Pattie's Blog: Getting married? Better say your financial vows!
Rui Wang (left) and Paul Miller seal their marriage with a kiss during their wedding ceremony in Toronto on Sunday October 10, 2010. (Chris Young / THE CANADIAN PRESS)
Published Friday, June 29, 2012 9:01AM EDT
It isn’t even July and I’ve been invited to two weddings already. I have no doubt the busy wedding season has already begun. Tough as it is for young couples to organize a wedding (let alone pay for it), it’s the next 50 years that can be the real challenge. Choosing a dress, location, sending out the invitations and devising a seating plan to keep all happy, is so easy by comparison.
According to my friend, divorce Lawyer Michael Cochrane, for most married couples arguments about money top the list of reasons why they fight and may in many cases not make it. The fact that so many struggle to get over this hurdle should be a good enough reason to sit down and figure it out with your spouse or partner in a very frank discussion.
You’ve likely bared your souls to one another and yet when it comes to discussing your financial situation, talking about money is very tough. I don’t think it has to be. It all begins with goal setting.
I think it is very intimate to discuss and dream about your future together. Regardless of what you want, you both need to sit down and set some common goals together that you can not only get behind but get excited about. Short term goals (like paying off the wedding), medium terms goals (a house with the white picket fence) and longer term goals (saving for retirement).
Having targets that are specific and discussing ways to achieve them is very empowering and has the potential to bring you so much closer together. You are building your financial life together. You are in this relationship emotionally and financially.
Couples often decide to pool their assets under a joint bank account. That is what we do in our household. However, others I know are very successful at keeping them separate. Bottom line is you should do whatever works for you.
A third option to consider is a combination of individual and joint accounts. Here is how this could work: your paycheques are deposited into individual accounts. A predetermined amount is transferred to the joint account on a regular basis. You can set that up weekly, or bi-weekly. Expenses like the mortgage, utility bills, car payments and so on can come out of the joint account. Variables including RRSPs and charitable donations might be referred to an accountant to ensure you get the biggest bang for your buck. What’s left in the individual account can be spent as you please. As well, everyone should have their own credit card and credit rating.
I think it is so important to honestly discuss your spending habits and expectations. I’ve seen it all too often when one partner just doesn’t want to pull their financial weight in the household, but problems also arise when one partner feels they have to ask for money, especially after a couple decides to have one parent stay at home.
In discussing your savings goals, spending will obviously come up and I wouldn’t want anyone to become a slave to a budget. If you want to buy that designer handbag or Sydney Crosby rookie card, it would be nice to do so without asking. Simply putting spending limits into place that make sense, and that you both agree upon, is a good place to start. Gone are the days of impulse buying and destroying your budget.
Spending and saving is a start but what about your debt philosophy? Ask the question, how quickly do you want to pay down any outstanding debt and build from there.
A few more things to consider:
- Change your beneficiaries.
- Review your insurance policies for under coverage or duplicate coverage.
- Make a will or update your existing will.
No wants to become a marital statistic and this is just a start to eliminating money issues as a source of stress….but it is a start.