With August the most popular month in Canada for weddings, a new CIBC poll finds that only a third of couples about to get hitched or enter a common-law relationship actually had a serious talk about money. Yet, nearly everyone (99 per cent) admits it’s important to discuss how to plan and manage their finances together as a couple.
“While couples will spend several months planning, in great detail, their ‘big day’, our poll reveals that very few people actually broach the topic of how to plan and handle their finances once they begin their lives together,” says Jamie Golombek, Managing Director, Tax and Estate Planning, Wealth Strategies Group, CIBC. “When you’re caught up in the bliss of getting married, talking about money isn’t particularly romantic, but, it shouldn’t be a taboo topic. Before saying ‘I do’, it’s important to make sure you are on the same financial page, otherwise you’re setting yourself up for problems down the road.”
In his new report, For richer or poorer: Financial Planning Tips for Newlyweds, Mr. Golombek offers advice to couples whether they’re about to tie the knot or simply considering moving in together on when and how to have that money talk and how best to “marry” your money personalities.
Key poll findings include:
- Two-thirds (66 per cent) of those who plan to marry or live common law are entering their relationship in debt, including either student, personal, credit card, or mortgage debt. Yet, their top financial goal within the first two years of tying the knot is to save up for a trip or vacation (46 per cent).
- One-third (35 per cent) who plan to marry or live common law say they’ve had the money talk in detail, with 40 per cent saying they’ve only discussed how to manage finances together as a couple “briefly.”
- Of those who admitted they haven’t talked about money before the ‘big day’ or the ‘move-in’ date, most (83 per cent) said they didn’t know either how or when to address the topic or said they plan “to play it by ear.”
- 99 per cent say it’s very or somewhat important to discuss how they will plan and discuss their finances as a couple.
Be open and honest
The poll findings also show that nearly two-thirds (63 per cent) do not plan to sit down with a financial advisor after their honeymoon or enter into a common-law relationship. Yet, almost a third (31 per cent) say it hadn’t even occurred to them and admit it’s probably a good idea.
“There’s a reason why it’s called a marriage ‘contract,’ but unlike typical contractual arrangements, marriage comes with emotion,” says Mr. Golombek. “As couples get caught up in the whirlwind of excitement before their wedding, talking about money can be a delicate, very emotional topic, so it does really help to talk to someone who can be impartial, like a financial advisor, to help with difficult questions and concerns.”
Solid financial footing
It’s important to have an open and sincere discussion about finances before you take the big step and have it early in your relationship so your relationship has a solid financial footing, he says.
“Perhaps the springboard for having the ‘big talk’ about money is identifying your and your partner’s philosophies on handling finances,” says Mr. Golombek. “If you’re an impulse buyer, and your partner-to-be is a super-saver, he or she may feel your shared goals of saving for the future – for kids, a house, or a car — will be undermined.
“You and your partner don’t need to have the same personality for your relationship to be successful, but discussing your personality differences in advance may prevent tension and stress down the road.”