Money and Relationships: Conversations before Marriage

Ahhhh….love, the one thing that makes the world go round. So you found the love of your life and you are ready to settle down. Now what? You’ve set the date for the wedding, appointments are booked, now what’s left to talk about? Your finances!

Your finances in a long term relationship are very important. Whether you are married or in a common-law relationship, how each of you manages money can make or break your relationship. Many relationships end because of finances not being managed properly. Here are some things you all should talk about or at least know about each other before getting married.

1. Credit Score/ Report

Knowing your partner’s credit score and history is important. Even more important is their understanding of how credit works and what affects their credit history. This is a conversation my husband and I had in our pre-marital counselling session before we got married. Let’s just say, that is that conversation didn’t go, we probably wouldn’t be married lol

Why is your credit history soo important? In my blog “Debt vs. Credit”, I talk about all the things that affect your credit history/score. If your credit is not in good shape you ability to get a car loan, line of credit, and a mortgage can be greatly affected. You could be declined for many of these things. Or if you do qualify, your interest rates may be very high. It’s important to check your credit history about once a year to make sure there are no errors and that everything is being reported properly.

2. Budgeting

My husband and I didn’t start budgeting until about a year into our marriage, when we finally had to make a plan to pay off all our debt. If we had spent the time to do this in the beginning, we probably would have been in a better position to achieve some of our goals.

Spend some time talking about what you want to achieve as a couple and some of the things you can put into place before you get there. Check out “Budgeting for Your Future” for tips on how to set up a sustainable budget.

“If you fail to plan, you plan to fail.” – Unknown

3. Saving

My husband and I each have our own savings account (all our other accounts are joint). In these accounts we deposit an agreed upon amount that we each can have that is outside of our expense and joint savings. You can call this our “spending money.” This can be used to buy whatever we want for whoever we want, etc. This is very useful when you want to surprise the other person for their birthday, etc.

4. Investing

Unlike chequing accounts and savings accounts that can be joint, there are not as many joint options for investing. However, you can make your spouse a beneficiary of your investment accounts just in case you die suddenly.

There is one investment vehicle that can give you great benefits at tax time and that’s the Spousal RRSP. Basically how it works is by offsetting the higher income earner’s income taxes by contributing to the other partner’s spousal RRSP whose income is significantly lower. This can save you from paying a lot of taxes and can be a great benefit later down in life when you both retire. Check with your Certified Tax Account (CPA) to see if this is right for you.

At the end of the day, it is very important to be on the same page with your partner when it comes to finances. Greatness is achieved better together. It’s time to #levelupyourwealth !!