Value of Valentine’s Day money chat

Valentine’s Day may be for lovers, and a chat about personal finance certainly risks dulling the passions of the day. That is unless you love money.

Yet it is a discussion that nonetheless should happen … eventually. Often sooner is better than later, hopefully, well before popping the big question.

That decisive question could be happening right now. Valentine’s Day is the premier day for couples to get engaged and that big ask (and hopefully affirmative answer) often comes with a hefty capital allocation for a sparkling speck of costly rock set in a ring made of an increasingly high-priced precious metal.

De Beers coined the notion of three months’ salary as the rule of thumb to spend on an engagement ring amid the Great Depression. At the time, diamonds weren’t common for engagement rings. Today, the world’s priciest gem is considered the norm — and the bigger the rock, the greater the profession of your love, according to the marketing.

The ring is also a good launchpad to discuss money albeit ideally well before it is offered on bended knee, says Alysha Tse, wealth adviser at Richardson Wealth in Vancouver

“I don’t think there is really a formulaic universal rule of thumb that couples should use,” she says. “It is such a big purchase, often making it the milestone purchase in a couple’s financial future together.”

But it should really be in the context of a broader long-term discussion beyond the ring and the ‘big day’ — the combination of which can cost tens of thousands of dollars, she adds.

Given all the other needs of a couple — notably purchasing an increasingly pricey home — many Canadian love doves are skipping these traditions altogether.

A Statistics Canada report from 2022 shows Canada leads all G7 nations in common law relationships.

Tse has seen this cultural shift in her practice. Purchasing a home and starting a family are higher on the list than the ring and marriage.

Regardless, discussions about money should be happening sooner than later.

A recent Valentine’s Day-themed survey notes the money talk is tricky even if it’s happening. The poll by the low-fee currency exchange app provider Wise found 75 per cent of couples do talk about money with their partners.

That’s good news, says Ankita D’Mello, senior product manager at Wise in New York.

The bad news is four out of five have disagreements when doing so.

“Money is a deeply personal subject,” she says. “So while you can be really comfortable discussing finances with your partner, that doesn’t mean you have the same views about money.”

Indeed, it’s common for one partner to like spending money while the other likes to save, which can spell trouble.

“Financial strife is a common reason for relationships to break down,” says Blair Evans, assistant vice-president of tax and estate planning at IG Wealth Management in Winnipeg.

It’s not the leading cause: waning connection and communication is often cited as the top reason. To that end, financial intimacy can help couples remain connected.

“Couples often feel a lot closer after they’ve had money conversations because they are communicating about one of the most important facets of their lives together,” Evans says.

After all, money discussions are really about a couple’s future together. One way to ensure you’re rowing the love boat in the same direction is to work with an adviser to invest for the future.

A recent survey by Scotiabank, examining how couples invest, did find an increased potential for mutiny, revealing nearly four in 10 of surveyed couples had different approaches to investment risk.

“Investing can be a very emotional topic, risk in particular,” says Helen He, vice-president of retail investments at Scotiabank in Toronto. “It is very much tied to your vision for the life that you want to have together, with investing serving to achieve that vision.”

If you have different philosophies — you prefer stocks and cryptocurrencies and your partner likes GICs (guaranteed investment certificates) — setting common goals can avoid drifting apart financially.

“Even if you have different spending philosophies, as long as you establish common goals supported by a financial plan, you can still reach the milestones you want to meet,” He says.

Seeking help from an adviser to build a plan can reduce the likelihood of friction because it offers a safe space for what can be challenging discussions, she adds.

Couples also benefit from establishing healthy financial traditions to do at home. Indeed, many young couples today are doing just that, having “admin nights” to pore over their finances, D’Mello says.

“I don’t love the term, but regardless of what the kids call it these days, an approach establishing regular talks about money is beneficial,” she says. “It’s all about making discussions about money more approachable, a bit more fun versus a big scary thing that must be done.”

Who knows? You just might come to love it.

Joel Schlesinger is a Winnipeg-based freelance journalist

joelschles@gmail.com