Canadian households increasingly relying on debt to stay afloat – study
by Ephraim Vecina 31 May 2018 MBN
A fresh study conducted by Ipsos for personal insolvency practice MNP LTD revealed the extent of Canadian households’ reliance on debt, with 58% of those with consumer debt stating that they would need an increase of at least 37% in their household incomes to live debt-free.
The problem is exacerbated among lower-income and insolvent households, which stated that they would need to make 49% more income.
Albertans in debt stated that they are more likely (69%) to need significant increases (21% or higher) in their household incomes in order to live without any consumer debt. Other provinces whose residents are raring for higher household incomes amid the debt-heavy climate are Atlantic Canada (62%), Saskatchewan and Manitoba (59%), Ontario (55%), Quebec (51%), and British Columbia (50%).
Read more: Higher rates putting greater pressure on indebted Canadians
“It used to be that people would save for big purchases and have some money tucked away for emergencies. Now Canadians look straight to HELOCs or credit cards or other forms of debt when it comes to paying for unexpected car repairs, home maintenance, and even basic household expenses,” MNP LTD president Grant Bazian said.
“When debt becomes a financial survival tool it makes people particularly vulnerable to exploitative and high-cost lending. They have to spend more to service their debts – particularly as interest rates rise – so they have less money to make ends meet. And so begins the vicious cycle of debt,” Bazian added.
Related stories: CMHC Q1 report reveals arrears rate
Looking for your best mortgage rate?
Here’s 20 questions to ask:
ROBERT MCLISTER - SPECIAL TO THE GLOBE AND MAIL
"What's your best mortgage rate?" was once a fairly straightforward question. These days, it's impossible to respond intelligently to it without asking a litany of other questions.
That's true today more than ever thanks to recent federal rule changes. Ottawa's changes to regulations have jacked up lenders' costs – and the lowest mortgage rates – on refinancings, amortizations over 25 years, million-dollar properties, single-unit rental properties and mortgages where the loan-to-value ratio is between 65.1 and 80 per cent.
So be prepared to play a game of 20 questions to find your best rate in today's market. Note that thanks to new mortgage rules, which make it more expensive to lend to people who the government deems higher risk, the last six questions on this list have taken on a whole new importance.
Here are those questions:
- 1) What's the term?
Mortgage contract length (“term”) and rate type (fixed or variable) are usually the biggest factors impacting your rate.As of this writing, the cheapest five-year fixed rate, for example, costs 50 basis points (bps) more than the cheapest five-year variable rate. (Note: 100 basis points equals one percentage point, so 47 bps equals 0.47 percentage points.)
- 2) Is the mortgage for your primary residence, a second home or a rental that you won't live in?
If you rent out the property and don’t live there, you’ll pay up to 25 bps more than if it were your primary residence.The cheapest rates are seldom available on second homes or unusual properties.
- 3) Can you adequately prove your income?
If you can’t, forget about the lowest rates. In most cases you’ll pay at least 150 bps more. - 4) Where is the property located?
The province matters. The lowest one-year fixed rate in New Brunswick, Newfoundland, Prince Edward Island, Northwest Territories, Nunavut and Yukon is over 30 bps more than in Alberta, British Columbia and Ontario.The city matters, too. You’ll cough up at least 10 bps more than the lowest market rate (on the term you want) if your property is rural. The reason: if the borrower doesn’t pay, it’s harder for the lender to sell a rural property.
- 5) When is the closing date?
The longer you want your rate guaranteed, the more you’ll pay. A 90– or 120-day rate hold typically costs at least 10 bps more than a 30-day rate hold - 6) Can you live with prepayment restrictions?
Some lenders now charge 10 bps above their lowest rates if you want to prepay an extra 5 to 10 per cent on your mortgage.One of the country’s lowest rates currently allows no prepayments at all.
- 7) Can you live with portability headaches?
If you move to a new home, certain deep discount lenders will force you to close your old property and new property on the same day (good luck with that). Otherwise you’ll pay a penalty.Remember that if you’re using the equity in a property you’re selling for the down payment on your new property, and that new property closes beforeyour old one, you’ll usually need extra cash or a bridge loan. Not all lenders offer bridge loans.
You’ll often pay 5 to 15 bps more, compared to the lowest market rate, to have a full 90 days of porting flexibility and access to bridge loans.
- 8) Can you live with refinance restrictions?
