It may not be the most romantic aspect of sharing your life together, but understanding how to manage your debts as a couple is vital to keeping your marriage as healthy and happy as possible. It can be easy to delay these conversations, however, or to resign yourselves to making multiple repayments each month.
This needn’t be the case, however. Provided you both take a hands-on approach to sorting out your finances together, you can avoid the trap of resignation or, worse still, conflict. Read more below.
Face the Situation Head-On
It can be all too tempting to avoid discussing finances – particularly when debt is involved. One of the most important things to remember, however, is that the debt will not go away on its own, and a proactive approach toward your finances really is the only way of ensuring that the problem does not get worse.
You both need to be aware of the situation; how many lenders you both owe, how much it will cost you each month, and how much money you are left with for covering the rest of your expenses. Knowing this will not only make managing the finances simpler, but it will help you both to stay on the same page, and to avoid any conflicts over money.
When you bring debt into the marriage – whether it is from student loans, medical bills, or even credit cards – that obligation remains yours, and each of you will need to continue making repayments until the debt is paid off. This can cause a few issues, particularly if one of you is further into the red than the other.
What is debt consolidation? Debt consolidation, or the process of combining all of your debts into one single, lower interest loan, can make life much easier for the both of you. Rather than making multiple, potentially high-interest payments each month, you will be able to manage it together without draining your paycheque. You can read more here for a thorough breakdown of the consolidation process.
Talk Through Any New Financial Obligations Together First
Although debt taken on before marriage is relatively straightforward – particularly if you are both aware of the situation – any new debts taken on after the marriage are not quite so simple.
Most couples will fall under a ‘common law’ agreement, wherein an individual retains legal ownership over their assets, and sole responsibility for new debts they take solely under their own name.
Unless you have opted into a community property agreement – or the new debt is deemed to benefit both of you – then any loan you take out as an individual remains your responsibility. However, if you are sharing your money equally, then this still places a burden on both of you. Even if your finances are stable, taking on new debt is a big commitment, and it may cause you to have to reorganize your budget. And, what’s more, if you or your partner fall too far behind on your debt, your joint assets could be seized as a result.
As a result, it is vital that you are both involved in all conversations before any new loans or credit agreements are entered into.
Making talks about money a regular part of your routine together may not sound like the most exciting prospect, but it is one of the best ways of ensuring that you remain on the same page, and that your financial situation does not undermine an otherwise strong and stable relationship.
Debt stress can cause havoc with your emotions, and knowing that you have someone to turn to and discuss your worries with makes all the difference – particularly when that person is your partner. Hiding the problem, or ignoring it in the hopes that it will sort itself out, will not pay off. In fact, money problems or disputes over the finances consistently rank highest on the list of reasons why couples begin to experience marital issues.
Contrary to what many couples believe, a marriage does not instantly make you responsible for your partner’s debts, but you can end up suffering the consequences of their own mismanaged or precarious finances. Being open, and taking proactive steps to mitigate any old loans will help to ensure that you remain free from the burden of financial stress, and are able to plan for a comfortable future together.