Buzz
Seventy percent of couples enter marriage with debt, often from student loans and credit card balances, according to CNBC. A recent NerdWallet report revealed that 2018 college graduates had an average student loan debt of $29,200, while Experian reported an average credit card debt of $6,194 in 2019.
However, many couples find it difficult to talk about their debts. A recent survey by CreditCards.com showed that 12% of people have hidden their debt from their partner. Money coach Cally Ingebritson, who works with LGBTQIA+ clients at Chillax Finance, explains that debt carries a lot of shame and silence. People may shy away from the topic due to fear of judgment or the potential for conflict.
But for newlyweds, it’s vital to address these issues—even when they feel awkward—since it can affect your shared financial future. Here are some strategies to have this conversation and create a plan to tackle debt together.
Discuss Your Core Values
If you're hesitant to confront debt, Ingebritson recommends starting by reflecting on your values, the financial lessons you learned growing up, and how they might shape your current financial situation. For instance, your family’s economic background may have influenced the amount of student loan debt you carry. “People often have ‘aha’ moments that can help ease the tension around their situation,” she explains.
Be Transparent About the Numbers
This might be the toughest part: Be transparent about your debt figures. “A good old spreadsheet works wonders,” says Ingebritson. You can use a spreadsheet to organize each debt, including its interest rates. By laying everything out, it can help facilitate the conversation about next steps.
No matter where the debt originated, Ingebritson reminds us that debt does not define you, your partner, or your shared future. “You're in this relationship together, and this is just one chapter of your life,” she emphasizes.
Create a Plan to Achieve Your Financial Goals
After sharing your debt details, it's time to discuss a strategy for paying it off. Depending on your circumstances, you can decide whether to handle the debt individually or as a couple. Ingebritson notes there’s no definitive right or wrong choice.
When considering debt repayment methods, there are several common strategies. You might try the debt snowball, which targets the smallest debts first. Alternatively, you can use the debt avalanche, which focuses on paying off high-interest debts first. The debt blizzard combines both methods for a more comprehensive approach.
Regardless of the amount of debt, Ingebritson assures that progress is possible, and with time, you can improve your financial situation.
Harness the Power of Automation
A highly effective way to achieve your financial goals—no matter which repayment method you choose—is by harnessing the power of automation. Ingebritson recommends setting up separate accounts for bills, debt, savings, and spending money.
“One of my best tips is to check if your employer offers split-direct deposit, as many employers today allow you to divide your paycheck into multiple accounts,” she advises.
Shift Your Perspective on Debt
When dealing with debt, it's easy to fall into feelings of shame, but Ingebritson suggests that it can actually be an opportunity to strengthen your relationship. Achieving financial goals together can create stronger bonds, making it easier to face future challenges. “In the end, managing money as a couple is a form of intimacy,” she shares.
