With my very own wedding just around the corner, I realized I have some financial insights to share:
Everyday Finances
You thought taking care of your own finances was hard enough. Now try adding personality dynamics and the need for proper communication into the picture. Before committing to marriage, you should talk to your partner early and often about what money means to them. Just ask any marriage councillor and they will tell you that money is one key issue that can put major stress on a marriage.
Prenuptial agreements?
If you’ve watched Entertainment Tonight or TMZ recently, you’ve probably heard plenty about prenuptial agreements. For most of my everyday clients, prenuptial agreements are not so common. However, don’t dismiss this idea. After all, many Canadians are marrying later in life and have already gathered significant assets. So spelling out the terms of separation prior to a divorce can save plenty of emotional and financial resources down the road in the event of a marriage separation.
On Marriage and Income Taxes
There are definitely some synergies and preferential tax treatment for Canadians who are married. Some of them include pension income splitting and the transfer of unused tax credits from one spouse to another. Speak to your Financial Advisor about what getting married means to your tax return.
Family Protection
Given my added financial responsibilities to my new wife and her five year-old son, I realized the need to purchase additional life insurance to properly insure the house mortgage, establish an income replacement plan in the event of my death and secure our son’s post-educational future. For those with no group disability benefits, an income replacement review is also critical to ensure your family can get over this hurdle. These are some of the considerations that every newly married couple should be reviewing.
Spending Your Money
Establish a monthly spending plan early on in a marriage. You may have heard the wise old advice of “paying yourself first”. This advice was true in years gone by and is still true today. Commit now to the future of your family, your children and more importantly yourself. After that, your money takes on a number of priorities; household bills, vacations, entertainment costs (yes, you can still hang out with your friends from time to time), etc. By creating a spending plan, you may be surprised to find out how easy the path to financial success can be.
