Once upon a time, talking about money and finances was deemed to be ultra-taboo and a topic best avoided. It’s the very reason I love what I do at The Witch of Wall Street so much, as I get to bring people together to talk and share openly about these once-taboo topics in an ultra-normalized way. That said, the financial topic my clients find most difficult to open up about at first is debt.
Somewhere throughout its financial history, personal debt picked up a degree of shame around it. While debt does reflect decisions made, either for the better or worse, it says zilch, nada, nothing about you as a person. So, let’s delve into what debt really is and how to openly discuss debt with your significant other before walking down the aisle.
The truth about debt
To frame this conversation, let’s get it straight–what exactly is debt– so we can release all the pressure that seems to build up alongside it. Simply put, debt is money owed, which usually comes with interest added on top. Interest is simply the cost of having that debt. It’s not a personality indicator or relationship predictor. The challenges I often see around debt arise when the subject is internalized and blown up to become something bigger than it really is. It’s important to see debt for what it is, but not worse than what it is. When dealt with from this objective, zoomed out point of view, it becomes much easier to both discuss it and find the best strategy to tackle it effectively.
Good debt vs. Bad debt
It’s worth knowing that not all debt is made equal. Good debt refers to debt that was taken out to buy assets – something that is income-producing, for example, an investment property. Bad debt refers to debt used to finance liabilities – these are expense-producing, for example, a loan to purchase a brand new car.
It’s also important to note the interest rate on your debt as it will impact your journey toward financial freedom together. If you have high-interest rate debt – above 7%, for example, credit card debt – then you will want to have this paid down in full before you start investing your money and making it work for you, as you would in the stock market. However, if you have low-interest rate debt, below 7%, you can put your plan in place to pay this down while still investing in your financial future. Know your numbers because they matter a lot!
Understanding debt in relationships
Managing debt solo can be stressful, but when you bring it into a relationship, there can be an added layer of complexity, especially when it’s not your debt but you’re feeling the burden of paying it down.
Bringing up your debt situation with your loved one can be intimidating, especially if it is a large sum and you’re not yet close to having it cleared. That, however, is not a reason to keep it from them. It’s only fair and right as you both enter into your marriage that you are both fully aware of what you are signing up for financially, too. Your worst-case scenario will be waiting until after you say “I do” to share this news with your loved one. It won’t be nearly as hard to do so in advance by comparison.
Equally, receiving unexpected news from your partner that they have this big debt hanging over them can come as a shock and maybe make you rethink things. That said, you don’t want to judge the book by its cover and instead, aim to open up a dialogue to understand why this debt exists.
Some questions to think about asking yourself and/or your future bride or groom-to-be:
- Is it good or bad debt?
- Are you making monthly repayments?
- Do you have a plan to pay this debt down faster?
- What is the impact on your credit score?
- Is this debt a red flag of bad financial behavior?
- Does this impact your future goals and plans together?
- Has this impacted your trust in them or the relationship?
Debt is a common reality for many couples, whether it’s student loans, credit card debt, or other financial obligations. It’s essential to recognize that debt doesn’t define your worth or your relationship – but how you communicate about it and ultimately manage it together will significantly impact your future.
The importance of open communication
Now, let’s talk about why it’s crucial to talk openly about debt before marriage:
1. Building Trust
Open communication about debt fosters trust and transparency in your relationship. It shows that you’re willing to be vulnerable and honest with each other, which lays the groundwork for a strong and trusting partnership. Money dates are a must for your relationship! This is dedicated time where you and your partner get to open up about all things money and personal finances and is the perfect time to bring up debt. Read more about creating your perfect money date here.
2. Setting Expectations
Discussing debt allows you to set realistic expectations and goals for your future together. It’s an opportunity to align your financial priorities, understand each other’s attitudes toward money, and make informed decisions about your shared finances. Disappointment arises from unmet expectations, which so often are unspoken expectations. Be clear from the get-go what each of your financial positions is and what your future aspirations are, too. Whether you like it or not, money will be a big part of your marriage and will determine the type of life you will create together. So get on the same page and set clear expectations from the get-go.