If you want the freedom to refinance early with any lender, some lenders will charge you 10 bps more than their lowest rates for that privilege.If you want to cash out more than $200,000 in equity, you’ll often pay at least 15 bps more than the cheapest market rates.
- 9) Can you live with a large penalty?
More than three-quarters of the fixed mortgages sold in this country do not have, what I’d term, “fair” penalties. In other words, if you break the mortgage contract early, you’ll often pay through the nose (more on that).Some lenders offer both high– and low-penalty options, with the low-penalty mortgages costing 10 bps more. But even with that rate premium, you’d likely still pay less than if you broke a fixed mortgage with a high-penalty lender, like a major bank.
- 10) What type of property is it?
A few lenders charge 5 to 10 bps more for high-rise condos, depending on your equity and other factors. - 11) Do you want good rates when you renew and/or if you refinance early?
Some lenders try to stick their renewing or refinancing customers with horrid “special offer” rates (they’re not so special, trust me).If you want a lender that’s highly competitive after you close, you’ll often pay at least 10 bps more than the cheapest market rate.
- 12) Do you have any credit flaws like bankruptcy, consumer proposal or unpaid debts?
If so, some lenders won’t even touch you. The ones who will, will charge 50 to over 200 bps more than the lowest rate in the market. - 13) Do you have a property address already or is it a pre-approval?
You’ll almost never get the best rate on a pre-approval (more on that). Expect to pay at least 10 to 20 bps more than rock bottom rates if you haven’t purchased your property yet. - 14) How big is the mortgage, as a percentage of your home value?
If you’re a well-qualified borrower, “loan-to-value” (LTV) is the second-most-important factor in determining the rate you’ll pay.If your LTV, for example, is 80 per cent instead of 65 per cent, you’ll often pay at least 15 bps more than the best market rates.
Oddly enough, someone with an 80 per cent LTV will pay up to 20 bps more than if they had a 95 per cent LTV. Why? Because mortgages with less than 20 per cent equity cost lenders less, since borrowers must pay for their own default insurance.
- 15) Can you pass the government's "stress test"?
If you’re getting an insured mortgage (which is usually required if you have less than 20 per cent equity), you must prove you can afford a payment at the Bank of Canada’s five-year “benchmark” rate. That rate is roughly two percentage points higher than your actual “contract rate.”If you can’t do that, but you have at least 20 per cent equity, some lenders will let you qualify on your “contract rate” instead, which is much easier, but you’ll pay at least 15 bps more.
- 16) What is your credit score?
If your credit score is less than 680, it could cost you a minimum of 10 bpsmore. A few lenders won’t deal with you at all, and others will limit their rate specials to borrowers with scores of 700 or 720.By regulation, a sub-680 credit score will also limit the amount of debt you can carry if you want a competitive rate.
- 17) Are you purchasing, refinancing or merely switching lenders?
A refinance today costs 15 to 50 bps more than the lowest market rate on a purchase. - 18) What is/was the property's purchase price?
Many lenders now charge 15 bps more if your property value is more than $1-million. - 19) Is your mortgage already insured?
If it is, and you’re simply switching lenders with no changes to the mortgage, you’ll save at least 10 bps compared to average discounted rates. - 20) How long of an amortization do you require?
Many lenders, including big banks, are now charging 10 bps extra for amortizations over 25 years.
The above list of questions is by no means exhaustive. And there are always exceptions. One is if you're asking for a renewal rate from the lender who presently holds your mortgage. If you send them a copy of various competitor's rates, you won't need to answer all these questions to get their lowest rate.
Ottawa's new mortgage rules have made factors such as healthy credit scores, purchase price and amortization lengths more important. The changed regulations have led some lenders to advertise as many as 10 different rates for a five-year fixed mortgage alone.
Today's landscape requires lenders and mortgage brokers to factor in more criteria than ever before when setting rates. So if you see a red– hot bargain advertised on a lender or broker's website, it's bound to have caveats. Get ready to ask–and answer–plenty of questions.
Robert McLister is a mortgage planner at intelliMortgage and founder ofRateSpy.com.
Ottawa turning into GTA's playground?
by Neil Sharma 25 May 2018 MBN
Ottawa’s housing market has caught fire, and the reason: An influx of buyers from outside of the region.
“Some of it is the ripple effect of higher priced markets like Toronto or B.C.,” said Dorothy Smith, a broker with Mortgage Brokers Ottawa. “We’re finding more people who can work remotely are purchasing here. They can work in Ottawa and still maintain a job in Toronto or other centres. Some of our buyers are migrating from those higher-priced areas to Ottawa to capitalize on the lower prices we have had, which are now increasing a little bit.”
