When you marry your spouse, you’re merging lives. You’ll need to make room in yours for their books and furniture, sure, but also their family, maybe their pet — and, more often than not, their debt. In fact, seven out of 10 Americans enter into marriage with debt, according to debt.org.
To make matters worse, those first few years of wedded bliss are when you’ll most likely be racking up even more debt — between the wedding, a honeymoon, purchasing a home, furnishing your new love nest, and possibly expanding on your duo.
Whether you’re just starting out in a relationship or have been married for decades, debt can put stress on both of you individually and on your marriage. And as you may have already discovered the hard way, stress from being in debt can often lead to arguments, feelings of resentment, anger, and blame, and can really take a toll on your time together. The trouble is that, as a report by Wells Fargo concluded, many people consider money a tougher topic to discuss than even politics or religion.
Regardless of where you are in your relationship, it’s always a good time to sit down and have an open conversation about debt. Before you do, here are some things you should know about marriage and debt.
How Can I Keep Debt Issues From Taking a Toll on My Marriage?
If you’re engaged or otherwise on a path toward marriage, there’s no better time than now to discuss money with your future partner. Having a productive, honest conversation about your debt or that of your partner is the only way you’re going to tackle it and avoid future issues — and adding even more debt to your lives.
Besides the actual debt itself, if you’re creating a life together, you’ll want to share your financial goals with each other and determine how money is going to work in your home. It’s important to start out on the same page but, shockingly, 40% of couples said they didn’t discuss money with their partner before getting married, according to Country Financial.
Even if you’re among the 40% who let the financial discussion ship sail by during your courtship or engagement, it’s not too late to sit down and determine how finances are going to be handled in your home from this point on. This is especially important if you do indeed have debt and are ready to start paying it down.
Approach every conversation about money with patience and preparation. If you have separate finances right now, take time for each of you to get on paper exactly what you’re working with. Here are some jumping-off points to start the discussion with your partner. Each situation and relationship is different, so you’ll need to use your best judgment about what will work for you:
- How much student loan debt do you each have? What types of loans are these and what are their interest rates? If they’re federal loans, are either of you considering some type of student loan forgiveness plan to help alleviate some of the burden?
- How many credit cards do you have? What are the credit card balances and interest rates?
- Are you going to combine your accounts? If not, who will be be responsible for paying what?
- Who is responsible for physically paying the bills? Whether you pay online or stuff a check in an envelope and lick a stamp, this takes time and consistency from month to month. Will it be a task you both share?
- How are you going to handle day-to-day money issues? For example, do you need to both agree on any purchases over a certain amount of money? Professor of counseling and family therapy Charles Schmitz told Forbes that he and his wife don’t make purchases over $200 without talking about them first. Schmitz believes that joint financial decisions are essential ingredients for a happy marriage.
- Are you going to stick to a budget? If so, what will your money be going to?
- What are your financial goals? How are you going to save for retirement? What are big purchases you would like to make (e.g., a home, boat, graduate school, European vacation), and how do you plan on saving for these purchases? If you have children, are you going to be saving for your child’s college education?
- If either of you is in debt, how do you plan to start repaying it? Get on the same page — which debts do you want to pay down first? Who should pay toward what? Then formulate a plan of attack.
- What are the bad financial habits you want to break? If you’re accruing late payments, overspending, not saving, or not keeping track of where your money is going, help each other break those bad money behaviors.
Will My Spouse’s Debt Affect Me? Does My Debt Affect My Spouse?
There’s no simple yes or no answer to these questions. Your credit histories remain separate, even after you marry. So if you had a rocky past that landed you with a lot of debt and a bad credit score, it doesn’t mean that your spouse will now have a poor credit score as well. But any debt you accrue once you’re married is now considered joint debt.
However, what you’re responsible for varies by state. In most states, you’re generally responsible for only the debt that is in your name, which is called common law, according to legal site Nolo.com. But in community property states, you can be held responsible for your spouse’s debt. These states include: Arizona, California, Idaho, Louisiana, Nevada, Texas, Washington, Wisconsin, the territory of Puerto Rico, and Alaska (only if opting into a community property status).
But once you start opening joint accounts, co-signing loans and purchases, and adding each other as authorized users on your accounts, your spouse’s finances and behavior will indeed affect your credit.
What Should I Do if One of Us Has a Lot of Debt?
