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Managing your Money
'Talking about money is sexy'
shared by Christy Kelly

March 2, 2017
www.saugeentimes.com

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Financial health – or rather, the lack of it – can be a romance killer. Financial issues are among the biggest reasons why couples split up.* In fact, it’s been estimated that money problems are the prime cause of 90% of divorces**. So, if you’re entering a relationship, already in one, or newly married, how do you talk about what could be the biggest elephant in your emotional room: your personal finances as they are now and as you want them to be through your life together?

The experts tell us that communication, building trust, and honesty are vital keys to healthy relationships***. And that’s why talking about money is sexy – because it’s a very good way to be open and honest with your partner while taking necessary positive steps for building your relationship and a solid financial future together. Here are some tips for successfully integrating your financial lives fairly and in ways that match your shared lifestyle.

• Never keep big or small financial secrets! Each of you should disclose assets, financial commitments (such as loans) and credit history. Full disclosure is a must because if you’re considering sharing a credit card or applying for a loan together, your partner’s bad credit history could lead to some unpleasant surprises.

 • Recognize your differences. You may be a saver; your partner may be a spender – create a financial framework and budget that suits both of you.

 • Decide if it’s best to maintain separate bank accounts, credit cards and investments or to merge some or all of these financial items to eliminate duplication and enhance financial benefits. (For example, by pooling your investments you may enjoy a more robust portfolio.) Make your decisions with a clear understanding of tax and legal implications.

 • Decide who will manage day-to-day finances – paying the bills and so on – and who will manage your overall financial affairs. If one or both of you brought personal assets into the relationship – a car or home, for example – should you keep them or sell them?

 • Have a frank discussion about how you are going to achieve your financial goals such as buying a home or starting a family. Talk about your finances and financial goals regularly.

 • A marriage contract or prenuptial agreement isn’t the most romantic notion. But they’re especially important if you want to exclude certain assets from an equalization of family property upon relationship breakdown, like a business or family cottage, or to protect assets for children from a prior relationship. Don’t wait for irreconcilable differences to arise before speaking with a family lawyer.

  

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• Plan to save on taxes. Although couples must file separate individual tax returns, there are many tax-planning strategies that can reduce your total tax bill now and in the future. Take advantage of all your deductions and income-splitting opportunities including, where appropriate, pension income-splitting and/or spousal Registered Retirement Savings Plans (spousal RRSPs), both of which can deliver tax savings.

 • Arrange life, disability and other insurance coverage to ensure each of you is protected if one partner becomes disabled or dies

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This column, written and published by Investors Group Financial Services Inc. (in Québec – a Financial Services Firm), and Investors Group Securities Inc. (in Québec, a firm in Financial Planning) presents general information only and is not a solicitation to buy or sell any investments. Contact your own advisor for specific advice about your circumstances. For more information on this topic please contact your Investors Group Consultant.

 

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Thursday, March 02, 2017