Since our wedding date is in about 7 months, we’ve been talking a lot lately about marriage agreements (also known as prenuptial agreements). Did we need one? And if so, what would it look like?
I read a Global News article not too long ago that said that only 8% of couples in Canada had a prenuptial agreement, which actually really surprised me given that 4-in-10 first marriages in Canada end up in divorce!
So I asked people on Twitter if they had any sort of marriage / prenuptial /co-habitation agreement, and I got answers that ranged from “didn’t even think about it” to “wish we had, and now it’s messy.”
In British Columbia, couples who have been living together for at least 2 years share the same rights as married couples – which includes a 50/50 split of shared assets and debts. So basically you don’t have to get officially married in this province to be treated as a married couple in some aspects of the law. This can be scary for people who want to live with their partner, but either don’t want to get married yet, or just don’t want to get married at all.
When RD and I first moved in together, we talked at length about how we were going to split the household expenses, and made sure that every large joint purchase was split equally. This worked for us because we came into the relationship with similar assets, zero debt, and comparable salaries. But now that we’re getting married? We’re mostly in the “what’s mine is yours” boat, but there are some aspects of our personal finances that we both always want to keep separate. And we’ve seen too many seemingly great relationships fall apart to think we’re immune to divorce. So even though we both respect each other and (obviously) expect to spend the rest of our lives together, you can’t ignore all those scary statistics.
In researching the topic of prenups and marriage agreements, there were so many articles talking about how to approach your partner about the topic, how to resolve fights that escalate because of bringing it up, and how to convince the upset partner to get one in the end. I guess I don’t really understand why so many people think talking about a prenup is such a horrible idea. I mean, yeah it kinda sucks talking about potentially divorcing before you’re even married, but the financial topics surrounding what a marriage agreement entails are kind of must-have conversations anyway IMO – and will help you both think about your financial relationship in the future. I definitely know we had some good discussions surrounding topics we hadn’t even thought about before. Because if you put aside the emotions surrounding what marriage and a prenup both actually mean, you’ll see that personal finances play a huge role in every relationship, and is one of the leading causes of divorce.
Pros to getting a marriage or prenuptial agreement
- You are both protected in the worst case scenario. People compare marriage agreements with insurance, and that’s basically what it is. They exist for the sole purpose of being there if something goes horribly wrong. If you do end up getting divorced, you’re likely going to be in a complete emotional crisis (and you may not be thinking clearly). Having a document that lays out exactly what will happen will likely mean less stress, less fights, and less anxiety.
- Make plans when you’re happy together. If your marriage ends in divorce, it could be resolved amicably and maturely, but it could also end so, so terribly. One of the main reasons why a prenup might be a good idea is because you’re creating it when you’re happiest with each other – when you can be fair, and reasonable, and honest.
- Financial matters that need to be discussed get discussed. You get to talk about tough questions. Like, really tough questions. And discussing what a marriage agreement would look like also means you have to start thinking about finances and lifestyle – where do you really want to be in 5, 10, 20 years from now? And does that line up with your partner’s financial goals? What will you do in the future about income discrepancies, or windfalls, or inherited vacation properties, or family obligations?
- One or both of you have a substantial amount of property (or expects to acquire substantial assets). If you want to keep the family vacation home in your family’s possession, or if you plan to inherit a large sum of money or a business, it might be advantageous to have it put in writing that should your relationship end, those assets would remain in your name only.
Cons to getting a marriage or prenuptial agreement
- It’s pretty crummy timing. When you should be planning your wedding and talking about how great your new life together will be, thinking about breaking up is just about the last thing either of you want to do. It’s been a strange process listening to potential first dance songs one minute, and then talking through all the things that could happen if we were to divorce. But it’s important and we’re really putting in a lot of effort to think things through.
- It could be a deal breaker. For some people, the thought of a marriage agreement or prenup brings up thoughts of distrust, resentment, and could lead to questioning whether your partner is ready for a lifelong commitment. For me personally, I don’t see an issue with it – but perhaps that’s only because we come into the relationship with similar finances. Maybe I’d feel completely different if one of us had significant debt (or significant assets), or there was a large enough gap in our income levels.
- It can get expensive. It’s hard to predict what life will hold for you and your partner in the future, and it might be that your marriage agreement works for you when you’re newly married. But would it change if you had kids? Would it change again if one of you stopped working? Would it further change if there was an infidelity? Going to a lawyer every few years can be a costly expense that some couples don’t have the cash flow for.
