The cornerstone of all relationships is truthful communication, especially when it comes to finances. Despite the fact that an overwhelming majority of Canadiands agree that a couple getting married needs to share financial information and goals, a surprising number of newlyweds do so. Less than half have discussed key financial matters prior to marriage, including debt, savings goals and establishing a financial budget/plan and 57% of newly married or engaged coiples have or are planning to purchase a home in the next two years.

Because there is no formal education in the school system teaching young people about credit and finances, the above statistics are not surprising. However, knowing that financial stress is a major cause of marital problems and can ultimately lead to divorce, makes the stats scary indeed. The biggest reason for mortgage default and bankruptcy is financial problems.

‘Managing credit is also very important. Knowing not to let balances exceed half the limits, not to seek new credit on a regular basis, understanding that is important not to apply for all credit jointly, and having one’s credit remain separate are basic tenets of maintaining a good credit rating.

With new home buyers, Tracy and I emphasize how important it is for both spouses/partners to plan and manage their finances together. It is a mistake to allow one spouse to be responsible for paying the bills, leaving the other in the dark. Ideally, everyone should allocate part of each paycheque towards savings. Five to ten per cent is common. This important discipline lays a foundation for responsible ‘spending’ which we see as the biggest cause of financial problems due to the availability of easy credit.

Buying a house changes everything. Finances become so much more complicated than before. So many new things are needed. So many new and unplanned expenses just ‘happen’. Buying a new car, furniture and appliances are the three most common purchases that put heavy pressure on one’s budget. Before you know it you are over your head. The wife gets pregnant, her income drops adding more pressure.

Call us today to help you plan your home purchase. We will help you get a solid understanding of your credit position,(the banks won’t do this for you)your finances and your ‘affordability quotient’. We will also help you cooridinate your home buying team of professional service providers saving you time and money.