Many couples have to deal with debt at some point in their lives. Dealing with debt as a couple, like student loans, credit cards, or sudden costs, needs open conversation, teamwork, and a shared approach to money.
In this post, we’ll look at:
- if debt can affect your relationship
- how to find out if your partner is in debt
- and what you can do to help them
We’ll also explore seven strategies that you can use to get out of debt as a couple.
Can Debt Ruin a Relationship?
Money is a big reason why people fight with each other. It can be hard on any relationship to deal with credit card debt and calls from creditors.
According to an online poll by Harris Poll for SunTrust Bank, 35% of people say that debt is the cause of stress in their relationships, and 54% say that having a partner who is in debt is a big reason to think about getting a divorce.
A study by Credit Karma found that more than half of millennials in relationships agree that they don’t want to get married until their finances are in order. Additionally, 71% of those surveyed say it’s at least somewhat important that their partner’s finances be in order before they get married.
As such, though it may not be the cause, debt can certainly be a catalyst for ruining your relationship.
7 Tips to Get Out of Couples Debt Together
1. Open communication.
Start talking about the debt in an open and honest way.
Be kind, accepting, and don’t judge anyone during the conversation. Get your partner to talk about how they feel and what worries them about the debt.
2. Set goals together.
Talk about and agree on your financial goals as a couple.
Goals for the short term, like paying off debt, and goals for the long term, like saving money or investing it. Setting common goals helps people work together.
3. Develop a plan.
Work together to create a realistic plan to tackle the debt.
This could involve budgeting, prioritizing high-interest debts, or seeking professional financial advice.
4. Explore additional income sources.
Explore opportunities for additional income, such as a side hustle or part-time work, to expedite debt repayment and ease financial strain.
5. Explore debt repayment strategies.
Consider different debt repayment strategies together, such as the debt snowball method (paying off smaller debts first) or the avalanche method (paying off debts with the highest interest rates first).
6. Combine finances strategically.
Figure out whether keeping different accounts or combining your money into one joint account is better for managing your debt and expenses.
One of you may have a line of credit with a lower interest rate than the other, for example. It may make sense to consolidate debt into one account until you pay it off.
7. Financial transparency.
Encourage your partner to be open about money in your relationship.
Talk about money often, keep track of your spending, and make choices about money as a team.
Bonus tips
Support and encouragement.
Show your support and guidance through the process. Dealing with debt can be stressful, and having a partner who is there for you can make a big difference.
Celebrate milestones.
Enjoy the little wins along the way. Sticking to a budget or paying off some of your debt can be reasons to celebrate and push you to make even more progress.
Will my partner’s debt affect me?
Lots of people are scared to think about whether they are responsible for their partner’s bills.
Most of the time, you can only be responsible for debts that are in your name or jointly held in your name. This means that if you share a credit card or bank account with an overdraft, you should check the amount often.
You and your partner are both responsible for bills, so you don’t just owe half of the money. If the creditor can’t get the money from the other account holder, they can demand that you pay the whole amount.
If you’ve lived in the house for a while, you may be responsible for some home bills. But for the most part, your partner is still responsible for debts that are in their name.
However, if you share a mortgage and your partner is filing for bankruptcy, it can make things less stable for you. Even still, you should be able to keep your share of any property wealth.
Am I responsible for my partner’s debts?
If they borrowed money in their own name, you won’t have to pay it back.
If you and your partner take out joint debt, however, you may be responsible if they can’t pay back what they owe.
How to Find Out if Your Partner is in Debt
About two in five millennials (42%) say transparency about their partners’ finances is key to a healthy relationship. This means that financial transparency, among other things, is a huge consideration for (young) people who want to settle down.
But what if your partner is cheating on you financially by not telling you the true state of their finances or debt?
Here are some clear signs that your partner is having trouble with debt:
- receiving collection letters or phone calls (Here’s the part where I remind everyone that you really shouldn’t be going through someone else’s mail)
- spending doesn’t match income
- becoming evasive about finances
- continually asking to borrow money
How to Help Your Partner Get Out of Debt
There are a lot of reasons why people borrow money. Being in debt isn’t a bad thing if your partner is good at handling their debt.
But you should find out if they are having trouble and what can be done to make sure they don’t miss payments.
You may want to ask:
- how much do they still owe?
- how long have they owed this money?
- how are they going to repay the debt?
- has it affected their credit score?
If they need help, there are some solutions you can consider to help get your partner out of debt. These include:
- Assist in creating a repayment plan. Collaborate to develop a plan for paying off debt. Set priorities for your debts and create a methodical plan to pay them off in full using strategies such as the debt avalanche, fireball or snowball methods.
- Encourage financial accountability. Hold your partner accountable for their finances. create a budget to track debt payments. You can also offer guidance on managing spending habits and staying within the budget.
- Educate. Share resources, articles, or books on financial literacy to expand their knowledge base.
- Seek professional help. If needed, consider seeking guidance from a financial advisor.
Couples Debt: Final Thoughts
There are a lot of emotions associated with money and debt.
Having excessive debt can control and restrict your life. If left unmanaged, it could affect your relationship negatively.
Yet regardless of the situation, overcoming the hurdles of debt as a couple can be achieved if both of you are persistent and determined. By communicating openly, holding yourselves accountable, and being patient with one another, you can maintain a healthy relationship and resolve your debt issues.