11. Money & Marriage - From The Sask Wedding Podcast w/ Matt Ramage
Transcript:
Welcome to episode two of the 2nd season of the Canadian money roadmap podcast. I'm your host, Evan Neufeld and today's episode is a bit unique, because I'm actually the guest. My friend and local wedding photographer, Matt Ramage asked me if I'd be willing to be on his podcast The Sask Wedding Podcast, where he talks about all thing’s weddings. The episode focuses on money conversations you should have with your partner, including some more general topics like budgeting and spending, but also specific advice for the wedding and honeymoon.
Matt is a great photographer and I encourage all of you to look him up and give him a follow, more specifically if you're in the Saskatoon, Calgary or Kenmore areas. If you're looking for a photographer, Matt might be your guy. I have links to his Instagram and website in the show notes. So without further ado, we'll turn the tables over here to The Sask Wedding podcast.
Enjoy.
Matt: Hello, you are listening to The Sask Wedding podcast. If you're a bride to be, or just love weddings, we created this show just for you. I'm your host, Matt Ramage. I'm the owner of MJ and Co Stories. A photography and film company based in Saskatoon. On this episode, we have our guest, Evan Neufeld. Evan is a financial planner at Enns Baxter Wealth Management here in Saskatoon. He is also the host of the Canadian Money Road Map podcast, which is focused on personal finance. Welcome to the show, Evan.
Evan: Hey Matt, thanks for having me.
Matt: Today I wanted to cover two things specifically, and then we'll talk about managing money with actually planning a wedding. But the reason I wanted you on the show is I wanted to cover a couple of things.
The first one is how to manage money while planning a wedding and then some things to be aware of when a person goes from handling their own money to being in a relationship. I Googled this and I remember from my own marriage counseling, that the number one cause of stress in a marriage is money. Statistically, that's the one thing that's on the top of the list, causing stress in marriages. It seems like it's something that's avoidable, that you don't necessarily have to get into a bad state like that. Now you work with hundreds of families across. Canada, is that true, have you seen money being a center point for stress and in relationships?
Evan: Yeah, Good question. As financial planners, we kind of have a selection bias problem where the people that we typically work with are the people that are actively trying to improve their finances already. So from my clients, I don't see it as much necessarily, but I've seen the same stats that you have, that the number one cause of divorce and arguments in marriage is money. When people come into my office and sit down at my desk, they’re not having active arguments here, but my job as a financial planner is to inform people about the impact of their decisions. Hopefully they can take that information back home and it'll cause fewer arguments, because I'm a big believer that there's no set rules when it comes to managing money, but you have to have your own system. Once you have your system, you have to communicate with your partner about what's going on with it. That doesn't mean that everybody has to be an expert, but as long as you have a basic idea of what's going on, that'll hopefully limit as many arguments as possible.
Matt: So having that communication and that plan. I’ve had people reach out to me when I was in my early years of my marriage asking if I wanted a financial planner and my initial feeling was always like, Oh no, I don't have extra money to save. So I just avoided it. What's some actions a person in that situation could do to move forward in their life and take control of their finances.
Evan: If we're talking about things that you do early on, actually on my podcast, I talk about some of the financial foundations that you should have in place first, before you start worrying about things like investing and growing your money. There's a lot of things that you can do in advance of that to make sure that you're setting yourself up for success in advance.
One of the first ones is budgeting and I personally hate budgeting. On my podcast what I tell my clients is that you need to have a system and your system should automate as many things as possible. This is a little bit more of a long-term thing, but the sooner you start it, the better. Things that you know that you want to do every month like debt repayment, paying your bills on time, putting away some money for a rainy day and then saving for long-term and doing some investing. All those things that you can automate, I would say start there. So you don't have to waste any brain capacity on things like that. So for a good first step, take a look at all of the things that are leaving your account every month and see how many of those things you can automate instead of having to choose to do them every month.
Matt: So, for example, having a savings account with an automatic, bi-weekly payment on your payday to that savings account or like that kind of stuff.
Evan: Exactly. For example, take property tax. Some people have it come off their mortgage but I paid annually. What I do is I prepay it by essentially saving over in a savings account. When I get paid, I have my property tax amount go over to another holding account. Then when the time comes to actually pay that bill, I've got cash on hand and I don't really have to worry about it. It's ready to go.