To say that prices are increasing a little bit might be an understatement. The Canadian capital is replete with multiple offer situations, which Smith says have become inescapable in the last two to three months.
“Last year, we had a few situations where specific areas had higher selling prices, but now there are more and more multiple offer situations all over the immediate Ottawa area where prices are going up quite quickly,” said Smith. “For the most part, it’s people who have been used to the Toronto pricing or the B.C. pricing and are willing to buy at a higher price than what the lists are.”
The bidding wars are manifesting in the same way they did in Toronto’s single-family detached market before the Fair Housing Plan put a stop to them virtually overnight. Sandra Tisiot, a mortgage agent with DLC Smart Debt, has a slew of preapproved clients who are unable to find homes.
“A lot of bidding wars are happening,” she said. “I’m sitting on a pile of preapprovals but they’re losing out on the homes every time they go and put an offer in.”
While both Smith and Tisiot say there’s an influx of buyers from outside the Ottawa region, the latter says they’re even coming from abroad.
“We do have foreign buyers—anyone outside of the Ottawa footprint, whether that’s coming from Toronto or overseas. We have an influx of buyers from overseas coming in with cash offers,” Tisiot said before adding that financing conditions have gone the way of the dodo.
“They may have the inspection clause in there, but at this point buyers are just going in with no clauses at all, especially the foreign ones because they have cash. It doesn’t matter if it appraises or not, they’re going to pay it.”
Related stories: Ontario cities with the least and most pricey homes, Investing in Ontario real estate? These cities are the best bets
Ontario cities, the least and most pricey homes
by Ephraim Vecina May 2018 MBN
Despite the Ontario government’s implementation of the Fair Housing Plan around a year ago, affordability remains a core concern among current and would-be home owners. A new study by Toronto-based real estate information website and brokerage Zoocasa looked at fresh data to determine the most and least affordable cities in the province.
Zoocasa analyzed median household incomes from Statistics Canada as well as average April 2018 home prices provided by the Canadian Real Estate Association (CREA), and determined that Thunder Bay is currently the most affordable Ontario city for home seekers, with a Single-Income Ratio of 6 and a Dual-Income Ratio of 2, along with an average home price of $217,745.
Other pockets of affordability in the province are:
- Rank 2: Sudbury
Single-Income Ratio: 9
Dual-Income Ratio: 3
Average Home Price: $268,696 - Rank 3: Windsor
Single-Income Ratio: 9
Dual-Income Ratio: 4
Average Home Price: $303,183 - Rank 4: Ottawa-Gatineau
Single-Income Ratio: 9
Dual-Income Ratio: 4
Average Home Price: $418,232 - Rank 5: Kingston
Single-Income Ratio: 10
Dual-Income Ratio: 4
Average Home Price: $366,582
Read more: Luxury home prices ‘relatively resilient’ despite lower sales in GTA and Greater Vancouver
As for the cities that ranked lowest in terms of affordability:
- Rank 1 (Least Affordable): Greater Toronto
Single-Income Ratio: 20
Dual-Income Ratio: 9
Average Home Price: $804,584 - Rank 2: Hamilton
Single-Income Ratio: 16
Dual-Income Ratio: 6
Average Home Price: $569,490 - Rank 3: Oakville
Single-Income Ratio: 15
Dual-Income Ratio: 5
Average Home Price: $719,000 - Rank 4: Durham
Single-Income Ratio: 14
Dual-Income Ratio: 6
Average Home Price: $604,51 - Rank 5: Peterborough
Single-Income Ratio: 14
Dual-Income Ratio: 6
Average Home Price: $448,875
The surprise presence of Peterborough, which is situated quite a ways from Toronto, “suggests that there could be growing demand from buyers priced out of the GTA that are willing to commute from much further afield - and incomes in these cities have not caught up to the average home price,” Zoocasa stated.
Related stories: Retirees stoking demand in recreational market – survey
Retirees stoking recreational market – survey
by Ephraim Vecina May 2018
A fresh study has found that retirees were the main driving factors of activity in 91% of Canada’s recreational property markets.
According to the latest RE/MAX nationwide survey, a growing number of retired and would-be retiring consumers in British Columbia, Ontario, and Atlantic Canada are purchasing recreational properties outside of urban centres for use as retirement homes, a trend that is blurring the line between recreational and residential properties.