- You’re young with little debt and little assets. If there aren’t any kids from a previous relationship to worry about, and neither partner has any assets to protect, a marriage agreement might not be the best fit.
So are we going to put together a marriage agreement? At this point, we’re not quite sure. But we are seriously considering it, and I would encourage anyone else living with a partner, or about to get married, to really start honest what-if discussions about the future if you haven’t done so already. You may come to realize that a prenuptial agreement isn’t the right way to go, or maybe you’ve decided that you definitely need one. Whatever happens, I think it’s naive to believe that divorce could never happen to you, and it’s also so important to keep an open dialogue going about money with your partner.
Do you currently have a marriage / prenuptial / co-habitation agreement with your partner?
Well, I’m a little late with my January budget, but better than not getting it done, right? :)
First thing to report is that Zoey had her dental surgery on the 5th and she did really well when I took her in for her 1 week check-up. After a few down days where she was clearly in pain from the surgery, she has slowly returning back to normal. And I think she’s eating with a lot less pain now, which I’m thrilled about. However, she has had some major bowel issues which I won’t go into detail about, so we got some meds from the vet that will hopefully make the situation less messy for all of us. :)
And, I’m happy that the $1,700 we thought would cost for her surgery actually only cost $1,365. Which I mean, yeah that’s still a lot of money, but over $300 less than what we thought we would pay, so I’m counting that as a win.
Other than Zoey’s surgery, January is a quiet month. No travel to pay, no big film festivals, and nothing huge to pay for … except for the wedding of course. :) I’ve decided to keep our wedding expenses separate and outside of my monthly budget spreadsheet. I’ll be tracking all of our expenses on the side, and will give a brief update at the end of every month during my budget recaps.
One thing to note from the below budget is you’ll see our climbing membership has been suspended. RD sprained his MCL over the Christmas break, and will be out for at least another 6-8 weeks while he rehabs with a physio. :( He’s pretty bummed about it and I know it’s tough for him, but I’m happy that it wasn’t anything more serious than that. We’ll be back to the climbing gym before you know it! And in the meantime, I’ve been taking full advantage of the free gym in our building to supplement my weekly exercise outside of field hockey games and practices.
Anyway, onto the budget!
January 2018 Goals:
- Bring my lunch to work. Except for team lunches if my boss comes to the downtown office where I work out of.
- Sell my Leica camera and my Coach purse. Or at least post them online. They’re doing nothing for me collecting dust in my closet.
- Move for at least 60 min. every day. Even it’s just a walk on the treadmill, I want to be moving every day in January.
I had these goals all written out and ready to publish over the holidays, but then with the excitement of getting engaged (and realizing that shifted a lot of our goals for the year), I decided to spend a couple of weeks thinking about how that would affect my own personal goals.
The feeling of getting married has been an interesting one for me. I love the idea of being with RD forever – I think we’re a great match and it’s pretty incredible that we were able to find each other (and all that mushy love stuff). But as this is a financial blog, the idea of financially binding myself to someone is scary. It’s scary!!! Not because I think he’s bad with money (he’s better with his money than me), but because my financial goals aren’t entirely mine anymore. They’re ours. So sure, I’m saving for my retirement, but I’m really saving for our retirement. And my desire to put down X amount on the mortgage might differ from how much he wants to put down, or maybe I want to pay the car insurance monthly but he prefers it annually. I know every couple goes through this, I’ve just been doing it my own way for so long that the loss of independence and control is a weird feeling. Not a bad feeling, just a different way of thinking about things. :)
In 2018 I’m going to work on the personal things that I’m not very good at – like taking care of my body and finishing what I start. I want to focus on my career, and I also want to make sure that I take the time to enjoy everything that comes along with getting married and having a wedding.
- Stay debt-free. This is obviously an important goal. :)
- Save at least $1,650/month into my RRSP/TFSA. Aside from staying debt-free, saving for retirement is my most important financial goal. I hope to be able to retire when I’m 50-52, and at the pace I’m going, I should hit that goal. If I get any sort of raise during 2018, I will increase my retirement contributions accordingly.
- Stay on budget with our wedding. A wedding is definitely a huge expense, but we have a fairly practical budget given that we’re having two receptions. That being said, I’d still like to stay within the budget we’ve set for ourselves. We’ve only been planning for a few weeks, and I can already see how easy it can be to get carried away thinking you have to have something, when you really just don’t.
