Most married Canadians regret not discussing their financial situation with their partner before their marriage, according to a survey released today by BMO Wealth Planning Group.
Money is a significant source of friction in many marriages, and different values and interests is the number one cause of divorce cited in Canada.
Yet BMO’s survey found that 43 per cent of married couples said they had different investing styles than their spouses, and that about one-quarter of couples fight over money.
About 98 per cent of married couples think it is important to be on the same page financially as their partner, the study found.
The results are based on an online survey of 1,000 Canadians, conducted by Pollara between May 27 and 28. A probability sample of this size would yield results accurate to ± 3.1 per cent, 19 times out of 20.
Despite the importance for couples of working out a way to manage money together, most people seem to postpone the conversation about bank balances, credit card debt and spending habits until after they've wed.
Less than half the engaged couples polled had talked about how they would handle money in their marriage.
"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," Caroline Dabu, head of BMO's wealth planning group, said in a news release.
The topics married people wished they had discussed 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).
Dabu recommends that couples develop a budget together and make a financial plan that will help them meet goals such as saving for a home or planning to have a family. Couples need to agree on both short- and long-term goals, and how to manage their money.
Finances are an important key of life together, said Jean Richard, vice-president and senior consultant of wealth management at BMO, in an interview with CBC News.
"Getting married is not just sweetness and flowers. It`s like you`re a team together and you carry responsibility toward each other, toward the children and toward the people around you," he said.
He advised young couples to talk openly about how they see their future up to retirement, what kind of education their children will have, what kind of home they`ll live in and how to save for all these things.
Some people want to pay the higher prices to have a big home, while others are happy with something smaller if they can save more for financial security and it`s important to know about those different expectations early, Richard said.
One key to that all-important talk about finances is to be honest. It’s better to reveal any high-interest debt before marrying than let it be a surprise after you’ve tied the knot, he added.
It's pretty rare that young couples seek out a financial advisor before they marry, but most financial institutions offer a planning service for those starting out, Richard said.
"Planning is not having a road map that will be followed rigorously, but just know where you`re heading," he said. "The best plan will never be realized because things will change, but that`s OK if you know where you`re heading."
Why are young couples so reluctant to talk about money?
"I don`t think it`s exclusive to Canadians, it`s just human beings," Richard said.