“Last year, we found that Baby Boomers and retirees were increasingly selling their homes in urban centres like Toronto and Vancouver,” RE/MAX of Western Canada regional executive vice president Elton Ash said. “It's clear that many put the equity they received from those sales into the purchase of a recreational property with the intention to retire in comfort and away from the city.”
24% of those surveyed indicated that they would consider buying a recreational property in the future. 54% of Canadians will source their recreational property purchase payments from their savings, while 20% will get funds from their home equity or loans.
Distance is no object to 68% of current or would-be recreational property owners, as this segment is willing to travel up to two hours to their purchases. 31% said that they would travel for two hours, while 28% are willing to travel three or more hours.
In a separate survey conducted by Leger, 58% of Canadians said that they enjoy recreational properties as places where they can relax and spend time with friends and family, although 84% do not actually own properties in this category.
“Many Canadians want to live out the ‘Canadian Dream’ and spend time at the cottage or cabin but today, that doesn’t necessarily mean owning a recreational property outright,” RE/MAX INTEGRA Ontario-Atlantic Canada Region executive vice president and regional director Christopher Alexander said. “Many are choosing to rent recreational properties, often by pooling resources with friends and family, which speaks to recreational properties still being in high demand.”
Reverse mortgages turning millennials into homeowners
by Neil Sharma May 2018 MBN
As an increasing number of parents help their children attain homeownership, reverse mortgages are being touted as a way to do just that but with fewer encumbrances.
“It makes sense because these people are in their mid- and late-30s and have older parents,” said Anne Brill, owner of Centum Metrocapp Wealth Solutions. “We have a few seminars coming out where we’re inviting first-time homebuyers with their parents and explaining to them that because of the B-20 rules, the interest rate increases and the benchmark being higher, their kids today won’t qualify for as much money as they did yesterday. Plus, insurance premiums are higher.”
While most parents plan on bequeathing their homes to children, reverse mortgages could help the latter contend with the immediate problem of rapidly rising housing prices.
“Why don’t we help them out faster so that they can get into a home today rather than 10, or however many, years down the road?” asks Brill. “They can potentially take out $100,000 on a reverse mortgage and this way it doesn’t cost them any cash. The cash flow stays in line and the reverse mortgage doesn’t cost payments, and while the kids get a smaller inheritance, at the end of the day they get some money up front to get into a home today.”
Brill and her Centum team are educating first-time homebuyers about saving money and ensuring their credit ratings are good, but, in partnership with investment advisors, they’re also teaching parents the many things reverse mortgages can do for them.
“A lot of times parents want to cash in investments, which affects the investment advisor as well, but we show them how, with reverse mortgages, they can keep their liquid assets, like mutual funds or investments, in place. The biggest concern is usually cash flow, where they’re living paycheque to paycheque on a pension income. This will keep their investments intact and they can use their homes for other things.”
Reverse mortgages don’t just sustain investments, they can also be used to acquire new ones.
“The younger you are, the less loan-to-value they would do, but a lot of times there are some situations where they pull out enough money to buy a small home,” said Brill. “You can get about $2,000 a month in rental income while you’d pay around $350 a month in property taxes, and maybe $150 in maintenance, and now they can net out $1,500 in extra cash flow to substantiate their lifestyle.”
Impact of higher rates transcends demographic lines – poll
by Ephraim Vecina 15 May 2018 MBN
Around 30% of millennial respondents in the latest survey by Nanos Research reported that higher rates are having a negative impact on their personal spending, with another 23% saying the effect is somewhat negative.
More than half of Canadians under 35 years old said that they are spending less because of recent interest rate increases. Of those between 35 and 54 years old, 41% reported higher rates are having a negative effect. Those over the age of 55 reported the least negative effects, with about one third saying higher rates harmed personal spending.
Nanos conducted the polling on behalf of Bloomberg between April 28 and May 4.
The survey results suggested that higher borrowing costs are already beginning to curb demand in the economy. It also underscored how the impacts will reverberate well beyond real estate as households offset rising interest payments by cutting back on other things.
A slowdown in consumer spending is the primary reason why most economists – including those at the Bank of Canada – are anticipating the economy is poised to drop off in coming years.
“Research suggests that age is a significant determinant of the possible impact of rate hikes on the personal spending of Canadians,” Nanos Research chairman Nik Nanos told Bloomberg. “The spending of younger Canadians, under 35 years of age, will likely be squeezed the most.”
