Financial planning before the big day

He suggests starting with a monthly budget. Whether or not the couple intends on opening a joint bank account or maintaining their individual accounts is a personal choice, he says, although operating a combined account can offer couples the empowerment of knowing each financial transaction.

Young couples should then identify their life goals. Roulston says this exercise is particularly important as making the transition from a single financial plan to a combined one can be challenging, especially if both people have different future expectations. “Now your life goals are being matched with someone else’s and it’s very important to write out what those life goals are so you can work towards them,” he explains. “Sometimes couples will say, ‘I didn’t know you were planning on that.’ Unless I know what someone wants to achieve, I can’t do a financial plan for them.”

Roulston identifies three key areas that warrant discussion: having children, buying a house and changing occupations.

“Those are the biggies that come up which maybe people haven’t put 100% thought into,” he says. “It’s important for us when we’re doing plans because we have to know what people’s life goals are. If two people are saving for a house, I need to know that in four years all that equity is going to be put towards the house,” he notes, adding he’ll then help the couple with further financial adjustments such as changing retirement projections to account for the fact the money that initially was going towards their RRSPs may now be going toward a homebuyers’ plan.

Another reason couples shouldn’t wait until after the wedding to start planning is so neither person is left in the dark over a newly-acquired debt load. “It’s important to talk about the financial planning beforehand so there are not surprised if one person finds out the other has $60,000 in student loans — which isn’t that uncommon nowadays,” says Roulston.

Sandra McLeod, CFP, and director of succession and estate planning at Grant Thornton LLP in Toronto, notes a different set of rules usually apply to older couples (35-plus) who may have already been married in the past. Common to this demographic is that both sides are usually going to be fairly well-established financially, rendering it equally important they seek the help of an advisor. “When you’re looking at putting any kind of lives together, everyone should have a financial plan, but this is a great time to be updating it. And if you don’t have one, then absolutely get one that deals with joint assets,” she says.

These more established couples will be faced with their own sets of planning issues, McLeod says, such as marriage contracts, family trusts, combining families and/or homes and caregiving of older parents.

“There are just a lot of things to be aware of, especially when you’re getting married for the second or the third time,” notes McLeod. “When you’re younger, you’re both just really starting out so you don’t have as many of these issues to think about and they’re not as complex.”

McLeod notes such financial complexities strengthen the case for doing your homework when young — even before getting out of university and regardless of whether marriage is in the cards. “It’s a time to start saving and start planning for your own future because you don’t know if you’re going to get married. Today 50% of marriages end up in divorce. You really need to at every stage make sure that you are in control, know what’s going on and have a plan and you’re working toward.”

Filed by Heidi Staseson, Advisor’s Edge heidi.staseson@advisor.rogers.com