Are You and Your Partner Debt Deaf?Feb 14, 2018
There’s a reason why debt is the other four-letter word—it can be very intimidating. Knowing you have a lot debt to pay back, and that it may take a long time to do so, it can push you to ignore the problem all together. However, ignoring the familiar sounds of financial trouble will only get you into more debt. Instead, here are some ways to face and talk about debt with your partner.
Speak (and hear) the truth about debt
February is a great time to communicate your commitment to your partner. But this year, go one step further and communicate your commitment to resolving your debt together.
Canadians in relationships aren’t too eager to talk about their debt. In fact, according to the most recent BDO Canada poll results, as many as 20 per cent didn’t mention their debt to their partner until they were living with or married. That’s not the housewarming–or honeymoon–gift anyone wants.
Blogger Jessica Moorhouse offers great, honest, advice about paying off debt and using credit responsibly. Her advice may be a good financial introductory talk for you and your partner.
Why it matters
Nearly 60 per cent of respondents in a relationship say they want to change at least one of their partner’s habits. That means there are a lot of frustrations–and a lot of debt–piling up that doesn’t need to be. Debt–and consumer debt especially–is a solvable problem.
If your or your partner’s overspending, lack of a budget, or not saving for long-term goals is causing trouble in your relationship, you probably aren’t alone. But a little communication and cooperation can improve your relationship and decrease your debt, and improve your credit score for good financial health.
Setting a good financial example
Of all the surveyed groups, Millennials are the most likely to talk about money early on with a new partner, but Boomers are the least likely.
Take a page out of the millennial money book, and open up about your finances with your partner. You may find that two sets of shoulders bear the weight of finances better, because the more you communicate; the more likely you are to find a solution that works for you and your partner.
Avoid future debt together
Paying off debt can take patience and a commitment to your goals, and timeline.
But just because you’re paying off debt doesn’t mean that you should ignore your other goals. Talk to your partner about creating an emergency fund that will help you cover unexpected costs. That way, you won’t have to take on more debt to make ends meet.
Also, take a good long look at your current debt, and how long it’s going to take you to pay it off. Set your timeline realistically, and talk about your successes or hiccups as you encounter them. All financial plans should be agile–as things in your life change, adjust your plan, but never abandon your debt reduction.
Tom Drake at MapleMoney touches on emergency funds, and eliminating high-interest debts.
You can also check out the Financial Consumer Agency of Canada’s online debt calculators to understand what’s a realistic timeline for repaying your debt.
This year, give debt your attention. Listen to your partner’s concerns about your finances, and speak up about your own fears. Come up with a plan to reduce your debt together.