Matt: Sounds awesome. I've been in that place where I've had a big bill come that I wasn't expecting and then to catch up on those kinds of bills can be really, really challenging. I can see how automated that would be good. In our family, we've even automated our kids allowance every week and we have a policy with them that they aren't allowed to borrow money from us. There's this philosophical idea that you can't do good or bad things unless you have the power to do good or bad things. As a kid, I didn't have a lot of access to money. I didn't get an allowance. I'd get toys at Christmas or my birthday, that was kind of it. We live in a different time now where there's a lot more wealth around. Kids and just families in general seem to have a lot more disposable income. That's kind of why my wife and I decided to just like, Hey, we're going to give it to the kids.
My youngest is four years old and she gets $3 a week. Like not nothing but not a lot. But it builds up over time. It's automated and they always ask us how much they have and if they want something, we're like, okay, this is how many months it would take to get an iPad pro, it would take 18 months or whatever it is.
And mixing all your birthday money. So that's been a thing for us that's been important. Just building in a little bit of that for our kids and then having it automated as a parent has been good. Then it's not hard to honor that commitment we've made to the kids where if it was cash and if you run out of cash and if they have a weekly allowance or whatever it is, you might miss it. Or it's three months later and you're like, Oh, which ones did I pay you for?
Evan: People do that all the time, not just with things to their kids. Like I I'm sure you've had that conversation in your house like, “Oh shoot, did we pay that SaskPower bill?, Um, did you cover that this month?” Or, you know, “Oh yeah, we've totally been saving” and then you go back and look at the end of the year and it's like, Oh wait, no, we actually didn't save as much. Charitable giving is another big one that people say they want to prioritize. Then once they start counting up older charitable receipts at the end of the year, you realize, Oh my goodness, I didn't get nearly as much as I thought. So things like that, the more you automate it, the less stress you have in the moment and the less regret you'll have at the end of the day.
Matt: What's that saying, money not seen is something? My dad said it to me the other day.
Evan: I don’t know that one. Is it a version of, “out of sight, out of mind?”
Matt: Basically it's like, when you get your money, you pay your bills and then money not seen, then you don't feel so bad about not having it. I'll remember it later, right after we hit the record button to stop this. I'm going to remember it and feel like, “Oh, I should’ve remembered that.
Let's talk about marriage. Now a lot of couples are coming into relationships at different points. Some are It's around the marriage when they first get their home and some its like years before. But there's that one point where you go from not being in a household with your partner, to being in a household with your partner. You mentioned debts and bringing debt into the marriage. How should couples treat that? Should couples treat it like while you brought that dead end and that's yours, you cover that yourself or, you know, should a couple get into like a sharing mode or is there a best practice?
Evan: That's a good question. Like I mentioned, there's no right or wrong way. It's just whatever works for you guys. A number of couples could have similar levels of income, similar levels of debt. Or there could be the complete reverse, where someone could come into the relationship with a pile of debt, but the other person is the one that makes most of the money in the household. For each of those situations, the answer is going to be very, very different. I always recommend that people talk about things first. So that means before getting married. Talk to your partner about money and understand what each person brings into the relationship. You mentioned debt, but also assets. Like if one person already owns a house, how are you going to manage that? There's no right or wrong way necessarily. Now I'll maybe touch on some legal things here. Try not to put anybody to sleep. I'm not a lawyer, and every province is different, but essentially the things that you bring into the marriage are yours. Then the things that are established in the marriage are shared.
When it comes to sharing a bank account or having your own, or one person pays the bills and the other person pays the debt, It doesn't really matter. As long as you have that system and you stick to it. I usually recommend that people share as many things as possible because like I said, any income that you earn, any assets you accumulate when you're married, those are all shared items. If you were to get divorced, I know this isn't a divorce podcast.
Matt: Its good to talk about because there's a lot of ideas around this. I've heard, prenups, do they work or not?
I mean, not that you're a lawyer, but it seems like people don't understand that when you are even common law with someone or married, there’s the sharing. Then when, if there is, you know, whatever you call it, a divorce or a separation, those things have to be split.
Evan: Yeah. You can be as generous as want at that time. You're not stuck with one thing if one person says, okay, just have that and whatever. That's up to the lawyers to decide. But at the end of the day, if it's going to get down to the nitty-gritty, everything gets split anyways. You might as well share it while you're there and then have that conversation about how this is all going to get paid.
