Newlyweds Need to Lay Financial Cards on the Table

Newlyweds Need to Lay Financial Cards on the Table: BMO

Article in Property Wire

 

The cornerstone of all relationships is truthful communication- especially when it comes to finances, according to a new study released by the Bank of Montreal.
Despite the fact that an overwhelming majority of Canadians agree that a couple getting married needs to share financial information and goals, a surprising number of newlyweds are saying that they do not.

Despite the 92% of Canadians who indicated that it is necessary to be ?on the same page financially? with your spouse, 45 % discussed how much money and debt they were bringing to the marriage and their short and long-term saving and investing goals (e.g. purchase of a home/cottage, kids' education, travel, etc.); 24% spoke to their spouse about establishing a financial plan and 22% shared their views with their spouse on how they envisioned their ideal retirement.
Most notably- and perhaps most troubling, 35 % did not discuss any of the issues outlined above at all.
"Before two people get married, it's important that they have an open dialogue about their current finances. This is the ideal time to start developing a financial plan as a couple, including identifying short and long-term investment goals," says Tina Di Vito, Head, BMO Retirement Institute. "It is especially helpful to have a financial professional at the table, not only to offer advice and assistance, but also to provide an objective point of view."
A new couple will likely take on many financial challenges together, many of which require planning.
Of those surveyed, 57 % of married or engaged couples have or are planning to purchase a home in the next two years.
So where to turn for a down payment? The answers were varied. 68% said personal savings; 27% said loans; 26% indicated that they would use investments like TFSA?s or RRSP?s; finally, 21% said that they would be relying on parents or family members for a down payment.
?While we can see that Canadians are looking to a variety of sources to finance the down payment of their homes, it is important for couples to identify early on what these sources are and have an upfront discussion about what they can afford," says Laura Parsons, Mortgage Expert, BMO Bank of Montreal. "Part of the process includes stress-testing your budget using a mortgage payment based on a higher rate to make sure you can realistically afford what you've signed up for over the long term."