BMO Financial Group

BMO Financial Group
BMO Bank of Montreal

BMO Bank of Montreal

April 16, 2012 13:30 ET

BMO Offers Financial Tips for a Happy Marriage

As William and Kate prepare to celebrate their one year wedding anniversary, BMO offers financial advice to couples for their "Big Day" and beyond

TORONTO, ONTARIO--(Marketwire - April 16, 2012) -

Editors Note: There are two photos associated with this press release.

BMO Financial Group today released financial tips for newlyweds-to-be on how to make the transition from "my money" to "our money."

Weddings are an emotional event for everyone involved and, throughout the planning process, a lot of major decisions need to be made - many of them related to budgets and finances. However, once the wedding is over and the honeymoon concluded, there remain a number of money-related issues that new couples must deal with to ensure a "prosperous" relationship.

The following are BMO's financial tips for a happy marriage:

Not in the peerage? Your honeymoon doesn't have to be in steerage:

  • Once you have determined a wedding date, calculate how much you will need to save per month and establish a contingency fund.
  • Spend smart - Credit cards offer both reward programs and, in some cases, purchase protection. Putting all your wedding and honeymoon expenses on a credit card can maximize reward value, while protection features for purchases and travel can provide peace of mind for newlyweds.

Guest list doesn't include kings and queens? Plan a budget to live within your means:

  • Establish how household expenses will be paid and how money will be managed. Take advantage of free online tools, such as BMO MoneyLogic, to help stay on top of everyday household spending and saving.
  • Make sure you are honest with each other regarding your respective debt levels and investments. It is the only way you will be able to plan effectively.
  • Make it a priority to pay down your higher interest debt first. Whenever possible, pay off your entire credit card balance every month. You could also consider consolidating your higher interest debt in a lower interest account, such as a personal line of credit.
  • Once you have agreed upon a common retirement lifestyle, start contributing to your Registered Retirement Savings Plan (RRSP).
  • Discuss ways to balance risk in your investment portfolios by including a variety of products such as mutual funds, exchange traded funds (ETFs), guaranteed investment certificates (GICs) and bonds.

No crown? Tax tips to make sure you don't wear a frown:

  • Do some advance research into how your new marital status will impact your tax status. For example, you are required to each file your own tax return. However you do have to indicate you are married. The government will look at your combined income to determine your eligibility for certain credits (e.g. GST/HST credit).
  • Learn about potential tax credits. For example, if one of you is in school, the student can transfer the tuition and education amount to the working spouse to lower the tax burden. Married couples are also able to combine medical expenses and charitable donations in their tax return.
  • A working spouse can contribute to his/her non-working or lower income earning partner's RRSP (Spousal RRSP) to split income and reduce taxes in retirement.
  • Also keep in mind that you will need to update your will to reflect your new marital status.

Grandmother not buying you a castle? Arrange a mortgage with no hassle:

  • Stress-test your budget using a mortgage payment based on a higher rate to make sure you can afford what you signed up for. Keep in mind that total housing costs (mortgage payments, property taxes, heating costs, etc.) should not consume more than one-third of household income.
  • Consider taking a shorter amortization, which will mean less interest payments over the life of the mortgage and will help you and your spouse become mortgage free faster.
  • Think carefully about fixed versus variable. While variable rate mortgages have been a winning strategy over the long term, fixed rate mortgages (currently at historic lows) provide the peace of mind of insulating you against rate increases.

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