TORONTO, ONTARIO--(Marketwired - Jul 18, 2013) - According to the BMO Wealth Planning Group, close to two-thirds (62 per cent) of married Canadians wish they had spent more time discussing their financial situation and plans for the future with their partner before getting married. The study, released today, is the second in a two-part series on the dollars and cents of weddings and marriage.
The specific financial topics married couples wished they had addressed before their wedding date include:
- Establishing emergency funds for unexpected expenses (28 per cent)
- Identifying personal short and long-term financial goals (25 per cent)
- How to manage everyday household finances (24 per cent)
- Creating and updating a will (19 per cent)
Despite these results, the survey also found that almost all couples (98 per cent) think that it is important to be on the same page with their partner with their investment goals and financial planning. However, less than half of engaged couples surveyed reported that they had not yet had a detailed discussion about their finances.
"While it's encouraging that many couples recognize the importance of being on the same financial page before they head to the altar, our study clearly shows that many are not having thoughtful discussions around finances before marrying," said Caroline Dabu, Vice President and Head, BMO Wealth Planning Group. "By having an open dialogue early on that addresses key issues such as how bill payments will be divided and identifying short and long-term financial goals, you can go a long way toward ensuring that you and your spouse will have a 'prosperous' financial future."
Furthermore, the study found that four-in-ten (43 per cent) married Canadians concede that they have a different investing style than their spouse and one-quarter often have disagreements over financial matters.
Ms. Dabu notes that having conversations about finances with a partner can often be difficult. "Arguments about money can cause serious issues for a marriage. Bringing a third individual into the discussion, such as a financial advisor, can help provide an objective perspective. A financial professional can also provide advice, keep the dialogue focused and work with the both of you to develop a financial plan."
A financial plan helps people work toward their short and long-term goals like the purchase of a new home, saving for a child's education or investing for retirement. It is a roadmap that outlines the path from where they are today to where they want to be in the future. At BMO, the process begins with a financial advisor reviewing a person's finances - including assets, liabilities, income, spending habits and investments - then building a personalize plan that takes these items and risk tolerance into account and fits with the rest of his/her life.
BMO offers the following advice to help engaged couples and newlyweds get the "money talk" started:
- Honesty Matters: Discuss the good and the bad, including any high-interest debt you may have and how you can work together to pay it down. Be up front regarding your respective debt levels and investments so you can plan effectively.
- Agree or Compromise: Make sure that you both agree on your future short- and long-term goals and how comfortable you are in your approach to reaching those goals. If one partner is focused on preservation, while another is focused on growth, it will be important to find a compromise. A financial advisor will work to develop a financial plan that will help both of you get there.
- Create a Budget: Establish how household expenses will be paid and how money will be managed. Take advantage of free online tools, such as BMO MoneyLogic, to stay on top of everyday household spending and saving. It also helps to make a pact to live within your means.
- Look Ahead: Think about your next steps in life together. Does that include a focus on travelling, starting a family or your long-term retirement goals? A continued contribution to a TFSA, RESP or RRSP will often help you reach your goals.
The survey results cited in the BMO Wedding Survey are from online interviews with a random sample of 1,000 Canadians 18 years of age and over, conducted by Pollara between May 27 and 28, 2013. A probability sample of this size would yield results accurate to ± 3.1 per cent, 19 times out of 20.
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