My wife and I, we share everything. She came into our relationship with a little bit more student loan debt and I’ve purchased a business and things like that. So we have different types of debt. We've purchased cars with a car payment. So it gets a little bit complicated if you try to split everything evenly. So we decided we just share everything. It makes things so much easier. We don't worry about anything like that.
Matt: That segues into this next part then really well. So you're sharing and my wife and I also share our income. So we don't split it, we just share it. But how do you spend? Let's talk about spending if you're sharing everything. Is it a best practice to talk to your spouse? Is it good to have like an allowance? I mean, we're all adults here, but the worst thing that can happen is too much spending happens by one party. There's the resentment that builds up and then all of a sudden you have this loving couple who has major struggles, just because of a difference or a lack of understanding of finances. How do you handle that?
Evan: Talking about spending is the big one. I'm kind of beating a dead horse about the communication thing here, but it really is the most important thing. So when I speak with couples, almost a hundred percent of the time one person in the relationship is a spender and the other one is a saver. Have you experienced something like that?
Matt: Yeah. And I'm curious if it's a natural thing, you feel the safety of the other person if the other person's a saver, then you're like, “Oh, I can just spend all the money, we got lots of money”. Then the other person that carries all the burden of all the stress.
Evan: Often, the person that is more comfortable with spending is often the person that's less willing to dig into the finances and they may say,” Oh, I'm not a money person, that's his or her job” My recommendation is to always communicate about what is going on with the money, even though it is pretty natural for one person to kind of take the lead on things that's going to happen. It doesn't mean that everybody has to share the burden equally of understanding everything that's going on. But if you're the person that's not confident with money, if you know three things here you're going to be in pretty decent shape to prevent some arguments. First one, where does the income come from? This sounds a little bit silly but most people just have employment income, but other people have other sources of income or other side jobs and things like that. So where does the income actually come from and how much is it? So that's the money coming in. The second one is what needs to be paid every month or every year. So some things that get paid every month, you know, your utilities, cable, cell phone, and things like that. And then some annual ones might be property tax. I just had to buy winter tires. You know, I hopefully won't have to do that every year, but some of those big things that might come up at certain times of year. Gifts, that's another big one that people kind of ignore
Matt: Yeah, I was just going to say Christmas. Christmas comes, it just all of a sudden shows up after every November, it just happens. And it's like, where did that come from?
Evan: Knowing in advance what comes in, what needs to go out and then how much debt you have. The reason that the debt is so important is that the debt is always the first thing that comes for your money after you earn it. Understanding how much debt you have, where it is and what it costs you, that'll kind of give you a good picture of how much of your own income needs to go somewhere else before you're able to spend it.
So even though if you're not a money person, I'm pretty sure you can kind of sit down and have this conversation with your partner about where does the income come from and how much is it every month, approximately what needs to be paid every month and then how much debt you have. If you have a handle on those three things, you're going to be in really good shape.
Matt: I like that. And I think it's what you said about just like saying you're not a money person, you can't use that as a cop out not to be part of that conversation. I remember my wife and I did; I'm sure you've heard of Dave Ramsey, I think you've actually referenced him on your podcast; he talked about it as like couples have to come together. You can't just have one person do the budget. Both people have to do the budget together. Both people have to understand what's going on. I think that just puts the two people on the same page, which you know, goes to your comments of communication.
That forces a sit-down and an understanding. There's a part to it that it might be painful, especially if a large amount of debt. It might be actually painful or even credit cards. It might be painful just to sit in there and face the facts, Right. It might be the thing that you've been avoiding for months, years even. And that first time you sit down might be the hardest. Then after that, it's not so bad. There’s an anxiety that goes away when you make those first steps to taking control of your finances, that that's what I've experienced.
Evan: Yeah and Dave Ramsey references like his baby steps, those things it sounds kind of juvenile, obviously baby steps, but they're really important things to kind of get things started. If people are looking, look up Dave Ramsey's baby steps for your money and those would be good places to start. I've kind of alluded to some of them already, but you mentioned one person doing the budget and things like that. I'm a big, big believer of each person in the couple taking some sort of responsibility over part of the money. So, for example, my wife makes sure that she takes care of all of the bills every month. Some of them are automated, like I mentioned, but some of them aren't. And so, she makes sure that all of those get covered because I'm more naturally the “money person.”
I take care of the investing and some of the debt repayment and things like that. But we're both participating every month, each in a way that we feel comfortable.
