Financial Advice for Your Stage in Life
So you’ve decided to hold off taking the plunge, yet agree to share a plunger. Here are some things to consider:
- Know the rules of common law. Each province is different, so you want to know what rules apply to you.
- Put it in writing – have a detailed list of what is yours, his, and what you agreed to share. Don’t count on the fact that you’ll remember.
- Consider a cohabitation agreement
Setting your married life off on the right financial foot is an important step in building a strong financial foundation for your family well into the future:
- First things first – Do you need a prenuptial agreement? Maybe. Prenups have long had the reputation of being used to protect assets, and they do, however in this day and age, you may actually need one to protect you against debt. Once you’re married, his debt becomes “our” debt. It’s absolutely critical that you know what you’re getting yourself into. Most people don’t realize that debt is a shared liability, and it’s not 50/50, it’s 100/100. So proceed with caution and if this is an area of concern, don’t be shy, protect yourself accordingly.
- If you have a business, consider a family trust to protect future growth and have the ability to split income & capital gains with your growing family.
- Inheritance – Keep it separate and be cautious about combining with marital assets such as the family home
Lastly, here are 5 ways to be a better financial role model for you kids:
- Regardless of confidence in your own money skills, simply living within one’s own means is the best role model of all.
- Some of the best money lessons your kids will learn are learned the hard way and will likely have the most lasting impact. Resist the urge to save them when they do make those mistakes, it’s very often the natural consequences of making those mistakes that teach them the best lessons of all.
- Talk about salaries, income and expenses (yours) and jobs they would like to have in the future and the realistic salaries associated with them.
- For older kids, get them engaged in the stock market – understanding how the stock market affects their everyday lives via products they love (Apple, Disney); have them watch and monitor the stocks’ performance; buy them a few shares for their birthday – they’ll be hooked!
- Teach them to think beyond their borders – i.e. as a family, consider getting involved in offering micro-finance loans to individuals in poverty-stricken countries.