Debt Confessions: Relationships and Your Debt LoadFeb 14, 2018
Keeping secrets about debt load in a relationship is happening more frequently than you might think. The impact of financial stress on a relationship can be devastating, but we do know that talking openly and honestly with your partner about debt problems and other issues can have a positive impact on finding solutions.
Let’s dive into some of the findings from a recent BDO poll about relationships and debt:
- Roughly, 82 per cent of couples have had some sort of conversation related to their debt load and finances at some point in their relationship.
- Millennials are the most likely to have these conversations compared to Gen Xers and Baby Boomers.
- Men are more likely to admire their partner’s budgeting and financial skills compared to the woman in the relationship.
- The most common type of debt that is hidden or lied about is credit card debt.
- Those with large amounts of debt are the least likely to talk about the financial problems they face.
What steps can you take as a couple to address consumer debt problems at home?
Taking action on debt problems always begins with a conversation with your partner. If you can talk honestly about the financial challenges you face as a couple it will be much easier to work towards finding a solution.
Here is a list of steps to get you started on reducing your debt load in a relationship:
- Have regular discussions to talk debt and finances, the frequency will depend on a variety of factors but a good starting point is bi-weekly or monthly.
- Establish financial goals you both want to work towards including reducing debt, saving for retirement and emergencies, etc.
- Grow your knowledge on how to effectively pay off debt; Money We Have has a great blog article on this topic.
- Track your purchases with a mobile apps like Mint or Wally to help both of you identify where you might be able to improve your spending habits.
Does my debt impact my partner’s credit rating?
The impact that debt has on you and your partner is important to know because it can put strain on a relationship. Whether you handle your finances separately or together, make a list of all the debt between you and highlight any debts where you are co-borrowers, such as a mortgage, car loan, or if you share a credit card. Those debts will affect both of your credit ratings should there be any late or missed payments. However, any debts that you carry individually (where only your name is on it) will not impact the other individual’s credit rating.
A Licensed Insolvency Trustee (LIT) is the only professional who can perform these debt relief options and would explain in detail the impact it may have on a partner’s situation before moving forward. If you have joint debts, and only one of you is filing a proposal or bankruptcy, the other may become solely responsible for those debts.
Having a free initial consultation with a LIT is a great way to get some information about the best debt relief options available to you and your partner.