The Prenuptial – Naughty, Nice or Perhaps Just Plain Necessary?
I began working as a babysitter for neighborhood families when I was 12. Sometimes there was one kid and sometimes there were upwards of four. My pay – .50/hour and $1.00 after midnight. This is when I started saving.
When I was 15, I worked as a sales clerk at Marks and Spencer in St. Vital mall, a store with deep roots in the United Kingdom. I wore a uniform, sell what I considered “older lady and gentlemen” fashion and I made $2.95/hour. The upside was discounts on traditional English fare, Shepard’s pie, bangers and mash, pork pasties and shortbread cookies.
For the next ten years, I worked part time while going to university (I might add, there were no RESPs at that time – I had to pay my own way). While living at home, I took out a student loan for $1,500 and invested it in an RRSP at 12% interest (unheard of in today’s times). It was my first official income tax deduction. I paid for my university, bought a car and continued to save.
At age 25, I got my first teaching job, at 27 I moved to Japan for a year and at 29, I bought my first house back in Winnipeg. I continued to save and invest. I planned to retire at age 55.
At 38, I got engaged. While I did not consider myself to be “rich” I had, over the years accumulated some assets – my house, RRSPs, a TFSA, a pension and a car. Along with these assets, I had aspirations to manage them to help me design the life I wanted.
While it’s not something that I was planning on, I had to think about what would happen financially if I were to go through a divorce. (Did you know that in 2019 approximately 41% of all marriages ended in divorce?). A divorce could mean losing half of everything (including my home, as that’s where we took up residence once married) and the ability to retire at 55 as planned.
I’m the type of person who values safety and security, and just wasn’t willing to take this risk. This prompted me to broach the question of getting a pre-nuptial with my fiancé.
I got the response I was expecting – “What don’t you trust me?”.
In reality, a pre-nuptial has very little (if anything) to do with trust and everything to do with minimizing risk for all parties involved. My fiancé had children from a previous marriage, and a pre-nuptial would provide protection for them as well.
As it turns out, the relationship did not survive. With the pre-nuptial agreement, there was essentially no need to discuss the division of assets or spousal support that was all covered in the document. While our hearts were not intact, we were both financially stable and we each had a home to go to.
A pre-nuptial agreement may not be the solution for everyone, but it was important to us. I encourage you to ask yourself “how might a divorce affect me financially?” If you do not know the answer, it would certainly be worth finding out.
P.S. I am still on track to retire at age 55.