The situation is particularly acute for younger Canadians borrowing to buy into a housing market that has seen prices double in cities such as Vancouver and Toronto over the past decade.
Because households have amassed record levels of debt during the recent period of extremely low borrowing costs, the Bank of Canada has predicted that the economy is as much as 50% more sensitive than before to rate hikes. Canada’s central bank has raised borrowing costs three times since July, and investors are anticipating two more increases later this year.
Related stories: Canada’s mortgage growth falls to lowest levels since 2001
How to deal with mortgage payment difficulties
Sometimes unforeseen financial circumstances can impact your ability to make your regular mortgage payments. Or perhaps your debt demons have been caused by taking on too much other high-interest debt.
It can be tempting to want to conceal your debt problem for as long as possible – but that’s almost never the best strategy. With early intervention, there are weapons available that can help you fight these demons!
Your mortgage lender doesn’t want to see you default on your mortgage; they’d much rather help homeowners find a way to keep their home.
For mortgages insured by the Canada Mortgage and Housing Corporation (CMHC), they have identified several tools available to help you ride out a period of financial uncertainty:
1. Converting a variable-interest rate mortgage to a fixed-rate mortgage to protect you in the event of a sudden jump in interest rates.
2. Your lender may be willing to offer a temporary payment deferral, or other flexible options for short-term relief. If you’ve made any lump-sum payments against your mortgage in the past – or if you’ve been on an accelerated payment schedule – that history can help.
3. You may be able to extend your amortization period to reduce your monthly payments. You can shorten the amortization again later if your circumstances change.
4. If you’ve actually missed a few payments already, you may ask if the lender is willing to add them to the mortgage balance and extend the payment period accordingly. (Best, however, to start talking before you start missing payments!)
5. A special payment arrangement unique to your situation may also be possible.
Genworth Canada also has a Homeowner Assistance Program designed to help homeowners who are experiencing temporary financial difficulties that may put their mortgage at risk.
Ultimately though, it’s best to seek help at the first sign of financial trouble. Getting in touch and having a conversation is a great place to begin – because as an independent mortgage professional, I work for my clients and look out for their best interests, not the lenders, and I know what the lenders are after.
It’s possible that your financial situation just requires some extra penny-pinching to stay on budget. But if you find yourself adding to your credit card debt – or borrowing to make mortgage payments – then it’s time have that conversation. The earlier you get help, the easier it will be to conquer those debt demons!
B-20 causing housing immobility
by Neil Sharma 09 May 2018
According to one brokerage owner, the bureaucrats who determine mortgage lending rules are leading us down a path of reckoning.
“I think if they continue on with the restrictive policies they’ve been putting in place, they’ll get what they want: A housing collapse in Toronto and Vancouver. Then what are they going to do?” said Croft Axsen, owner of DLC Jencor Mortgage Corporation.
“I’m not saying they shouldn’t be trying to address housing prices in Toronto and Vancouver, but I think most of that has to do with supply. There’s this overall restriction throughout the entire economy about who can get a mortgage, how many people can get a mortgage, and how big the mortgage they can get is. I don’t think they understand what they’re doing. It makes me nervous that bureaucrats are making these decisions and not bankers.”
The B-20 guidelines have locked borrowers into their mortgages and impeded housing mobility. But most incredulous to Axsen is that existing mortgage holders have been displaced onto shaky ground. Irrespective of high Beacon Scores, they’re being punished.
Citing a client who paid down an $800,000 mortgage and still cannot move lest they substantially downsize, Axsen said, “The government has set up rules in which you can’t even qualify for the mortgage you have. Not only can’t you move, you can’t go to a different lender because they have to qualify you, so you’re stuck with your existing lender. You can’t compete to get yourself a lower interest rate on your house and you can’t sell your house for a different one because the government has deemed you’re not worthy, even though you have perfect credit and you’ve never missed a payment. Somehow, some bureaucrat sitting in front of a computer running a statistics program is telling the bankers how to qualify you to get a mortgage.”
Axsen added that he expects a stagnant economy to result from a considerably cooler housing market, in large part because—in a bid to rectify abnormalities in Toronto and Vancouver—smaller cities are suffering.
Shane Bruce of VERICO ACME Mortgage Professionals says people with modest incomes are bearing the brunt of the rule changes, while it’s business as usual for the well-heeled.
