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How to Reduce Debt as a Couple

When you’re in a relationship, a lot of things that were once yours, or theirs, become ours. But when it comes to finances, the conversion isn’t so clear. Sometimes, it makes sense to share expenses and debts and contribute to savings together. Other times, the responsibility isn’t necessarily a shared one. And if you have debt that you brought to the relationship, or accumulated on your own, how you reduce it and if your partner contributes might require some thought.

When you live together, there are certain expenses that are naturally better shared, since determining utility consumption rates or mortgage shares can be pretty difficult (for some couples it’s already hard to understand why those costs are so high).

But what about other expenses, like debts that are accumulated independently of one another? If you came to your relationship with debt, and those debts affect your ability to contribute to your shared financial goals like saving for a down payment or a family, it can be a hard pill to swallow for your partner. And unfortunately, a lot of Canadians aren’t openly discussing debt and personal finances before they begin living together or get married, even though they think it’s important.

Talking about finances with your partner

If you have debt, you’ll need to discuss it with your partner. One way or another, it’s likely to come up, especially if it impacts your personal or joint financial health.

Even though the debt conversation can be a difficult one to initiate, talking about money regularly with your partner is a good way to manage expectations, make decisions about saving, spending, and debt, and develop mutual goals. Once you’ve started the money conversation try to make an effort to have meetings a few times a year.

How to reduce debt

For debts that you accumulate as a couple, the decision about how to reduce it should be both of yours. How you decide to divide up the responsibility for debt repayment, however, might not be exactly 50/50.

For couples whose incomes are quite different, debt repayment (and general bill payment) might be better handled through proportional splitting. For lower income earners, this can reduce some financial stress.

When it comes to debts that you either bring to your relationship or accumulate without the knowledge or consent of your partner, deciding how to pay it off may require a more in-depth conversation. Some couples believe that once they live together or are married, “my” debts become “our” debts, and they are willing to eliminate all debt together.

But not everyone agrees. If your partner feels that your debt is yours to pay, you should respect his or her financial boundaries. If you feel that your debt is overwhelming and will impact your personal or combined financial health, be honest about needing help. Your partner may be willing to work together to help you get out of debt if finances allow for that.

Think about other ways to reduce your debt. If you have the time or ability, you might consider taking on more work to pay down your debt. Reducing your monthly spending can free up money to put toward your debt without putting the onus on your partner. If you need more help with your debt, especially high interest debt such as credit cards, look into options like a debt consolidation loan, or a consumer proposal.

Being in a relationship can mean that a lot of things become shared. But when it comes to debt, that isn’t necessarily the case. Discuss how to reduce your debt with your partner and come to a decision that you can both agree on.

How do you split costs as a couple? Tell us about it on Twitter. #LetsTalkDebt, #BDOdebtrelief

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