- Make an extra lump sum mortgage payment. We are currently on an accelerated bi-weekly schedule, and put down an additional 12% for each payment. We’d like to put some money down as a lump sum payment towards the mortgage, we just don’t know how much that would be yet.
- Complete one home renovation project (on budget). We agreed that we’d do one home renovation each year, and I believe we’ve settled on putting down flooring on our balcony. This is something we can do ourselves, and aside from painting or putting together IKEA furniture, this will be the first home renovation I’ve ever been apart of. Well, if you can call balcony flooring an actual renovation, haha!
- Take care of my body. I’ll be the first to admit that I’m not the best at taking care of my body. I want to be better at the small things like: moisturizing more often, washing my face before bed, fixing my nail polish when it chips, or not trying to stretch my dry shampoo for the third day, etc. These might be normal habits for most people, but I tend to get lazy and stuff like this slides. And I find when I actually pay attention to the details, I feel so much better. But, I also want to maintain the big things – like eating right, exercising often, and managing my injuries properly. For example, for the first time in my life I’ve decided to go to a physio to help me with my hip issues (which I’ve had since October). I can see a lot of improvement, and I think I might come out of this without any permanent damage – which is more than I can say about my feet and ankles after years of abuse playing high-level sports.
- Continue bringing my own lunch to work. I’ve become pretty good at making sure we have lunches to take to work, and I want to continue this into 2018. I won’t be perfect all the time, but if I can limit buying lunches or coffees to just a couple times a month, that’s going to do wonders for my budget.
- Make the most of smaller trips. Because we have a wedding to pay for (and don’t want to reduce our additional mortgage payments or retirement contributions), we are postponing our honeymoon until next year (which also means no big vacation trip this year), so we’ll have to make sure our smaller getaways are super meaningful. We already have three trips booked – Tofino in March, Bowen Island in April, Seattle in August, and potentially (fingers crossed) a week in Haida Gwaii in early June.
- Finish what I start. I realize that sometimes I get super stoked on a project and go super hard on it, only to lose interest and move onto something else before it’s finished. Actually, RD was the one who made me aware of this. And as a result of this quirk of mine, I have a lot of half finished crafting projects sitting in my closet (like when I taught myself how to knit but didn’t even finish the scarf I started, or when I had grand ideas of making our own Christmas stockings and did so much stitching that my hand cramped up and I quit). So, my goal for the year is to finish things that I start. Or at least pace myself so that I don’t burn out. And maybe go back to some of my half finished projects and work on them a little. :)
- Start studying for the APMP Certification (Foundation). I’ve been in this industry for almost 4 years now, and I’m almost positive that something in this line of work is what I’ll be doing for the rest of my career. That being said, I’ve always wanted to further my education with a certification program – I just haven’t found something that really suited my career path – until now! Last year I heard about the Association of Proposal Management Professionals, and while certification through them isn’t a requirement for my job, I think it’ll be beneficial because I’d like to learn something new, and it’s just nice to add a designation after my name to set me apart for future career opportunities.
- Increased responsibility/exposure at work. I’m not really sure what this looks like yet, but I’d like to do more. Last year, I volunteered to take on some additional tasks which I found fun and fulfilling. Plus, my boss took an extended leave so I got to see more and interact with different people. Whether this goal results in increased responsibility or just increased exposure to other people within the company, I’m not sure. But learning more and growing is important to me – and even though there’s still lots more I can learn in my current role, I would definitely be interested expanding my knowledge.
- Blog more often. Honestly, I have so many half finished blog posts just waiting for some final touches. But over the last couple of years, I haven’t been posting as much. It all started when I was dating someone who wasn’t super supportive of my blog or freelancing, and that was difficult to manage. Because when it comes down to it, real life is more important than my blog life. So I made the choice. But that’s in the past, and RD couldn’t be more supportive of what I’m doing. I’m confident and interested in sharing my financial choices and lifestyle (and learning from everyone else too!), it’s just that for some reason getting back into the rhythm of putting those thoughts down on the blog has been difficult. I need to figure out why I have that block, and how to get past it. Maybe it’s just a matter of posting more often and getting used to it again.
2018 is going to be a super busy but fun year, and I’m really excited about it. What are your goals looking like for this year?