TD Canada Trust asks dating expert Christine Hart for advice on how to
discuss a less-than-perfect financial past
TORONTO, July 15, 2013 /CNW/ - It's not unusual to bring baggage into a
new relationship and financial baggage like a persistent credit card
debt or lingering student loan is no exception. Interestingly, research
from TD Canada Trust, shows one-in-five Canadian couples (22%) admit
they are not always one hundred per cent honest with their partner
about their spending and saving habits. No need to check into couple's
therapy yet - TD and dating guru Christine Hart have some advice to
help start the conversation.
"Financial baggage is not uncommon; we all have independent financial
lives before we enter into a relationship and that can include old
student loans, a tarnished credit rating or on the flip-side a healthy
RSP or savings account," said John Tracy, a senior vice president at TD
Canada Trust. "Opening up about finances can be hard, especially at the
start of a new relationship, but it is vital couples have honest
conversations in order to build a solid financial future together."
Dating expert Christine Hart agrees that couples need to be honest about any baggage - financial or
otherwise - they bring into a relationship. Open communication is
crucial in determining compatibility with a potential partner.
"Going through a recent credit card statement over cocktails is
certainly not the most romantic way to approach a first date, but
avoiding tough money topics altogether can be dangerous," said Hart.
"As the relationship grows, so too should the conversations about
future goals and finances."
TD Canada Trust and Hart provide advice to couples on how and when to
have the difficult conversation about money:
1. When to have "the talk"
Money generally comes up in conversation around the third date,
according to Hart. This could be a mention of who is picking up the
dinner cheque or covering the candy tab at the cinema. By the sixth
date, couples should have an informal conversation to assess their
date's financial personality - is he or she a penny pincher or
shopaholic, risk taker or security seeker?
"Bring up your own relationship to money first to create a sense of ease
around the topic, and then ask if your date can relate," said Hart.
"Even a simple discussion about upgrading a gym membership or cutting
back on lunches out can help get feel for someone's spending habits."
2. How to delve deeper into the big 'debt reveal'
When to have the deeper debt discussion depends on the couple, their age
and the nature of their relationship, but couples should not wait until
they are signing a lease or picking an engagement ring.
"When couples are ready to have the debt talk, they should be prepared
to ask and answer much more direct questions," said Hart. "For example,
'I was talking to my advisor today, and they said I only have a few
months to go before paying off my student loans. How about you? Where
are you in terms of paying off any debts?'"
Debt doesn't have to be a deal-breaker, according to Tracy. "Believe it
or not, some debt can actually help people achieve financial goals,"
said Tracy. "For example, an RSP loan used to help maximize any unused
RSP contribution room could be considered good debt. What matters is
that debt is used responsibly and there is a plan in place to pay it
back."
3. Addressing money mismatches
If one person is saving for a rainy day but their date is thinking about
the next big shopping adventure, the relationship may be headed for
some challenges, but Hart warns against walking away at the first sign
of cash conflict.
"We can be too quick to dismiss potential partners these days; values
about money are far more important than what exists in someone's bank
account on the first date," Hart said. "If there is an issue, start
with a compliment and try to track the issue back to values instead of
criticizing, patronizing or blaming each other."
For example, a wallet full of cards doesn't necessarily mean a date is a
spendthrift or debt-monger. "Carrying a balance on a credit card to
fund short-term lifestyle spending may set off a red flag," said
Stephen Menon, Associate Vice President, Credit Cards, TD Canada Trust.
"However, using a travel rewards credit card and repaying it promptly
can provide many benefits, such as tracking spending, building a credit
history and can help save money on travel down the road."
4. Popping the 'joint finances' question
Hart said most couples say 'I do' to joint finances, in some capacity,
when they move in together. "Combining finances requires complete
openness. Couples shouldn't hide debts or spending splurges from each
other, or it will create a lack of trust which can trickle into other
areas of the relationship," Hart said.
Tracy suggests having a formal conversation to set ground rules and
develop a joint financial plan. "There are many benefits to joint
finances, but it's also important that couples set personal financial
goals outside of those they have with their partner," Tracy said. "For
example, many couples share a joint bank account to pay household
bills, but establishing a second bank account, such as a high interest
savings account, can provide a sense of autonomy and responsibility
when it comes to saving."
About the TD Canada Trust Love & Money Poll
TD Bank Group commissioned Environics Research Group (www.environics.ca) to conduct an online custom survey of 4,564 Canadians aged 18 years
and older who are currently in a relationship. Responses were collected
between January 10 and 25, 2013.
About TD Canada Trust
TD Canada Trust offers personal and business banking to more than 11.5
million customers. We provide a wide range of products and services
from chequing and savings accounts, to credit cards, mortgages and
business banking, to credit protection and travel medical insurance, as
well as advice on managing everyday finances. TD Canada Trust makes
banking comfortable with award-winning service and convenience through
24/7 mobile, internet, telephone and ATM banking, as well as in over
1,100 branches, with convenient hours to serve customers better. For
more information, please visit: www.tdcanadatrust.com. TD Canada Trust is the Canadian retail bank of TD Bank Group, the
sixth largest bank in North America.
SOURCE: TD Canada Trust
