A lifetime of momentous financial decisions for couples often begins with how to pay for a wedding. For some thoughts on how to handle the money side of weddings, I invited Sandra Abdool, a certified financial planner (CFP) with Royal Bank of Canada, to do a Q&A.
Ms. Abdool has 24 years of experience as a planner and she has some thoughts on both weddings and what comes afterward in the financial life of a couple. Here’s an edited version of our e-mail discussion:
Q: In setting the financial tone for a relationship, how important is it for a couple to manage the costs of their wedding?
It’s really important for a couple to manage their wedding costs because they can add up very quickly and catch one or both partners by surprise when the final bills come in. This can then have a negative impact on other financial goals the couple wants to achieve in the short term. And your comment about setting the financial tone for a relationship is key. Being on the same page financially and making money decisions together – and this may well begin with how you finance your wedding – can go a long way toward helping couples build a strong relationship.
Q: What would you recommend to a couple with enough savings to pay for a big wedding: Enjoy the celebration, or think small and save money for a house down payment?
Planning for a wedding can consume a couple … and then a few months later, the event lives on in memories. You don’t want it to live on in debt. I think the pandemic has opened up simpler, less expensive options for couples to consider, which is a good thing because it keeps any related debt to a minimum. And, yes, if you think smaller and save money, you can put those savings toward a house down payment. You also may want to use that money for other life goals. Your wedding day will likely always be a special part of your memories as a couple.
Q: What are the key financial points you want to know about your partner before moving in together or getting married?
I can’t emphasize enough how important it is to be completely transparent with your partner prior to getting married. No one wants to come into a marriage and then be blindsided with past financial difficulties or debts they weren’t aware of. This is another reason that openness and transparency are critical before moving in together or getting married. A few questions you can ask your partner to open the conversation: Are you a spender or a saver? What are your big financial goals? Here’s mine – do they match?
Q: In your experience, what are the biggest financial flashpoints causing stress for couples these days?
Stress occurs when couples don’t have similar priorities. In a recent survey RBC commissioned, almost half of couples said finances are a top pain point in their relationship – and wedding finances in particular were called out as stressful. Some cited conflicts with partners who have significantly higher wedding expenses in mind, while others noted challenges with partners who want to have their “dream wedding,” regardless of costs. When looking at financial discussions in general, one-third of the couples we surveyed told us they weren’t comfortable discussing each other’s current financial situations – and this was especially true for men. When you aren’t comfortable with these conversations, it makes it challenging to figure out how you will reach any shared goals, or even to set those goals for yourselves as a couple.
Q: How good are couples at talking about money?
Couples aren’t talking about finances often enough. Our recent survey showed that 30 per cent talk about this one to two times per year and 5 per cent said they never do. It’s important to have frequent and open communication about how you want to spend your money. You could have a money date once or twice a month where you talk openly about finances. I can tell you that the more you talk about it, the easier it gets.
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Rob’s personal finance reading list
Travel mistakes to avoid
This list of rookie travel mistakes is useful reading for seasoned travellers who haven’t been on a plane in a while. One is leaving too late for the airport. Have you ever noticed that you can divide the world into two types of people – those who want to arrive at the airport early for a trip and those who prefer to wait until the last minute. I’m an early guy – happy to relax at an airport bar or café before a flight. Now for a curmudgeon’s take on travel that accurately deromanticizes air travel.
Avoid RESP tax traps
Strategies for minimizing the tax hit on withdrawals from registered education savings plans, or RESPs. It should be possible to structure withdrawals so students pay zero tax on the RESP money they use.
How to collect CPP and OAS while living abroad
A useful rundown for Canadian retirees who reside outside the country, or a planning to do so.
REIT petite
A short but helpful guide to real estate investment trusts. How much of your portfolio should focus on them, and a few ways to invest in them using REIT ETFs.
The Money-Free Zone
What else but the Jackie Wilson classic, Reet Petite?
Who I’m following on Twitter
A must-follow if you want to know what’s going on in the housing market – John Pasalis of Realosophy Realty.
In case you missed these Globe and Mail personal finance-related stories
- Employees should consider these strategies before year-end to pay less tax
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- Mind the (pandemic benefits) gap
More Rob Carrick and money coverage
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Even more coverage from Rob Carrick:
- 🎧 Catch up on Stress Test: Are your parents giving you money? • Why it’s time to stop shaming the renting lifestyle • Is now the right time to buy a house? • Why are young Canadians leaving the cities they love? • Eating in: How COVID-19 has shifted our food spending • Crisis-proof your finances? • Can you afford to live downtown? • The cost of kids
- ✔️ The housing file: The housing boom is ripping apart the financial fabric of Canada • Shut out: A well-qualified millennial home seeker throws up his hands after losing multiple bidding wars • Big city housing affordability is over – now what? • She sold her Toronto house to retire somewhere cheaper, but it didn’t work • How young adults and the whole country win with a tougher mortgage stress test for home buyers • Can’t afford your house? It’s likely not your fault
- 📈 Investing: Robo-advisers have grown out of the novelty stage. Here’s help in finding one right for you • The 2021 ETF Buyer’s Guide: Best Canadian equity funds • The 2021 Globe and Mail online brokerage ranking: Who’s best for investing … and answering the phone • Are these the stock market returns of a lifetime? • On the cusp of retirement and wondering about an ETF that pushes the limits on aggressiveness
- 💰 Your money: The five most important numbers for checking the health of your personal finances • Today’s freakishly low mortgage rates can’t last. What will pandemic home buyers do when they rise? • There’s a cost in money, isolation and family stress when seniors choose to remain in their own private homes • Taking CPP early can cost you $100,000 and limit your long term options • Fleeing the city for the suburbs? Watch out for higher property taxes, more cars and other costs
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