Money is one of the most common stressors in a relationship. Discussing finances can be difficult in a relationship but here are some ways to help start the conversation and work out a plan towards being a debt-free couple.
1. Be upfront, early on. Having the money talk can be stressful but it is necessary to have as a couple. Sit down together and talk about everything including income, outstanding loans and whether you’re able to make progress toward paying down your debt. After talking make a budget. If you are sharing balance sheet, you should factor in debt payments, where you live, how often to dine out, and where you can vacation.
2. Learn the law. You are not responsible for debts before marriage by there are some cases you may be liable for your partner’s balances. As a rule of thumb, if your name is on the form, consider yourself liable. Know where the law stands, and consult with a financial adviser to make sure you’re fully prepared.
3. Have yours, mine and ours finances. While every couple believes they are the exception, it never hurts to have prepared for the possibility that you will need to separate your finances. Typically, it is a good idea to have separate bank accounts as well as joint ones, just in case.
4. Factor debt into your plans. When planning for the future, don’t forget to pay off any debt. A large load of debt can hurt your chances of getting a mortgage, what you can afford, and even how to pay for your kid’s college. Be realistic when setting expectations for your life going forward.
5. Lower the amount you’ll pay on your debts. This sounds like a no-brainer, but it is important to take steps to reduce the amount you will actually pay. This can be a balance transfer, refinancing and looking into student loan consolidation. Keep in mind that some of these options may cost more than they save. Take into account fees and taxes when considering options.
6. Remember you’re in it together. Finally, don’t let the talk of money come between you. No matter your financial plan, you are still together. If your partner’s finances are not necessary in shape, be supportive and kind. If you are bringing debt, remember you still have to contribute to the relationship. With some planning and focus, you should be able to weather the debt storm.
For more information on financial planning, contact a Wealth Advisor at iWealth Global Management. You can reach us at 813-321-1572 or by email at email@example.com.
Source: Sekar, Anisha. "6 Tips for Tackling Debt as a Couple - DailyFinance." DailyFinance.com. N.p., 11 Feb. 2014. Web.