Managing Marital Debt: Strategies for Financial Freedom
Marriage can be a beautiful thing. But when debt enters the picture, financial stress can put a huge strain on relationships. At Delancey Street, we understand – debt is complicated. That’s why we’re here to help couples navigate marital debt in a healthy way.
Being Transparent About Debt Before Marriage
Before walking down the aisle, have an open conversation about your individual debts. This allows you to set expectations and make a joint plan to tackle debt. Share credit scores and reports to fully understand each other’s financial situation. While uncomfortable, transparency prevents surprises and arguments down the road.
Combining Finances With Debt
Once married, you’ll need to decide whether to combine finances or keep them separate. There’s no one-size-fits-all approach. Some couples find pooling income helps them pay off debt faster. Others prefer managing finances individually to avoid enabling bad spending habits. Discuss which method works for your relationship – just communicate every step of the way.
Budgeting and Paying Off Debt
Map out a detailed budget that aligns with both partners’ goals. List out all debts with interest rates. Then, determine how much can be reasonably allotted each month to tackle balances. Pay off high-interest debt first while making minimum payments on low-interest debt. Automate payments to avoid missed dues and late fees.
Earning More Income
Increasing your household income gives you more flexibility to pay off debt:
- Negotiate a raise or promotion at work
- Pick up a side gig like rideshare driving or tutoring
- Sell unused items around the house
- Lower monthly bills by renegotiating rates and services
Every extra dollar earned can chip away at balances.
Understanding Debt Responsibility
Generally, debt belongs to the person who acquired it, even after marriage. However, joint debts are shared. Common marital debts include:
- Credit cards (joint accounts or authorized users)
- Auto, personal, or student loans (co-signed)
- Medical bills (depends on state laws)
Debt acquired individually during marriage may remain separate unless you live in a community property state.
Managing Debt Through Life Changes
Major life events impact finances and debt:
- Job loss: Trim expenses, use emergency savings, and consider balance transfer cards with 0% APR periods.
- New baby: Cut costs and take advantage of tax credits. Avoid taking on new debt.
- Illness or disability: Seek debt relief options like hardship programs and medical credit cards.
- Death of a spouse: You’re responsible for joint debts. Separate debts depend on estate plans.
- Divorce: Debt incurred jointly or individually during marriage must be divided.
Lean on each other during difficult times and communicate about how life changes are impacting your financial plans.
Seeking Professional Help
If debt is causing serious relationship problems, don’t be afraid to seek professional help. Financial advisors and credit counselors can help you make a plan to pay off debt. Couples counseling improves communication around finances. Debt relief programs provide structured ways to settle debt for less than you owe.
Finding Financial Freedom Together
Marital debt can strain even the strongest relationships. But by being transparent, budgeting wisely, increasing income, and seeking help when needed, you can pay off debt faster and grow closer through the process. With teamwork and commitment, you’ll find the financial freedom you deserve.At Delancey Street, our experienced financial specialists help couples every step of the way. Contact us today to start improving your financial health. We’re here to help you gain control of debt and strengthen your marriage at the same time.