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What You Need to Know About Changing Your Marital Status

Learn about how changes in your marital status can affect your finances & how to prepare for them.

changing your marital status - divorce or separation - Diminish Debt Darren Robinson


Before tying the knot these ask yourself these 4 questions

Wedding bells are in the air! Many couples don’t always talk about finances and money management, but it’s an important discussion before you get married. To help you on your way, check out these key topics to get started.

Share the status of your finances.

Disclose all your investments, debts, assets and financial goals. Make sure there are no skeletons in the closet that will come back to haunt you later. It’s imperative to have a comprehensive conversation that prepares you for your financial life together and sets you on the right path together.

Where do you see yourself in the future?

After the big day, what are your timelines to purchase a new home? Do you plan to have children, travel or train for a new career? Together, establish your common goals and align them with your individual dreams and aspirations. Then set timelines and budgets to get you to where you want to be. Consider consulting with a professional such as a financial planner. Using outside resources will help you succeed and achieve your goals.

Setting up your bank accounts

Another important step is setting up your bank accounts. As a couple, you may want to merge your accounts, keep your finances separate or create a joint account for shared bills and expenditures. Will you both contribute the same amount to the shared account? Or is it based on a percentage of income? If you choose to keep your accounts separate, delegate which bills will be handled by whom.

Tax breaks and other savings

Consult with an accountant or financial advisor for the best options for you. There are many different tax breaks available through joint Registered Retirement Savings Plan (RRSP), Tax-free Savings Accounts (TFSA), charitable or political contributions, or debt consolidation for spouses with lower interest rates.

Open dialogs about money are an integral part of a marriage. Being forthright and honest about your dreams and goals will ensure you have the financial tools in place for a rainy day or if your situation changes. Enjoy your new partnership by planning a bright financial future together.

Financial planning: How to save money to have your dream wedding 

You’ve envisioned your dream wedding since meeting the love of your life. But how can start your life together without being in debt AND have the perfect wedding day?

A wedding will be the first expensive items that you purchase together as a couple. The expenses can be high unless you start planning it out and sticking to your budget. On your big day, you will need to plan for the venue, food, beverages, the wedding dress, tuxedo, and photographer, plus many more items that you will need to consider also.

Start with a Wedding Budget

Have a frank conversation about how much you are comfortable spending on your wedding day. If you need to trim the budget, investigate different times and places for your reception. For example, a wedding during the daytime is less expensive than the evening. Comparatively, a wedding on a Friday during the winter is less than a wedding in July on a Saturday.

Agree on Your Wedding Expectations

What are your must-haves for your wedding day and honeymoon? Make sure you and your partner have priorities that you agree on and that you have a list of expectations or areas that you are willing to make concessions on. Are you willing to book a trip to a less expensive destination for the honeymoon if it means 50 additional people are invited to attend? If you go with a less expensive gown, can you book the exclusive venue instead?

Financially Plan for Wedding Expenses

Think about separating your day-to-day banking with a savings account specially set up for saving for your wedding day. Set it up so that you can make deposits and not withdrawals and then check in on the account balance to keep motivated to save. PRO TIP: Use a Tax-Free Savings Account (TFSA) to save without getting taxed on the interest you earn in the account.

Create a Savings Schedule

Transferring money from your main account to the savings account is less impactful to your regular routine if you do a smaller amount on a weekly basis. Make sure to make regular contributions to the wedding fund. If you set up automatic deposits, you may find its more convenient and increases the likelihood of success.

Analyze Your Spending Habits and Trim Excessive Spending

Those little items you purchase on in a week add up. By cutting out the extra coffee or the lunch out with friends can add to your savings. Making small reductions to your spending habits can help lessen the burden of wedding expenditures. Set aside the money you saved during the week and add it to your savings account.

Saving for a wedding can be an exercise in financial responsibility and a great way to plan for your life as a newly married couple. It’s important to stay disciplined and keep focused on the goals you wish to achieve. 

The 7 deadly sins of divorce or separation to avoid

Getting divorced or separated is extremely demanding – both emotionally and financially. Take the time and consider the following items to ensure your finances stay stable throughout the tough process.

Get Expert Help

Hire the right lawyer for you and your situation. Make sure that they are objective and looking out for your best interests. A quick settlement may be the focus of some arbitrators or mediators, which may bypass a negotiation of assets you are entitled to. When researching and vetting new legal counsel, consider recommendations and word-of-mouth referrals.

Divide Your Finances Immediately – If Possible

Going through a divorce or separation drums up emotions that could negatively drive actions. Actions that could drive how your ex-partner uses the bank accounts, credit cards or other finances. Keep it simple by splitting up access to your money and investments.

Draft a Separation Agreement

Coming to terms and agreeing with the items on your agreement will help prevent future costs and legal fees that will incur if you go back to court. Consult with your legal counsel to get a comprehensive list of items to consider.

Should You Sell the House?

If you have children, after determining how and when they will be cared for, is it in your best interest to carry the expenses of running the household by yourself? If it is not feasible, investigate downsizing and decreasing your monthly expenditures so that you can put that savings aside in case you need them for unexpected costs.

Plan Your Budgets

Financial planning during a separation or divorce is a sensible practice that can help should there be any unforeseen costs of moving or dividing assets. Plan to reduce your casual spending and continue to save and invest in your future.

Update Your Insurance Policies and Your Will

Consult with your lawyer regarding your marital assets and what would be included in the settlement. If your ex-partner or spouse is the primary beneficiary in your policy, consider updating it as soon as possible, based on the legal advice you receive. Change your will, or if you don’t have one, get one drawn up during this time to make sure your money goes to the appropriate person or your children should anything happen to you.

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