Love and marriage and finances
Provided by RBC Wealth Management
and Dave Dupont
The cost of a wedding increases annually as couples focus on creating a unique, personal experience for their guests. In March 2014, the popular wedding website TheKnot.com released its annual Real Weddings Study that captures detailed information on the average cost of a wedding as well as other trends and statistics related to American weddings. In 2013, the average wedding cost excluding the honeymoon was $29,858.
If saving for a wedding wasn’t a financial goal leading up to marriage, newlyweds are likely to enter wedded bliss with the burden of debt.
Determine your financial personality
A first step is to have an honest conversation with your significant other. If you haven’t already, sit down with your betrothed or new spouse and have a heart-to-heart talk about your financial picture. This means discussing everything — salary, current savings and investments, assets and debt, etc. This should also include a discussion about future short- and long-term goals. Do you plan to go back to school for your MBA? Do you want children? Will you need a bigger house? When and where do you hope to retire? These are just a sample of the many issues that need to be discussed.
This conversation can be a first step toward learning each other’s financial personalities. Everyone looks at money and finances differently depending on their experiences and how they were raised. These differences are why conflicts can arise. When it comes to wedding debt, one person may assume it will be paid off immediately to reduce interest payments while the other may be content to make payments over time. Going into marriage with an understanding about how you are going to approach finances as a couple is important.
From there, determine how to blend your finances and who will be responsible for day-to-day bills or long-term financial obligations. Decide a minimum threshold for big purchases that requires a discussion with your significant other so a car showing up in the driveway one day doesn’t result in a big fight the next day.
Committing financial “until death do you part”
Despite its inclusion in the wedding vows, most newlyweds don’t want to think about death. But taking action early may prevent you from the need for more difficult conversations down the road.
Once the nuptials are completed, change your beneficiary documents, including insurance policies, retirement accounts, benefits, wills, trusts or any document that requires the designation of a next of kin. Give your spouse power of attorney and designate him/her as a health care proxy in the event of illness or disability.
This article is provided by Dave Dupont, a Financial Advisor at RBC Wealth Management. RBC Wealth Management does not endorse this organization or publication.
RBC Wealth Management, a division of RBC Capital Markets LLC, Member NYSE/FINRA/SIPC