So, you think you’ve found that special someone who’s perfect for you in every way, except one: he or she has a ton of outstanding debt. This happens all the time; two otherwise compatible people are preparing to start a long-term relationship, only to discover that one of them has several student loans and maxed out credit cards. Sometimes, this realization doesn’t come until after the long-term relationship starts; in a recent survey, 50% of the people questioned didn’t even know how much debt their significant other had.
So, what happens if you’re preparing to start a long-term relationship with someone who has significant debts? Here are six things you should know.
1. Open communication
If you’re going to share your life with someone, that sharing should extend to finances as well. You should be entirely candid about any significant debts or assets you have and expect the same from your significant other. Being open and transparent about debt and finances will help you establish trust upfront with your spouse. That trust can help carry you through the rest of your marriage, and it might even save you from arguments later on; after all, married couples fight about money more than anything else.
2. Let’s wait awhile
Imagine if, after you start a serious relationship, your partner confesses to carrying extremely high levels of debt. Well, it’s not the end of the world, especially if you love each other. However, maybe you should both slow down a bit on the wedding plans. Entering into marriage when one partner has serious debt problems can strain your relationship, and it could even lead to other problems. It may be a better idea to postpone marriage plans and then support your partner as he or she works to resolve those debt problems.
3. A fresh start (sort of)
When you do get married, your partner’s debts don’t automatically become yours as well. The only debt you’ll both incur are any loans or credit cards your spouse or you obtain after you get married. However, that doesn’t mean you get an entirely fresh start after you tie the knot; if your spouse or you apply for a loan jointly, any debt your spouse is carrying from before your marriage could definitely affect the loan.
4. Make a budget
Paying down debts and staying out of trouble with creditors should be a top priority for any healthy, happy marriage. One of the best ways to do this as you are starting out as newlyweds is to make a budget. A joint budget will help you both determine where you should allocate money for reducing your partner’s heavy debt; it will also help to ensure you pay your bills, save for retirement, and even have some money left over for fun. Reviewing the budget each month will also help your partner and you stay focused on reducing that heavy debt, so you’ll both be on track for a fresh start.
5. Big decisions
It’s great to have a joint budget, but a budget doesn’t cover everything. Your spouse and you should also consider how you’re going to make major purchasing decisions. How are you both going to decide if and when you need a new car, or a home? Any debt that you add in your relationship can complicate efforts to pay off your partner’s outstanding debts. Ensure that you both have a mutually agreed upon path for how you’ll decide to buy big-ticket items, or you’ll never get out of debt.
6. Get help
Sometimes, you don’t realize the extent of your partner’s debt problems until after you’re married. If you determine that your partner’s spending and debt problems are out of control, get help right away. Strongly encourage your partner to meet with a credit counselor; many of these counselors work for nonprofits and offer free support. They can provide advice and help your partner cease harmful spending and debt habits.
You should also talk to your accountant or financial advisor, and ensure that your partner’s debt situation doesn’t further damage your credit rating or endanger your assets. Finally, your partner’s financial distress will more than likely put a strain on your young marriage; consider going to couples counseling while your partner is working through all these debt problems.
Relationships take a great deal of work, and they’re even more challenging when one partner is in serious debt. However, if both of you are committed to one another, debt doesn’t have to be a deal breaker. You should both be as open and honest as possible when it comes to your finances, especially debt. Work together to pay down any debts you have when you enter into marriage, and try to stay as debt free as possible. Doing so will help remove a major stressor from your marriage, and help you focus on having a great, debt-free life together.