This post is by our regular Wednesday contributor, Erin.
Are you in a relationship, or considering being in a relationship, with someone who has debt? Maybe more debt than you have? Or are you the one with the overwhelming amount of debt?
Either case is tricky to navigate. A lot of people aren’t comfortable with the burden that debt brings, and it’s easy to feel ashamed, scared, or alarmed when debt in a relationship comes up.
However, considering money is often the source of arguments (and divorce) in relationships, it’s important to think about and discuss the repercussions debt can have.
If you’re in a relationship (or going to be) and you’re worried about how debt may affect it, here’s how to handle it.
What Type of Debt Are We Talking About?
First things first – obviously, not all debt is equal, at least when it comes to how it was incurred.
Student loan debt isn’t a “chronic” debt – you’re not trying to spend your way into the negative by getting yourself an education. You might take out loans once or twice if you’re going for an advanced degree, but that’s it.
Consumer debt, on the other hand, may be more problematic, depending on the extent of it. Maybe you have trouble keeping your spending in check, or you can’t save enough money for your expenses.
And medical debt? I don’t think anyone is trying to land themselves in the hospital constantly.
There are other types of debt and loans, too. Mortgages are fairly run of the mill…unless someone is house poor.
The type of debt your partner is in is extremely important to take into consideration, as each tell different stories.
For example, consumer debt usually has an underlying cause that needs to be addressed. Not so much with student loan debt. You need to get to the root of the issue in order to devise a strategy.
In Any Situation
Context matters when dealing with debt. Before we get to the big points, here are a few questions you should ask:
- What’s the total amount of debt?
- How is your partner currently handling it?
- Do they expect the situation to change?
- Is it an ongoing source of debt, or a one-time thing?
You can flip these around and offer explanations if you’re the one in debt, too.
Debt Considerations When You’re Just Dating
Okay, so you’re with someone, but you’re not super serious. It still pays to think about what you’re willing to deal with as far as debt goes. Is too much debt a deal breaker for you? When should you start discussing financial matters?
Of course, the answer is, it depends on your relationship. My fiancé and I were very upfront about our student loan debt, mostly because he had just graduated and I was set to graduate the following semester.
Thankfully, our amounts weren’t overwhelming, and I admit that made it easier to talk about. If you’re in six-figures of student loan debt, or a decent amount of consumer debt, you might be afraid to tell potential partners about it.
If you want to experience financial success together in the future, you need to know the details of each other’s financial situation.
Again, this is circumstantial, but I wouldn’t wait until you’re getting serious and moving in together to talk about your debt.
Look at it this way – a relationship is an investment of your time and energy. There are stories out there of couples breaking off engagements because their debt didn’t come out until months before the wedding. Do you really want that to happen?
In my opinion, sooner is better than later. At least within the first year of dating. Also, please know your actual debt total. Don’t lie about it, or hide from it. You can’t create a plan without this knowledge.
How to Handle Debt When You’re Engaged
I strongly believe you need to reveal all about your finances and be on the same page before getting married. That doesn’t just include numbers, either – you should know what each other’s financial beliefs and values are, too.
If you and your partner can’t be forthcoming about your debts (or other financials), there’s a problem. Communication is key in any relationship, whether you’re in debt or not.
By this stage, it’s smart to have discussed everything and you should have a plan for any debt either of you have.
Figure out how you’re going to pay back your debt, too. Some couples prefer to continue paying back their debt using just their income, and other couples view all debt as joint once married. Do what works for your relationship.
How to Handle Debt When You’re Married
Unfortunately, money is one of the biggest causes of divorce.
Whether your spouse has been hiding debt, didn’t realize how bad their debt was, or you both want to turn over a new leaf and get serious about your debt, you need to know how to handle it.
If there was a breach of trust involved (your partner directly lied about his/her debt when you asked), there’s a bigger issue here. You might benefit from counseling.
If there was just a misunderstanding and you can forgive your spouse, then these are the following steps you should consider taking.
(Divorce should, of course, be a last resort. Try to exhaust all your other options and work through it together.)
Possible Solutions to Handling Debt in a Relationship
Has your spouse agreed action needs to be taken? Consider meeting with a financial advisor – third parties can give a different perspective. It might be helpful for your partner to hear the reality of the situation from someone else, especially an expert.
The worst thing you can do when talking with your partner is to make them feel bad, guilty, or ashamed. I know it’s cliche, but you need to have a “no judgment zone” when discussing debt with your significant other.
They could very well know they’re mismanaging their money, but aren’t motivated to fix anything. Perhaps they don’t know where to start. If your partner says they need help, offer it! Just don’t force it on them. There’s a difference.
