Last week I got an email newsletter from her about the financial to do's before saying "I do" which I wanted to share with all my couples. I think it is very important to have an understanding of your finances before getting married. I tell my couples all the time that they should never go into debt for their wedding. See what the article suggests for couples getting married!
Money and marriage – financial to-do’s before saying “I do”
One of the wonderful mysteries of marriage is how two, often very different people, can learn to live as one – and stay that way through thick and thin, the inevitable ups and downs, for many, many years. It all comes from having a strong foundation of love, mutual respect, understanding – and of your new financial life together. So for couples just starting out, here are some essential financial tips to consider.
Build a financial foundation that matches the life you want to build together Be clear on the ground rules right from the start. Decide how you’ll handle shared expenses – especially if one spouse has a greater income than the other. Will you split expenses evenly or pay a portion according to each partner’s income? Consider whether to use a joint bank account or keep individual accounts.
Check your financial baggage at the door When it comes to your credit history, full disclosure is a must. A partner’s bad – and unshared – credit history could cause some unpleasant surprises if you decide on a joint credit card or jointly apply for a loan.
Build from shared financial goals Agree on how you’ll approach major goals like buying a home or starting a family. If you have children, get started on an RESP to help save for their education.
Get it in writing It’s not at all romantic but a marriage contract or prenuptial agreement can be important if you want to protect certain assets accumulated prior to your marriage – like a business or family cottage – or to protect assets for children from a previous relationship.
Expect the best – plan for the worst If something were to happen to either of you, how will you take care of each other? Not a happy thought – but it could happen. Disability insurance can provide a steady income stream for your family if you become disabled and unable to work. In the event of your death, life insurance can provide a lump sum to your beneficiaries. Mortgage insurance can help pay off some or all of that large debt.
Make your life less taxing Reduce your tax bill by taking advantage of all available deductions and income-splitting opportunities like spousal RRSPs and pension income splitting. Use other tax-planning and investment strategies that will deliver immediate and long-term retirement benefits.
Where there’s a will, there’s a way Except in Québec, marriage usually voids all earlier wills – so update yours. Make sure it spells out exactly how you want your assets distributed. Don’t forget to also update your Power of Attorney, in which you indicate who can make decisions on your behalf if you are still alive but unable to make financial decisions.
Be sure your financial foundation is as strong and enduring as your love for each other – talk to your professional advisor about the plans and strategies that make the most sense for your unique union.
This column, written and published by Investors Group Financial Services Inc. (in Québec – a Financial Services Firm), presents general information only and is not a solicitation to buy or sell any investments. Contact your own advisor for specific advice about your circumstances. For more information on this topic please contact Janet Gray, Investors Group Consultant at 613-798-7700 or 1-800-461-3707.
Helping Boomers and their families live a Richer life.
Janet Gray, B.A., B. Admin., CFP, RHU, EPC, CPCA
Financial Consultant, Elder Planning Counselor
Investors Group Financial Services Inc.,
Suite 200- 1525 Carling Ave., Ottawa, ON K1Z 8R9
Phone (613) 798-7700 Ext . 248
Fax (613) 798-7705, Toll Free 1- 800- 461- 3707
Accepting new clients. Thank you for the introductions.