Toronto (February 11, 2008)… First comes love and then comes marriage. Unfortunately for far too many couples, the honeymoon quickly wears off as financial issues emerge, and they come to the cold realization that they have started their new lives already strapped with stressful debt. But don’t let debt ruin your marriage.
“Marriage and debt are a stressful combination. Some bring their own personal debts to the marriage,” says Jeff Schwartz, Executive Director of Consolidated Credit Counseling Services of Canada Inc., “Others start racking up credit card bills as they plan their wedding and honeymoon together.”
The Vanier Institute of the Family (Divorce: Facts, Causes and Consequences 2008) cites “money problems” as one of the top reasons people give for divorcing. A Divorcemagazine.com poll in 2006 also said 6% of its respondents gave financial issues as their primary reason for a break-up.
So, what should couples do as they enter into their life together to avoid falling into debt and ensure a healthy financial lifestyle? Schwartz offers the following advice to avoid financial issues in your marriage:
- Come clean with your spouse! Disclose your income, your debts, your assets, and your investments. Don’t hide your financial issues. It’s not a bad idea to exchange credit reports before you marry. Come up with a specific dollar amount for purchases that are so big the couple has to discuss and agree to them together.
- Be realistic about your monthly expenses. Don’t add another car payment if it means getting into debt. Don’t make any major purchases that you can’t pay back. Often, problems develop when two spouses have different financial expectations going into the marriage. Develop a budget for your monthly expenses together.
- Keep one joint account. Both spouse’s paycheques can be deposited into the joint account, and all bills paid from it. That way, spouses know where they stand as a couple and account costs may be kept to a minimum because of a higher combined balance. Keeping individual accounts will also give new couples personal independence.
- Pay Your Bills On Time. Whether it’s a shoebox or Internet banking. The important thing is that you have a system that keeps you paying bills on time.
- Remember that sharing the wealth also means sharing the debt. In a marriage, you don’t just combine your income. Be aware that once you are married, any credit accounts, including car loans, credit cards, and mortgages, will show up on each spouse’s credit reports. The husband’s use of credit impacts his wife’s credit report and vice versa. If your combined debts are overwhelming, seek counselling for your financial issues before it starts affecting the marriage.
- Save, Save, Save! “If two households are joining into one, you should be able to save one entire salary,” says Schwartz. “Although couples don’t usually cut their expenses in half when they marry, there’s actually no better time in life to live lean than that first year of marriage. Avoid debt. Squirrel away as much as you possibly can, and you’ll have the down payment and diaper money when you need it.”