The survey also found that nearly 37 percent of those surveyed had argued with their partners about money. While every couple’s financial situation is different, there are a handful of mistakes newlyweds are prone to making. To help you start your marriage on sound financial footing, make sure you’re aware of (and avoid!) these five financial mistakes that newlyweds make:
Forgetting to Write Financial Vows
Don’t wait for the glow of “I do” to fade before talking finances. Use this opportunity to come up with some financial goals – both joint and individual – and the planned timelines for achieving them. Create a spreadsheet or use an online tool to lay it all out on the table: income, debt, assets and personal expenses. Don’t forget to block out a tax strategy as well. Canadians have many perks available for married couples, from tax credits to sharing tax-free savings products. Then, set a “Money Date” once a month to review, revise and make sure you’re on track.
Hiding Financial Baggage
Financial infidelity can have a lasting effect on marriages. According to Money Magazine, 22 percent of married couples say they’ve spent money they didn’t want their partner to know about. Maybe out of fear of being characterized as “bad with money”, or maybe because they didn’t want their partner to know they’re an avid collector of rare New Kids on the Block memorabilia. Either way, keeping financial secrets – be it debt or spending habits – can be an unnecessary source of tension. Be honest and remember it’s a partnership.
Marrying the Finances
Although many couples believe tying the knot should include merging bank accounts, don’t be hasty in marrying the finances. Test out different structures. If both parties have their own source of income, couples can set up multiple saving vehicles as well as a joint account where each partner contributes a certain percentage. The autonomy is a good way to take advantage of savings incentives and practice routine budgeting. As you tackle life’s milestones be sure to update and move money around as needed.
Leaning Too Much on One Partner as the Financial Guru
If one partner has more financial acumen, this can lead to one partner leaning too heavily on the other. One partner may adopt the role of lead number cruncher, but this can be overwhelming, leading to stress or resentment down the line. By allowing one partner to dominate financial decisions, half of the partnership may be in the dark. Try to make sure both parties are equally aware and involved in financial decisions.
Denying When It’s Time to Ask for Help
With all of the life changes that come with marriage, the adjustment period can be overwhelming. Before the wedding, bridesmaids and groomsmen are there to provide emotional support. After the wedding, a couple may need other support. Getting married is a time of transition, and a great time to sit down with professional financial advisor. In addition to helping establish shared goals, keeping the weight of financial decisions balanced between partners often requires an objective third party. Knowing when to ask for help can keep a marriage whole. After all, every partnership needs its supporters.
This article is intended as general information only and is not to be relied upon as constituting legal, financial or other professional advice. A professional advisor should be consulted regarding your specific situation. Information presented is believed to be factual and up-to-date but we do not guarantee its accuracy and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the authors as of the date of publication and are subject to change. No endorsement of any third parties or their advice, opinions, information, products or services is expressly given or implied by Royal Bank of Canada or any of its affiliates.