Matt: And by doing that, making that a habit, is this like something that's caused money to, I mean, this is a personal question, but is money something you even fight about or let's say, not fight, but causes stress as it has that stress basically not exist in your relationship.
Evan: It’s less, I don't think money stress ever disappears, but you can limit it and by communicating what's going on or just having that frank conversation of saying, you know what, this month, this isn't going to work, or we're not able to buy this gift this year or the large purchase that we were hoping to make, you know, this changed and so we can't make that purchase this month. As long as you're just straight up and honest about it, it prevents the fight after the fact, in my mind. It doesn't make it any easier at the beginning, but I'd rather have a tough conversation than have a huge debt to pay that actually impacts my money. But that's more of a relational thing I think, with your partner than anything,
Matt: For sure. I think those are really, really important parts. Earnings disparity, so we talked about sharing and I mean we can talk about this maybe with children and growing a family, is there any tips? Typically, people who get married, tend to have kids. I've photographed many weddings in my life and a lot of those people start families actually very soon after. There's this thing where they might even be two working professionals, making double income, no kids, they might've just bought their first house or looking to. Then all of a sudden you know, mom's taken out of commission because she became a mom and she's not earning. Is there a conversation that a couple should have before starting their family? Just to sit down even and maybe be like, okay, with you on mat leave, you know, mat leave, doesn't pay (depending on your job), your mat leave isn't going to pay you what you were making before. Mixed with that new house you just bought. I mean, what kind of conversations should couples have before starting a family?
Evan: So, when it comes to money and planning for kids, the best part is that it typically takes nine months before it becomes a reality. So, use that time to plan, right? Depending on your job, you may or may not have a topped-up mat leave. You might be on EI, things to keep in mind. There is the potential reduction in income and then there's also benefits that come on the other side of it. So, once you have the kids here in Canada, we have the Canada Child Benefit. I won't quote specific numbers, because it's always different depending on your income level and what the government has decided to do that year. But essentially there are other sources of income that do start once the kids come. So just sitting down and doing a little bit of research for yourselves to see what you might qualify for.
Those would be good places to start before worrying about, oh my goodness, how are we going to pay for all this stuff? Take a calm, cool, collected approach. What I would recommend you do is that as soon as you're starting to plan for kids and expanding the family, which coincides with a reduction in income, start putting aside some money. So like a rainy day fund or an emergency fund, as I often call it. I find most people actually end up not being as impacted as they thought they would have been. But at the very least, then they have some cash set aside. In case the reduction in income is more impactful than they'd planned, they've got the cash ready to go so they can keep going.
Matt: Well, Yeah. I think that part you said about it doesn't change as much as they think, like your lifestyle completely changes and the places you may have been spending, your extra money isn't there anymore. You might not be going out as much, well, for sure you won't, I can speak from experience having children. You're not going to be going out to restaurants as much or doing as many things. So there’s some easy change, like big changes that just happen. It's almost like your life isn't as impacted as you thought it would be.
Evan: Right. I just think of our situation here, last summer for example, I kind of paired a business trip along with some personal time out in Kelowna. Kelowna is wine country and so we said, we're going to take the afternoon and do wine tastings and all these different things. You buy some bottles of wine and whatnot. I'm not saying you can't necessarily do that with kids, but you're probably not. Activities that you choose to do, they're going to change and they're often cheaper. Like going to a park and playing outside with the kids and whatnot, as opposed to go into fancy restaurant. That's an extreme example obviously, but I'm sure you can relate to the fact that it doesn't mean that you're just sitting around watching TV all day. It's just the types of activities are different and often times it cost a little bit less money.
Matt: Absolutely. You know, what's an afternoon swimming cost at a leisure center. It's $15 $16, like I don't even know, it's not even that much money. And that's for a family of 4, we're a family of five. Or going sledding, it's free, you know? Let's talk about getting married.
This is one that has a lot of moving parts of wedding. Weddings can be cheap; weddings can be expensive, and people can overspend, or people could follow a budget. Now you sent me some show notes ahead of time, which I read over and I really liked. So, let's just go through this.
This will be for those folks listening who are planning a wedding and you want to have your dream wedding and you have something in mind, like a fantasy of like this perfect day. Then it costs money to do almost anything you fantasize about or dream about, it's going to potentially cost money.
