Financial Tips for Wedded Bliss

Spring has sprung.
And the wedding season has begun!

You can’t wait.

You’re marrying that special someone with whom you can share your deepest feelings, thoughts, and concerns, your goals and ambitions!

Every last wedding detail has been planned.

But how much thought have you actually given to the financial realities and responsibilities that come with marriage?

It may seem unromantic or unimportant at the moment, but the fact remains, by addressing the big money issues up front, you’ll greatly improve your chances of having the happy-ever-after marriage that everyone wants.

The good news is that all it takes to tackle these issues is a bit of collaboration, cooperation, and some open and honest communication. And as Martha would say, “That’s a good thing”.

Choose not to have the talk, and you may find Dr. Phil and his, “And how’s that working for ya’?” constantly haunting your every thought.

Now, everyone loves a good top ten list, so, here’s the list of top ten things every couple should definitely discuss before they get married.

Top Ten Financial Tips for Soon-To-Be Newlyweds:

1. Have a clear understanding of the financial reality that you’re entering into. Get all your financial cards out on the table.

What assets do you and your partner own? What debts do you have? Are there any credit issues?

2. Discuss how you’ll manage your finances.

Will you have a joint bank account, separate bank accounts, or both?

How will decisions regarding any large purchases be made?

3. Make sure you’ve agreed upon where you’re going to live after you get married.

When do you see yourselves buying your own home?

Do you have your heart set on owning a certain type of home or living in a certain city or neighbourhood?

Are your expectations realistic?

4. In regards to lifestyle, make sure that your expectations are realistic, based on the income you earn. Live within your means.

Are you spenders or savers? Will this cause friction down the road?

How much of your income do you plan to save each month?

A good rule of thumb is that you should save at least 10% of your gross income each month. Hopefully you’ll be saving closer to the RRSP contribution limit of 18%, or more if you’re saving for a down payment.

5. Talk about your career goals and how they will impact your relationship. Remember, it’s important to have a balance between work, family, and leisure time that works for both of you.

How many hours a week do each of you see yourselves having to put in to achieve your career goals?

What is the most number of hours you would be comfortable with your partner consistently working on a weekly basis?

How will household chores be divided?

How much of your leisure time will be spent doing things together and how much time do each of you want to pursue your own individual interests?

You may not have all the answers, but these are issues that should at least be discussed.

6. Discuss how you feel about having children.

Do you want to have children? How many children would you like to have and when would you like to have them?

How will children-related responsibilities be shared?

Will one of you become a stay-at-home parent? And for how long? When will the stay-at-home parent return to the work?

This decision will have a tremendous impact on your financial situation so you need to make sure that you’re both on the same page.

Not discussing this can also cause a lot of resentment and tension if, down the road, the stay-at-home parent wants to continue to stay at home, and the spouse wants them to return to work.

7. Make sure that you have expressed what each of you feel you want to do for your parents as they age.

You may not have to deal with this for some time, but none the less, both of you should have at least some idea about how the other feels in regards to this issue.

Do you see your parents eventually living with you? Do you see yourself possibly having to leave the workforce to care for them?

How will this impact your finances? How will this impact your relationship?

8. If your assets warrant it, discuss the pros and cons of having a pre-nuptial agreement.

For some, this will be a non-starter.

But even if a pre-nup just isn’t for you, you should still, at the very least, get professional financial and legal advice before either of you bring any substantial assets into the relationship (i.e., pre-marriage savings, an inheritance, or a gift from family).

For example, your parents or your fiancé’s parents may help you buy a house. Money may be given as a gift with the implied understanding that, although unlikely, if the marriage ever ended in divorce, this “gift” is to be considered a loan, and paid back to the parents in full.

If this intent has not been properly documented, the courts may view this as a “family asset” and include it in the assets to be divided. It’s important to know that not all of an individual’s assets are necessarily “family assets” in the eyes of the law. So, to better protect yourself, you should know what is, and what isn’t, considered a “family asset”. Again, professional legal advice is strongly recommended

We all go into marriage believing without a doubt, that it’s forever, however, the reality is, more than one out of every three marriages in Canada end in divorce.

If you take the realistic view that none of us can be 100% certain of what the future holds, and if a divorce would cause a considerably unfair financial loss, it’s only prudent to protect oneself as much as possible.

As a client told me with complete sincerity, “Out of respect for myself, my parents and my grandparents, I can’t fathom not protecting what we’ve all worked so hard, for so many decades, to save and accumulate.”

9. Develop a detailed written financial plan.

A written financial plan will take into account everything that’s been discussed above.

The benefit of going through a proper financial planning process is that it will force you to give some real thought as to what you both value most and what you want to accomplish in your lifetime. It will also help you set the necessary financial goals and give you a step-by-step plan on how to achieve them.

As you grow as individuals, as a couple, and as a family, your financial and non-financial goals and realities will change, so you’re financial plan will be a fluid, continual work in progress.

10. Sit down and have a heart-to-heart discussion about why you want to get married.

Now, the success or failure of a marriage obviously hinges on much more than just money-related issues.

With that in mind, the final tip actually has nothing to do with money, and everything to do with the relationship itself.

Simply put, make sure your getting married for all the right reasons!

Ask yourselves: Why are you getting married? What do you want to achieve as a couple? How do you envision your life unfolding over the years?

The most successful relationships are the ones where you have two people focusing on what they can put into the relationship, and not on what they can get out of it.

The reality is, there are expectations in every relationship, so it’s best if these expectations are fair, clearly stated, understood, and accepted, up front.

Sometimes expectations are implied through an individual’s actions, or inaction in any given situation.

Either way, the better you understand, and are comfortable with each other’s expectations, the happier you’ll be.

Go confidently in the direction of your dreams. Live the life you’ve imagined!

Live! Love! Laugh! Learn! Leave a Legacy!

Sukh Hayre, is an Investment Advisor and a financial planner with Dundee Securities Corporation.

This is not an official publication of Dundee Securities and the views (including any recommendations) expressed in this article are those of the author alone, and they have not been approved by, and are not necessarily those of Dundee Securities Corporation.