Dealing With Personal Debts In Relationships
Debt is a sure cause for many marriage break-ups. Almost 80% of the divorced couples mention financial troubles as one of the major causes. This is according to information published on The Dollar Stretcher. However, despite the gravity of debt in a relationship, you can follow these tips on how to avoid relationship debt and escape the stress of owing people money.
Set your expectations as a couple
It’s no secret that debt brings a negative impact on your relationship. The stress of owing people money leads to less happiness and satisfaction in your marriage. By learning how to avoid relationship debt, you can have a fulfilling and happier marriage.
The first step in controlling debt in your marriage is to resolve as a couple and set expectations. For example, have common prospects on lifestyle and on how you want to spend money. Hidden debts will obviously lead to lack of trust and unfaithfulness between you and your partner.
In your resolution to set expectations for your finances, you can address the following questions:
- What should spend money on? Consider what is essential and what is optional.
- Which expenses will you share and which expenses will each partner account for individually?
- Which financial accounts will you own together and which ones will you own separately?
- Who will actually pay the bills?
- How will you handle debt that came into your relationship?
- How will you contribute in case of disparities in income?
The right answers to these questions can set a basis for understanding debt and relationships, especially when you set your expectations as a couple.
Plan for your future together
They say failing to plan is planning to fail. In the spheres of debt and relationships, the phrase is true as well. Planning for your future together can help you avoid hidden debt in your relationship. While you have no idea what the future holds, it is important to consult and map out your plans regarding investments, future purchases, and overall progress of your relationship. In planning your future together, the key questions to address include:
- How will you buy a house?
- How will you buy cars?
- What are your expectations for retirement?
- How often will you go for holidays?
- How will you save for your children’s college education?
With these questions in mind, you can easily set aside finances to meet your plans. This list can open your eyes to what you and your partner need in your relationship. Having a plan for your future and sticking with that plan may feel bitter now, when every bit of your money goes to a given area. However, it pays in the long run and teaches you how to avoid relationship debt.
Have a budget to follow
Spending money without a budget is one way that leads to impulse buying. This can easily cause hidden debts in relationships. Having a budget helps you deal with numbers and determine what you have to spend. In coming up with a budget, here are the key aspects to address:
- Income: this can come from various sources including salary, business, investments, or property
- Assets: these may be bank accounts, property, or other investments
- Debts: these may accrue from mortgages, credit cards, or loans
- Expenses: these may come from food, utilities, rent or mortgages, clothing, insurance, transportation, travel, entertainment, and any other expenditure you can make.
Follow the budget for about three months and assess how it’s working. If there are areas that you should adjust, sit down together and identify them. This is important especially if you are already in debt. Openness and action plan are two important strategies to implement on how to avoid relationship debt.
Find a way to come out of debt
If you don’t find a way to come out of it, you will never come out of debt. This may be a daunting step for a couple. It requires honesty, patience, and being ready to compromise. If you sail through this step, you will have passed the hardest test in debt and relationships. To that end, specific lessons are evident:
- Do nothing to add to the debt you already have
- Find a way to live on less, cut expenses, and use the saved amount to pay off the debt
- Set a deadline by which to clear a debt item, starting with that with the highest interest rate. Calculate the amount you need to put aside each month to clear based on the deadline.
Finally, it is important to understand your partner’s mindset about money. Look for online resources regarding money such as Debt Mediators, where you can find relevant information on how to avoid relationship debt.
Getting out of debt requires commitment, openness, and putting strategies into action. If you are struggling with how to avoid relationship debt, here are smart ways you can execute to save your marriage.