3. Problem-Solving Together
Facing debt as a team allows you to brainstorm solutions, support each other through challenges, and work towards a brighter financial future. It’s a chance to demonstrate your commitment to each other’s well-being and to tackle obstacles head-on as a united front. If you are the one with the debt to discuss, then you may and hopefully will be pleasantly surprised by your partner’s response. Two heads are better than one, as they say, so with the loving support of your partner, you may be able to strategize a plan to become debt-free even faster. If your partner is the one bringing this news to you, see how you can be a supportive partner, either emotionally or financially. Perhaps you decide together to make some cutbacks or savings as your partner is on the journey to becoming debt-free.
The art of the debt conversation
Now, let’s explore some strategies for having the debt conversation with your partner:
1. Choose the Right Time and Place
Pick a time when you’re both relaxed and free from distractions to start the convo. Approach the talk with sensitivity and empathy, recognizing that discussing debt can be emotional for both of you. Again, suppose you haven’t yet made money dates a regular part of your relationship. In that case, starting this practice is a great way to begin opening up dialogue and normalizing conversations around money and finance for you both first.
2. Be Honest and Transparent
Set the tone of transparency and share your own experiences with debt, including how much you owe, the type of debt (e.g., student loans, credit cards), and any challenges you’ve faced. Encourage your partner to do the same and create a judgment-free space for open dialogue. Each of you will have been raised differently around money and hold varying beliefs and even traumas around money, so listen and aim to empathize, not judge.
3. Focus on Solutions
Rather than dwelling on past mistakes or pointing the finger and placing blame, reframe the situation to focus on finding solutions and creating a plan to tackle your debt together. Brainstorm ideas for budgeting, debt repayment strategies, and financial goals that align with your shared values and aspirations. Maybe it’s swapping date nights at expensive restaurants for home-cooked meals or choosing a staycation instead of a trip abroad this year. Be clear on your goal together and find a solution that works for both of you.
The bottom line
Talking openly about debt before marriage may feel daunting, and hearing about it may feel shocking. In either case, it’s an essential step towards building a strong, transparent and resilient relationship, which will lay the groundwork for a bright financial future and life together too. By approaching the conversation with honesty, empathy, and a focus on solutions, you have the opportunity to work together to navigate these financial challenges – one debt confession at a time!
Frequently Asked Questions (FAQs) about talking about debt with your partner
Q: How do we create a plan to tackle debt together?
A: Start by listing all your debts, including balances, interest rates, and minimum monthly payments. Then, explore debt repayment strategies such as the debt snowball or debt avalanche method and create a budget to prioritize debt payments. I discuss debt repayment strategies in more detail here.
Q: Should we merge our finances if one of us has significant debt?
A: It depends on your individual circumstances and comfort level. Some couples choose to keep their finances separate, while others opt for joint accounts and budgets. Discover what the best option is for you here.
Q: What if we disagree on how to manage our debt?
A: Take the time to understand each other’s perspectives and concerns, and work together to find a compromise that aligns with your shared goals and values. Again, your money date is the ideal time to have these open and fruitful conversations.
Laura Tynan is the founder of The Witch of Wall Street, a personal finance and investing community, where women are shown how to manage, multiply and manifest money, using simple strategies. Laura holds a BSc Hons in Finance, is a Chartered Accountant, and is certified in EFT Tapping, Breathwork, and RRT. She has been recognized by the Financial Times as a Top 20 Future Female Leader and by Yahoo! Finance as a Global Champion of Women in Business. She is a multi-award-winning speaker who has spoken at, and been featured in, Forbes. Laura hosts The Witch of Wall Street podcast and is the author of the personal finance and investing book for women, by the same name, which is available now on Amazon.
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