Even the thought about talking about money, especially debt, can cause anxiety. Twenty-seven percent of couples surveyed by the American Institute of CPAs cited money as the issue to most likely prompt an argument.
Even though it can be a stressful situation — especially if one of you is dealing with debt while the other is debt-free — the quickest and healthiest way to overcome the issue is to work through it.
If you’re the one with debt, be honest with your partner. Explain the debt, along with how you plan to rectify the situation.
If you learn that your potential spouse has debt, be supportive. It’s easy to start to feel resentment or anger, especially if you’ve been diligently saving. But it’s best to figure out what mistakes were made so you can avoid them in the future and focus on what can be done now.
Either way, you may want to wait to make big purchases together if one of you has a lot of debt. You also may want to consider applying for credit on your own. Just because you’re married doesn’t mean you need to apply for credit jointly. Wells Fargo points out that this a common misconception about marriage and money. In fact, when you both apply for a loan, a less than desirable credit score from one of you can likely result in a higher interest rate.
How to Make It Through the Debt
Odds are that you’ve heard those pretty depressing statistics — how 45% of marriages end in divorce, according to Rutgers University professor David Popenoe. And yes, the number one cause of divorce is financial disagreements, according to Charles and Elizabeth Schmitz, co-authors of “Building a Love that Lasts: The Seven Secrets of Successful Marriage.”
However, whether you accumulated the debt on your own prior to meeting your spouse, or it piled up throughout your marriage, this debt doesn’t have to result in a stressful marriage or divorce. Here’s how you can work through this debt together:
Communicate regularly. A whopping 55% of couples don’t set aside time to speak about financial issues on a regular basis. How can you know what’s going on if you’re not talking about it? The National CPA Financial Literacy Commission recommends setting aside time each week to talk about the family finances. Having a specified time to talk about what’s going on and make a game plan will likely reduce money arguments from seeping in out of nowhere.
Think before you speak. You’ve probably heard the saying, “It’s not what you say, it’s how you say it.” Well, keep this in mind when you’re talking about money. Avoid saying things out of anger, or statements that could be perceived as blame. Financial matters spark an average of three arguments per month, according to the American Institute of CPAs, so it’s a loaded topic already — no need to fan the flames.
Give full disclosure. Be honest about what you’re up against. It’s the first step to getting through this debt and can help eliminate future stressful surprises.
Be a team. When you get married, you become a team. If you’re thrust into dealing with your partner’s debt, it’s not uncommon to blame or resent them for their spending habits, not earning enough money, or mismanaging money in other ways. But the best way out is to team up. Create a budget together, keep joint accounts, make a game plan together, and help each other stick to it.
Don’t lie. A quarter of married people admit to making purchases they don’t want their spouse to find out about, according to Time. Once you lie about money, the problem becomes much bigger than just about money: It’s about trust, loyalty, and whether you’re a responsible partner.
Get on the same page. Sixty percent of couples surveyed in an American Institute of CPA study said they usually argue over different views of what constitutes a “want” or a “need”. Once you establish a budget and a debt repayment strategy, you’ll want to discuss what exactly you’re spending money on, in detail. Saying you’re going to spend X dollars on food doesn’t quite cut it. To you, “food” may mean essential groceries, while your partner’s definition of “food” might include the basics plus dinner out with friends a few nights a week.
Hit the reset button. Anytime you’re faced with a rough situation, such as dealing with debt, it can really make you or break you. Instead of getting frustrated, feeling guilty about your debt, or resenting your spouse, focus on what you can learn from this situation.
Maybe there was too much of an emphasis on your “stuff” rather than on each other? A Brigham Young University study concluded that couples are more likely to have marital problems if one or both partners are materialistic.
What financial mistakes did you make as an individual? What have you done wrong as a couple? Ironically, one problem some couples face is spending too much on expressions of love for each other, whether on vacations together, expensive gifts, or overpaying for a home, according to WebMD.
Don’t let this debt be the number one issue in your marriage. Just because you’re dealing with debt doesn’t mean you should stop having fun together.
Just like it is important to take time to discuss your finances, also take time to not talk about money. Find free or cheap things you can do together to reduce stress and enjoy your marriage. If you’re still doing things you enjoy and having fun together, you’re more likely to stay on track with your debt repayment plan anyways.