Let's talk about how we get there. If you need that money and you want to be realistic, what's the first steps before you have your wedding.
Evan: Sure. I think being realistic is the first step. Being realistic involves understanding how much money you have to play with and how involved you want to be.
So in my case, for example, when we got married we wanted to prioritize things like photos and convenience. So we spent more of our money on the venue because the venue was going to take care of most things for us and host, catering, and all that kind of stuff. We had less set up, take down, and organizational things that we had to do, but yes, it cost a bit more money. Other people want decor and food and all that kind of stuff to be exactly how they want it. So that's going to involve more personal work and costs. Before you book anything, understand your budget and how much you're playing with first, that's going to be huge. From there, Matt, I don't know about from your experience, but how often would you say that parents are involved in paying for things?
Matt: Almost all the time. It's in different capacities for sure. Some of it I see directly, sometimes the couple’s parents will pay us directly. Another scenario is they'll cover the cater or the hotel or, or certain things. So, there's a variety of ways that parents have helped out. Then there's lots of couples where that isn't an option for them and they're spending their own money to get what they want.
Evan: So, right. I think the main thing there is that for every person it's going to be different probably. Sometimes, maybe you could speak for or against this, but if the parents are paying for something, sometimes it's their priorities that come to the top. Like specific venue or the number of people that come, or, you know, the suits that the guys get or whatever the case may be.
Matt: Yeah, it's not free money. There are strings attached sometimes.
Evan: Okay. That's another point that I'll maybe jump to there. Understanding who is paying for what and how much of it is actually a gift from mom and dad or grandma and grandpa or whomever? Is it a loan? Are they just saying we'll help you out with this and they're expecting it back in some way or another? Those are huge things because parental loans, those can be a huge point of marital strife as well, because it impacts your relationship, but also your relationship with your parents and in-laws. That’s not fun. So if you understand who's paying for what at the beginning, then you can set up a plan.
If it is a loan, a plan for paying them back on a set schedule and you can have it on paper and then all the arguments are done. It doesn't mean it's going to be fun to pay back your parents for something like that, but at least you have it on paper and there's not going to be any arguments about it.
So First understanding who's paying for what. How much your budget is then. I'm a fan of spreadsheets and if spreadsheets kind of freak people out so you can get a notebook or whatever you want to do. Spreadsheets are great. If you have an iPhone, just going to Numbers, Numbers is not scary like Excel is. But put in all the different things that you want for your wedding, and then do a little bit of preliminary research and put in a potential budget and things that you want to prioritize. Then you can put in things like when your deposits are due, who pays the remainder and when, but yeah, understanding who's paying for what and what that budget is.
Those are the first things for sure.
Matt: Yeah, I like that. When I was a teenager, my dad refused to lend me money. And as an adult, like now I'm 34 and I get it now. I think it was a Dave Ramsey quote, it was like, you don't want the Turkey to taste different at Thanksgiving because of money. You don't want to sour your relationships over that. Maybe even decide if you even want to borrow that money if your parents are offering it. Sometimes, it's just better to not do that. Thankfully my dad didn't lend me the cash when I wanted it. You know, it's been good for me in the way that I've had to figure out things on my own and get there. In the past couple of years, now it's kind of different where I have an income and if I need to. Like a couple of times I've been like, can I just borrow cash for like, you know, a month here?
And then, and then he's done that. And then I've always paid him back. But you know, it was, uh, I got married when I was 21 and my payback potential was not crazy high. Just because of my income was so much different than it is now. I'm going add one more little tip in here and this is a personal thing.
If you're planning a wedding, my recommendation would be don't get everything, but to stick in your budget, you buy the cheapest of everything. Pick what's the most important to you and put your money there and decide not to get things. Prioritize a list of things you want. If you don't have enough money, just don't even do them at all.
Like for example, if you have a wedding reception and you have charger plates. That's what it's called. It's like the gold plate that doesn't even do anything. It's just, you put your food on it. I think those are like two or three bucks a piece to rent, you know?
And tablecloths, you know, our last episode we had a wedding planner on, her name is Crystal McLeod from RSVP and she was saying there's an order of priority to make it look nice. And you go up bigger, like you know, you have big flowers and stuff like that.
You can spend more money on flowers than photography and videography, it's easy to overspend and my recommendation would be to get the things you want. Get what you want and put the money there instead of splitting it over everything. So nothing's really great, you just have everything. I think that you might regret that if you're just kind of spreading it too thin, spreading a budget too then.