“I’m surprised homeowners aren’t complaining because the large portion of Canadians’ net worth is in their real estate equity, and we’re saying we’re all underfunded, too much debt and not enough pension, why would the government prevent their properties from appreciation?”
Related stories: Government lying about reason for rule change implementation, claims industry veteran
7 Money Mistakes That Can Mess Up Your Marriage
Maryalene LaPonsie, Money Talks News, Yahoo Finance
When it comes to whether you and your betrothed will remain together until death do you part, it’s largely about the Benjamins.
According to a study from Kansas State University, arguments about money are the leading predictor of whether a marriage will end in divorce.
Of course, there are no guarantees, but this suggests you may be able to increase your chances of marital bliss by avoiding common money mistakes.
Following are seven common money mistakes that couples make.
Thinking your spouse’s debt is not your problem
Today, men and women marry later in life than they did in earlier generations. That means both people in the new union have had plenty of opportunities to rack up a little debt, whether it’s from student loans, credit cards or a shiny new car.
Legally, you are not responsible for paying off the debt that your spouse accrued before your marriage. However, you are not being particularly smart — let alone nice — if you decide there is no way your income will be used to pay off Mr. or Ms. Right’s debt.
Ideally, you will have discussed this matter before your wedding day and done your best to clean up bad debt in advance. But if you find yourself married to someone with a boatload of debt, it’s in your best interest to help pay it down as quickly as possible.
Failing to join finances
Even if you want to maintain separate accounts for spending money, you should have a joint account for combined expenses. After all, you are one household now. You’re both enjoying the roof over your heads and the heated air in the winter.
Having a single budget ensures there is no resentment about who has more money or who gets stuck with a specific bill. Dump all your money into a joint account, write out a budget that pays all the shared bills, and divvy up the extra for spending money.
Not having spending rules in place
Another benefit of having a unified household budget is that it gives you an opportunity to discuss ground rules for how to manage money together as a couple.
Ground rules will vary from couple to couple, but you and your spouse should be on the same page when it comes to answering these questions:
How much discretionary money can one spouse spend without conferring with the other spouse?
What discussion needs to take place before one spouse opens a credit card account or takes out a loan?
If there are kids in the family, do they get an allowance? If so, how is that doled out?
How will money discussions take place? Will they be scheduled at regular times, or just on an as-needed basis?
What happens with bonuses or unexpected windfalls?
Having ground rules in place will help you avoid stressful situations. Go ahead and write them down so there is no confusion about what was said and agreed upon.
Keeping secrets and hiding money
In a 2016 survey from the National Endowment for Financial Education, 42 percent of Americans admitted to financial infidelity. That could mean they’re opening accounts without their partner’s knowledge, hiding purchases or squirreling away money on the side.
If you want your marriage to have staying power, stop the secrets. The survey found 75 percent of those touched by financial deception say the lying has affected their relationship.
What’s more, hiding money can signal a deeper problem. If you don’t feel as though you can be upfront with your spouse about finances, you need to do some soul-searching and address that problem.
Leaving bills in the hands of one person
It’s harder to have money secrets if you work together to pay the bills.
On a practical level, it may make sense to have one person writing the checks and managing the online bill-paying schedule. But that doesn’t mean the other spouse should be left out in the cold.
Couples may find a monthly meeting is a good time to review account balances and look ahead for irregular expenses. This can also be a time to tweak savings goals and re-evaluate spending habits.
If your spouse bristles at the thought of being involved in the budgeting process, at least print up account information and hand it to him or her, along with a monthly snapshot of your current budget and spending.
Neglecting to plan for the long term
It is important to discuss long-range needs such as college, retirement and long-term care.
Failing to do so might not end your marriage, but it could seriously alter it. There may be no retirement home in Florida or no RV in which to travel the country. Without proper preparation, you may find your golden years together are significantly different from what you envisioned on your wedding day.
Letting emotions overtake money decisions
Money can be a highly emotional topic, and the worst mistake you can make is to turn your family finances into a weapon to be used against your spouse.
Yes, he may have blown the last of the spending money on a video game. But running out to retaliate with your own shopping spree not only damages your relationship, it’s also a dumb financial move.
Another no-no is shaming your spouse over money spent, or a lack of income earned. These sorts of behaviors cause resentment and breed mistrust, both of which can be the downfall of your marriage.
Treat your spouse with dignity and respect. You can’t control your spouse, but responding with grace and compassion may provide the grease needed to open a constructive dialogue.