Helpful Debt Advice for Newlywed CouplesApr 21, 2017
Despite the fact that nearly all couples agree that it is important to discuss money and debt before getting married, the reality is that most soon-to-be brides and grooms tend to avoid the topic. Most brides and grooms also enter marriage carrying debt. In fact, nearly two-thirds of Canadian couples report bringing debt into their marriage. For indebted newlyweds, here is some advice that will help you and your partner work together in order to tackle the debts you both owe.
Talk about money – honestly and often. Open dialogue in a relationship is key, especially when it comes to matters of a financial nature. Although you may have avoided the debt discussion before tying the knot, it’s time to start opening up with your partner about your finances and your debt. Some questions that may be helpful to ask your partner include:
- How much debt do you carry?
- What types of debt do you have?
- What are your goals for paying off your debt?
- How do you manage your money and your debt?
- What other financial goals are important to you?
Asking these questions and making financial discussions a priority will help to ensure that you both have a clear understanding of your partner’s financial situation, financial goals and priorities and attitudes towards spending and saving. It will also give you a better sense of your joint financial situation.
It’s also important to note that these discussions are not a onetime thing. Continued open dialogue with your partner will help to ensure you stay on the same financial page and continue to work together as a financial team.
Make sure you’re both on board with your debt repayment plan. Take advantage of your open and honest dialogue about finances to create a debt repayment plan that you can both stick to. Outline your specific goals for debt relief, and include the strategies and steps you will utilize in order to make these goals happen.
For example, if you carry high balances on your credit cards, look for ways to reduce the amount of interest you pay. You can focus on repaying these high-interest debts first, which is the premise of the debt avalanche method. Or you can look into a debt consolidation loan, which will pay off your credit card debts, leaving you with one loan with a low interest rate attached. Consolidating your debt in this way will allow you to save money in interest and will likely allow you and your partner to pay down this debt more quickly.
Creating an effective debt relief plan is not always a simple process, however. Sometimes you and your partner may need some guidance regarding how to reduce debt. The Financial Consumer Agency of Canada (FCAC) offers debt advice, online tools and other resources that will help you and your partner better understand debt and borrowing.
What debt advice would you share with a newlywed couple? Share your thoughts and join the conversation with BDO Markham using the hashtags #BDOdebtRelief and #LetsTalkDebt.