Evan: Yeah. I was going to mention things like deciding in advance what your splurge items are going to be because you know, the best laid plans, right?
Everybody, even if you do make a budget, some things are going to be more expensive than you initially thought. So if you kind of talk about those items at the beginning, like what are going to be your, your big ticket items that you're willing to spend a little bit more on in advance, that'll kind of prevent the Sophie's choice at the end of the day.
Let's talk about honeymoons.
Matt: Sure people, you know, we live in a pandemic world right now, but when things are kind of back to normal, all those honeymoons that people haven't had, they're going to have. In a normal world that's pretty common that people will either have the honeymoon right after, or at least within the first year. A lot of couples save it to winter, but they can be expensive. So what should couples, you know, do for that?
Evan: Okay. So you're going to hear a common refrain here. You're going to talk about it and you're going to plan for it in advance, because a honeymoon can be expensive. It's going to be expensive, whether you plan for it or not. So you might as well plan for it, just so that you don't have any surprises. So a budget and a conversation limits surprises. The worst thing that you could do when starting your marriage is to overspend in a big way, before you've even, you know moved in together or like right after the honeymoon.
Then you're kind of dealing with an unexpected debt right from day one, not a great place to start. So I always recommend, like I mentioned before, setting aside a little bit of money every month or every year, a week or every time I get paid or whatever the case may be for specific things. If that's your honeymoon, do that so that you can have a specific amount of money in advance. Yeah, you're going over spend a little bit and to have some fun and whatever.But that kind of limits the impact of the spontaneity of things that happen on a honeymoon. Another thing that I usually recommend to people is that if you're going to a foreign country, again like you said, Matt, this is not really happening these days, but if you're going to the U.S. or you're really going forward and going out to Europe or something like that, I recommend budgeting in the currency that you're going to spend.
I don't need to get into the weeds too far here, but essentially if you're going to the U.S. like, we went to Hawaii, for example, and because the value of foreign currency fluctuates so much, if you happen to go on a honeymoon at the “wrong time”, and the currency doesn't work in your favor at that point, your honeymoon could end up costing you potentially 15% more hypothetically than than if you had purchased currency at a different time. So to prevent that issue, I recommend that people save in the currency that they're going to spend. I have a us dollar account. Most banks offer one for very low cost. If anything, my bank doesn't charge anything for that and we set aside a little bit of U.S. currency every month, every two months. So that way it limits the cost of getting the timing wrong on your currency exchange. And it also helps you budget in advance.
Matt: That sounds like a great tip just to not just do for your honeymoon, but to do for your life. If travel is something you value, especially like for my family, we try to do a trip to the States. We love going to the U S and Hawaii is next on the list and we know it's a place we like to go. We were supposed to go to Disneyland last month even and it's like, Whoa, you know, we even have a free account, we're with RBC, they have it with us because we have our mortgage there and everything.
It's like we do have that U.S. account. We just haven't used it and now that you're saying this I'm like, I should be doing this like even a little bit. And then it's like the American money's there and yeah, you're right it just distributes that risk of going up the wrong time. I think we went last year and it wasn't so great. A Starbucks here is like five or six bucks, but in the States it's five or six bucks American. And then we like to go to the big cities too. And it's like, nothing like it's us dollars, but everything's like the same dollar amount. If that makes sense, like going out to a restaurant is a hundred dollars easy, but that's a hundred U.S. dollars, not just a hundred Canadian.
Evan: Things do change a lot. Like people don't really think about it, but we watch currency pretty closely here. In the the thick of the pandemic in March there, one U.S. dollar was, you know, you can get it for like 65 cents. Or you get 65 cents Canadian or sorry, inverse when Canadian dollar you get two 65 cents, U S and now it's pretty close to 79 cents.
That's a huge percentage change, especially if you're spending a lot of money with a family and going out for meals and hotels and all that kind of stuff. So you always want to be careful about the number of times you change your currency over. If you don't do what we're talking about here, and you just take out all of your U.S. cash the day before you leave, and then you come back and you have us cash and you put it back in your bank account.
The bank takes a little bit on each transaction. And so that way call it 5%. I think it's typically a little bit less than that, but if it's 5% each way, then you end up losing about 10%. So that's a hidden cost that you might not anticipate as well. So if you keep a U.S. dollar account, If you plan on going to the U.S. more often than not, then that way, if you come home with any U.S. cash, then you can just put it right back in that account, because you know, you're probably going to spend it next year anyways.