Do you and your spouse have polar opposite financial habits? Then ask where they’re coming from. Try to be empathetic. Don’t simply dismiss them – their thoughts, feelings, and concerns are just as valid as yours.
After all, you’re in this together, whether you’re married or not. You and your significant other should always work as a team, and that means supporting each other, even when you might not fully understand them.
While you might be frustrated with the lack of good financial decisions on their part, they might be equally frustrated with their behavior and your reactions toward them.
Two wrongs don’t make a right, and if you’re constantly nagging your partner or making them feel bad, they’re not going to be very motivated to make a change.
___________________
Overall, you need to listen with an open mind and figure out what can be done to better your financial situation. There’s a lot of value in being financially compatible with someone, but people can change.
However, some people don’t – no matter how hard you try. If you’re not married, figure out where the line is drawn when it comes to debt and what kind of effort needs to be made.
How has debt affected your relationship (if at all)? Is debt a deal breaker for you in any way? What advice would you give to couples in debt?
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It is so important to talk about finances and debt in a relationship. My boyfriend and I got on the same page about money fairly early on in our relationship. We’re open about our financial situations and we both understand where the other is coming from. Communicating about money can be hard but it is essential to a healthy relationship.
So important to have open lines of communication about finances in general and understand in a relationship its a give and take approach that works best.
I feel fortunate that my husband and I have similar ideas on financial issues! We paid off our debts together and forged ahead. Now we are both committed to building wealth instead of buying stuff.
I think being open and real about what debt you may have is the most important thing to start out with. If you don’t have that then you don’t have a good foundation. I brought some debt into the marriage, but was already on the path of paying it off and my wife was very supportive so it wasn’t that big of an issue at all.
Very interesting topic! My husband actually had both student loan debt as well as consumer debt when we started dating. Luckily he was extremely motivated to pay it off, otherwise I’m not sure that I could have married him to be honest! It could have been a dealbreaker, because I’m not someone who would want to live with that kind of debt hanging over me for years and years. We’ve paid off his consumer debt in entirety, but the student loans are still there. Slowly but surely we’re getting there!
It wouldn’t be a deal breaker for me, but it would be somethign I’d have to factor in like everything else, especially if it was consumer debt. Overall though it’s about the “whole” person an the values that they have, and how in line they are with mine.
I’m lucky in that my wife and I are very “debt averse”. We both prioritize eliminating debt and not leveraging credit (with the exception of our home). Beyond debt, one thing I’ve noticed when it comes to marriage and finances is that everyone has different perspectives regarding money and spending. No matter how in sync you are with your partner everyone places a different value on certain things and you won’t always agree on money matters. Like everything else in a relationship it’s all about compromise.
Debt hasn’t affected my relationship. I wouldn’t date someone irresponsible enough to rack up thousands of dollars in credit card debt, since we wouldn’t be compatible. Or someone who spends 100% of what they make. Just too different to co-exist.
Ali_AnythingYouWant Completely agree! Glad to hear that you and your boyfriend were able to discuss everything early on.
DebtDiscipline Yes, communicating is absolutely necessary – one-sided conversations don’t get you anywhere!
Holly at ClubThrifty It’s so much easier to build a life together when you’re on the same page, especially when it comes to how you spend your money and what you want your future to look like.
FrugalRules Yep, having a solid foundation of trust and communication is required to have a good relationship! If someone is already dedicated to paying their debt off, I think it’s a smaller issue (if it even is one).
Christina@EmbracingSimple That’s good to hear! It’s definitely harder to juggle student loans along with consumer debt. I had an ex with both and he didn’t really care about paying ether off at an accelerated pace. He lived paycheck to paycheck and it didn’t really sit well with me, but I was younger and not as focused on my financial future as I am now!
Beachbudget Values are really important to be on the same page about. I think everything comes easier if that’s the case – especially when it comes to making the bigger decisions in life.
Financial Tour Guide Very true! My fiancé and I do have differing values on some things (he’s more of a spender than I am, but still within reason) and it’s caused friction at times. Being able to compromise is key!
ferventfinance Thanks for your honesty on the situation – I’m very sure you’re not the only one. I’m willing to give people second chances, especially those that learn from their mistakes, but someone who doesn’t think debt is a big deal would be a tough pill to swallow.
My husband and I are quite the team – we racked up a lot of debt together, and now we’re fighting together to pay off that debt. Compatibility is the key. Fortunately for us, both of our priorities changed at the same time.
