-employed (by self employed, meaning sole-proprietorship or incorporation) and employed couple:

why the best combination is a self-employed and employed couple

 

The Health Benefits

Prior to meeting me, my husband went to the dentist maybe once a year or once every few years.  One of his really good friends is actually his dentist (who understands self employment as well since apparently he goes to the dentist very infrequently as well!).  Since getting married, my husband now goes to the dentist every 6 months regularly because he now part of my health and dental benefits provided by my employer.  He now has extra clean teeth!

He also has any prescription drugs that he would need taken care of as well because of my health benefits.  In addition, previously when he traveled he would have to buy medical insurance, now that’s also taken care of too thanks to my health care out-of-country emergency medical benefits.

The Tax Benefits

The deductions available to people who are self employed are plentiful, especially in Canada.  Canada is very generous to people who work for themselves.  You can deduct meals, work at home expenses (this includes maintenance fees, rent, electricity, Internet, cellular phone plans) and you can also deduct your car payments, repairs, and gasoline.  Business losses are also deductible against other kinds of income, such as investment income.  Because of these tax benefits, the employed partner will also benefit as a family.

Unfortunately, there are some changes from the Liberal government that will be coming which will decrease these tax benefits for small business owners.  Million Dollar Journey has a blog post outlining the potential changes and how to mitigate them.

Flexibility

For those with children who are part of an employee/self-employed couple, there is a lot of flexibility.  For example, I know a realtor who stays at home with his son on most days so that they don’t have to pay for expensive childcare (because saving for a baby’s first year is enough expenses to worry about) while his wife works her 9-5 employee job.  If both were working 9-5 and employed it would be difficult to get time off to take care of children and to clear it with management.

Security Blanket

People who are self employed aren’t required to pay into government mandatory deductions such as employment insurance, so for those that are self employed, having an employed spouse is helpful, just in case one income gets hit (as a self employed individual there is inherently more risk with doing business), you have another income to back it up.

Retirement and Survivor Benefits

Finally, should my self-employed husband decide to poison me with arsenic one day, he would be eligible to receive survivor benefits and receive my defined benefit pension, a gold plated pension.  For those who are self employed, there is no company provided benefits for retirement, or RRSP matching, or defined benefit pension.  There are individual contributions to RRSP and self reliance.  However, being coupled with a person who is employed, the self-employed person can receive these benefits should unforeseen circumstances happen to the employee of the couple.

The Downsides

Of course there are downsides to every gloriously depicted scenario.  With someone who is self employed, they have a lot of control (well usually anyway) over their schedule.  They can take July, August, and December (you know the most popular time to take time off) off if they wish, but for someone who is employed, there may not be as much flexibility,  Most employees get 2-4 weeks of vacation a year and it can’t all be when everyone else is on vacation (July or August) unless the employee is a teacher by profession.

Readers, what do you think of the Self-Employed/Employed match?  Has it worked out well for you or would you prefer it to be another way (e.g. both self employed or both employed)?

The Best Combination: Self-Employed and The Employed

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About genymoney

GYM is a 30 something millennial interested in achieving financial freedom through disciplined saving, investing, and living a minimalist lifestyle.

14 comments on “The Best Combination: Self-Employed and the Employed

  1. Hello GYM, My wife and I have been in that position for the last several years. In fact we have both been in each of the roles over the past 10+ years. First she was the self employed one, now me. The key is that each of partners is bought in and neither feels like they are getting the best of it or getting the worst of it. If not, it could be a source of tension. And no good relationship needs that. Tom
    Tom @ Dividends Diversify recently posted…The Lights Are on But No One is HomeMy Profile

    • @Tom- That’s good that both of you know what the other role is like! I think both roles are great for different reasons. My husband is very happy being the self-employed one and I’m very happy being the employed one.

  2. My wife and I are in this situation also. There is pro and cons like you said in your article, but I think it is a great balance for my family. Not paying for extended benefits is sooo nice.

    • @Steve- I love not paying for extended benefits! My husband’s best friend is a dentist and he is now seeing him regularly for dental checkups since we got married haha 🙂

  3. Hi GYM,

    I think these are all really valid points. We are both full-time employees right now besides side hustles but the long-term goal is to transition into an arrangement like this. There are a lot of benefits to working for a big corporation but once you position yourself in a better spot over the years there comes a time when you need to make a move!
    Damn Millennial recently posted…The Lights Are on But No One is HomeMy Profile

    • @Damn Millennial- Yes, it would be nice to ‘stick it to the man’ and not have to answer to anyone except for yourself! 🙂 Sometimes I have those days too.

  4. Hello GYM!

    I like the idea of the self-employed and employed combo. But maybe eventually both self-employed down the road (if that’s ever possible haha).

    At the moment, we’re both working full-time. The great thing about dual-income for now at least, is that we can both work hard at saving/investing in whatever we can. This would allow us to build a big enough nest egg over time (hopefully) so that one of us can quit and become self-employed. Of course, the downfall is that we’re losing close to 50% income, which is quite a bit. And who knows, self-employment may not even work out as expected, and nothing is ever risk free. But at least this is relatively less risky because there’s still one person that’s generating income from a full-time employment, right? On top of that, I guess if worse comes to worst, the other person can always go back to working for a company.

    I guess at the end of the day, we’re both trying to escape, but one of us has to get out and try to free the other. It’s something that we both have to figure out still lol…
    fin$avvypanda @ finsavvypanda.com recently posted…10 Ways To Be Financially Prepared For Christmas – Especially #2 and #3My Profile

    • @FSP- Hello Fin$savvypanda! Yes, that would be nice (two self-employed being able to schedule their own schedule for work, or better yet, two early retirement! haha). Self employment can work well, some people make more self employed than as an employee (actually many, I would say) but it does take a certain level of ‘oomph’ and ‘gusto’ to say goodbye to a steady paycheque.

    • @Margin of Saving- I know 🙁 so true! Imagine if this was a opening line on a first date “so, are you self-employed?” lol.

  5. I never thought about in such concrete terms, but this is a goal that my husband and I have! We are both employed now. Since he works in education he gets summers off, but his schedule is very inflexible during the school year. I work year-round, but luckily have the flexibility to make my own schedule (somewhat) and take care of things, but not like it would be if I was self-employed.
    Femme Cents recently posted…My 2018 goals (and a 2017 recap!)My Profile

    • @Femme Cents- That’s good that you have some flexibility! It’s so important when you have a little one- if they get a cold or vomit when they are in day care, they have to come back home right away.

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