So you're kind of pre budgeting for the next one and you don't have to pay the currency exchange rate.
Matt: Awesome. I'm going to end it on one more little thing. When you spend money that you have and I'm sure you have more information on this, but this is a Dave Ramsey thing again, spending money you have, you'll spend less than if you don't have it.
And there's this psychological thing where people just like, go, what the heck? You know, like the thought of like, I'll never be here again or whatever those kinds of things can taint your thinking. You could probably easily spend 50% more on the same trip than if you had the cash there.
If you have the cash, you're more likely to save and budget. Maybe you get an Airbnb with a kitchen and you go to Costco when you get on your trip. And instead of just like eating out the entire time. And so having that cash, saving it up, planning for it probably is the biggest part. It makes a huge difference. That's an application you can put everywhere in life. When you talk about it and plan about it. So thank you for sharing that.
Evan: Absolutely. Anything else you want to add there? Well, that was kind of leading into like what you mentioned there kind of reminded me of just like the problem in general with spending on credit cards.
Like you're prone to spending more on credit cards than you are with your debit card or with cash. So that can kind of be a problem in and of itself. However, one specific item that I was going to recommend for people that are getting married and then bringing other finances together. If you do have credit cards or student loans or car payments or mortgage, things like that.
I would really recommend that both of you keep some individual credit items or go joint on the mortgage or things like that. So you build up credit in your name. More often than not. I'm actually seeing the bank of dad covering things like your mortgage and whatnot and life can really get ahead of you and to the point where you could be in your thirties, forties, fifties, and never have had any credit. You know, that's a good thing.
Matt: Oh, you're saying people's parents sign the mortgage. So the family is still paying it, but then not getting any of the credit on their record, right?
Evan: Exactly. And so it's not that I'm telling people you should have debt because that's a good thing, but one day you might need it. And if the bank and the credit Bureau and whatnot says, well, we don't actually know who you are because you've never had credit before. They're not likely to give you the amount that you need or want, or let's talk about the worst case scenario, that one of you passes away.
And if that happens to be the “money person”, who did all of the saving, registered all the cars in their name, and things like that. If that person passes away, their credit rating does not transfer over to you and making you then credit worthy. So even little things like each having your own credit card open, spend a little bit, always pay it off.
That's always the main thing with credit cards, but if you each have some credit in your name, um, you won't find yourself in really, really significant trouble, if the worst should happen.
Matt: I love it. That's some really strong advice. I really like that. Evan, thank you so much for coming on the show. How can people find you?
Evan: Yeah, so we're here in Saskatoon. I'm not sure where you have listeners here, Matt, but, uh, we're in Saskatoon. You can find us online at www.ennsbaxter.com. Our office is in Stonebridge, obviously we're closed to the public these days, but yeah, we're here in Saskatoon and our website is easy, www.ennsbaxter.com
Matt: Awesome. I'm going to put that link in the show notes. Thanks so much for joining me. I thought this would be a really good episode. It's not the, you know, we're not talking about flowers and photography and what meals you should have or what cake you should have on your wedding day, but setting yourself up for a successful relationship where the Turkey still tastes good when you're sitting there with your parents. Or, you know, you're not rolling into your first kid with a $50,000 loan from what you've used to pay for your wedding.
I think those are some, some good things that people could avoid they'll be much happier. And they'll think more fondly of their wedding day because of that, I think so.
Evan: I would agree. Yeah, these are all good things to keep in mind.
Matt: Awesome. Well thanks again and we'll chat soon.
Evan: Thanks for having me, Matt. I appreciate it.
Thanks for joining me today on the Canadian money roadmap podcast. If you enjoyed today's episode, I'd really appreciate if you left me a review on Apple podcasts with your biggest takeaway. If you have questions or ideas for topics you'd like me to discuss on future episodes, please reach out via my contact info in the show notes.
This podcast is intended to be educational in nature, and you should always consult your financial, tax and legal advisors before making changes to your financial plan. Any rates of return discussed are historical or hypothetical and are to be used for educational purposes. Only Evan Neufeld is a Qualified Associate Financial Planner and Registered Investment Fund Advisor. Mutual funds are provided through Sterling Mutuals Inc.