Harmony@CreatingMyKaleidoscope That’s awesome! It can be really tough when one half wants to get out, and the other doesn’t care as much. It’s so much easier to work as a team.
LOVE this, Erin! What I like most about it isn’t the particulars but instead the fact that it’s bringing attention that it is in fat an issue that you need to think about and consider.
Financegirl I’m glad you liked it! I could have gone a bit more in-depth but debt is such a personal issue – it’s different for everyone. Just stopping to think about it and the problems it can present in a relationship is a good idea that a lot of people skip over (since they think debt is normal).
This is such a great topic. My bf and I both have debt and we are very open about it. I know how much he has and I announce my debt numbers publicly on my blog so probably everyone knows my situation :) We have talked about marriage and while I’m trying to pay off my debt asap, he is definitely moving slower and I’m okay with that. He has less debt than me and it seems very controllable, but I’m not sure how I’d feel if he had a large amount like six figures or something. Communicating and being open with your partner along with creating a detailed debt payoff plan can eliminate a lot of stress and confusion within the relationship.
Chonce That’s great, Chonce! I know it depends on the situation, but overall, I don’t think there’s many good reasons to rush into marriage, especially if there is some debt involved. Supporting each other is so important!
My husband and I were financial opposites. He came to the relationship with about $20,000 in defaulted student loans. He thought he’d never get past them. His health problems kept him from holding a steady job. Meanwhile, he knew he’d never have enough, so he just spent his money as soon as it came in.
His attitude was endemic to where he grew up. Everyone there spent like that. They never expected to get ahead, so it was a self-fulfilling prophecy. That plus his ADD, and it was pretty easy to understand his point of view.
We got engaged quickly, so I put us on a road to serious repayment. It
took a lot of work, a lot of time (I was on disability and 2 years, he
was on unemployment) and quite a few fights. But we eventually paid the loans — and a bunch of medical debt we accrued along the way — off.
AbigailP I love your story, Abigail – it’s a powerful one. Hearing about couples overcoming the odds together is always nice. It can be so difficult to get your spouse on the same page; I don’t doubt it was a lot of work, but at least it paid off in the end.
I’ve seen the self-fulfilling prophecy play out more than once. We often live by what we know and grow up with, especially where financial habits are concerned. It’s easy to think that because your family couldn’t keep their head above the water, that that’s what will happen to you.
This post just reminded me of my parents. I think I mentioned this already on one of your previous posts, but seriously, my parents were on the completely opposite sides of the financial responsibility spectrum. My mom is the most frugal person I know, while my dad absolutely has zero considerations about budgets or spending. This is exactly why I had a serious talk with my Fiance (before we got engaged) to talk about his student loans, his debt repayment plan, and how we can responsibly manage our budget on a single income since he’s currently a grad student. Debt clearly wasn’t a deal breaker for me – but it’s so so so important to talk about these things before you’re really involved with them.
Anum Exactly, and glad to know I’m not alone. Watching my parents struggle with debt and money management wasn’t fun, either, and I think that had an influence for me as well. Thankfully, it was also very easy to talk about money with my fiancé because we grew up in similar situations, so there wasn’t really any need for judgement or explanation.
Jim and I didn’t have any debt other than student loans when we got married. We ran up our debt together, which is pretty bad, but we paid it off together too. Not the best idea of how to spend your time as a married couple, but it did teach us many valuable lessons about what is truly important in life. It’s much better to figure that out before walking down the aisle but better late than never!
When Mrs. Done by Forty and I were dating, she had to learn to deal with my debt: student loans and credit card debt. The latter was indicative of really bad financial habits. Still, she taught me about this weird thing called “saving” and I was a quick study.
It’s all in the rear view mirror now but, like you noted, some open and candid communication about an uncomfortable subject goes a long way.
Eyesonthedollar Paying off debt together does teach you a lot of lessons – I think it’s a little easier going through it together since you can be a good support system for each other.
DonebyForty Haha, that’s great she was able to teach you better financial habits. I’ve been there, but unfortunately teaching can only go so far. Sometimes people aren’t too interested in learning.
It’s so crucial to be on the same money-page BEFORE you get married. My fiance and I both have debt, and we’re both very clear how we’re going to pay it off (separately and on a timeline). Sure, I get jealous sometimes that he’ll have his debt paid off in a year, and I’ll still be (optimistically) 8 years out, but that’s life. He bought a house, I got a Master’s… he got the better deal. ;)
sunburntsaver Haha. I agree that everything needs to be known before marriage. My fiancé has been more steadfast in paying off his debt (he didn’t believe in saving as much before we merged our finances), but my savings did allow us to relocate without any worries, so it evened out.