Wedding season will soon be in full swing with many Canadians will tying the knot and making the journey down they isle for better or for worse. Sadly, almost half of these marriages will end in divorce, stats citing that money issues are a leading cause of marital strife and the eventual demise.
So what should you be thinking about before that life changing day? What questions should you be asking?
Prior to marriage – learn about your partner’s attitude towards money. Are they are saver? A spender? Dependent on credit cards or a ‘buy now pay later’ purchaser? You want to know sooner than later if you have a similar vision and goals regarding how you will spend and save your money.
Have the talk–Do you know your soon-to-be souses financial status? Do they have student loans that remain unpaid, or a car worth less than the loan out on it? Is their credit score damaged? You should know the financial health of your partner, good or bad. A poor financial past can put a cramp in your plans to buy a house down the road, so talk about it early and have a plan, if needed, to move past it.
Heads-up on – the wedding budget. Lavish events with big budgets may seem the norm in today’s celebrity focused culture but it’s far beyond the reach for most of us. So, for the rest of us being money minded leading up to the big event can be a necessity, because the reality is, overspending on the wedding day can leave a bitter debt ‘aftertaste’. Bottom line: a wedding is a celebration . . . but a marriage is a long-term commitment. Setting a responsible budget for a wedding based on your means (including savings and/or family contributions) can go a long way to starting a marriage in a financially stable position.
How much debt is your fiancé bringing to the marriage? Their current financial obligations will now impact your ‘family’ finances for day-to-day living—and, your future plans. Ask too if they are current with their obligations to Revenue Canada (CRA). You won’t be liable for any debt they have to CRA but it’s an indication of their approach to personal finances—and, has implication to your joint lifestyle if they have significant arrears to address. Keep in mind: financial irresponsibility can lead to a poor credit score, later affecting the probability – or ease – of buying a new home or other large joint purchase.
If you intend to register or re-register real property (home, vacation property) in joint names upon marriage, get advice from a lawyer first. Understand the implications—including the very real likelihood that each of you is then deemed to have equal, shared ownership. Consider: you may have brought more assets to the marriage and if your partner was later to go bankrupt, half of (now) joint assets could be lost.
Getting a supplemental credit card under your spouse’s existing card may seem to make sense and perhaps comes with a ‘romantic notion’ of your new status as a couple. Understand the risk: the moment you make your first purchase on that secondary card you are now jointly and severally liable for all charges on that card whether made by you or your spouse. If your spouse defaults on the credit card you are responsible for the entire debt.
If you are facing financial struggles or would like some help with managing your debt—one of our professionals is available to discuss your situation. There are many options available to help and you may not need to go bankrupt. Contact us for a confidential, no-obligation, complimentary consultation toll free from anywhere in Western Canada 310 8888.
Visit us online www.gtdebt.ca or www.gt.alger.ca