Debt in Marriage: Managing Your Finances Together
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Hogging the duvet, drinking the last of the milk, leaving the toilet seat up — couples have to put up with plenty of their partners’ annoying habits. While these examples are (mostly) innocuous, other behaviors can be more damaging to a marriage — such as fighting about money or debt.
According to a 2017 survey on divorce and debt by MagnifyMoney (a LendingTree company), one in five divorcees said money problems were the main cause of their marital split. Specifically, debt was these divorcees’ most common complaint, with 31% citing a form of debt as the biggest source of financial tension.
Addressing your debt head-on, however, can help you restore both your financial and marital security. Here’s a look at how debt can dampen marital bliss, and how couples can get past debt disagreements.
What happens to debt when you get married
Couples with debt might wonder how getting married could affect these financial obligations. Are debts combined after marriage or kept separate? Who is legally responsible to repay debt after marriage?
Fortunately, you don’t have to wonder. The rules about debt and marriage are fairly straightforward:
- If you and your partner take out debt together, either before or after you’re married, you’ll both be equally responsible for repaying it. This includes lines of credit, credit cards, or other accounts that are jointly owned or cosigned.
- If one partner takes out debt when single, this debt will remain their sole responsibility after marriage and the other spouse has no obligation to repay it.
- If you’re married and borrow alone, with only your name on a credit account and not your spouse’s, this debt will likely remain yours. You’ll be solely responsible for repaying it in the case of separation or divorce. The exceptions to this rule are if the debt was borrowed for shared expenses or living costs, or if you live in a community property state.
- If you live in a community property state, almost all debt acquired during a marriage is the joint responsibility of both spouses — even if only one spouse owns the account. The following states are community property states: Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin.
These rules cover most types of marital debt, but every couple’s situation is different and there can be exceptions. Look up your state’s marital property laws to see when debt is or isn’t considered shared. In the case of a separation or divorce, consult a lawyer to get clarity about your responsibility for debt held by you or your spouse.
Married with debt: Data on how debt affects couples
Dealing with debt isn’t always easy for couples to do — owing money means dealing with monthly payments, interest costs, and financial stress. Here’s a look at the statistics on how debt and marriage mix:
- In romantic relationships, it’s hard to talk about debt. Sixty percent of people rarely discuss their debt with a significant other, according to a Merrill Edge Report. And 24% of student loan borrowers admit to keeping student loans a secret from a partner, per Student Loan Hero. (Note: Student Loan Hero is also owned by LendingTree.)
- Many couples delay marriage because of debt. With debt more common among today’s young people, this burden can make couples hesitant to tie the knot. Thirty-five percent of people with student debt said they put off getting married because of their student debt, and around 25% delayed moving in together for the same reason.
- Marriage itself can add to a couple’s debt burden. About three in four couples get into debt to pay for their wedding, with credit cards being the most common way to borrow.
- Debt is a common issue for couples. More than half of couples have debt upon tying the knot — and it’s a source of conflict for four in 10 of these couples, found a Fidelity study. Couples concerned about debt are also more likely to fight about finances and struggle to communicate about money.
- Couples don’t always agree about how to pay off debt. About half of couples disagree about which partner is responsible for repaying a debt held by just one spouse. Despite this, 55% of people would expect to help repay a partner’s debt.
- Stress over debt can affect intimacy. One-third of people with student loans said they experienced a drop in libido that they attributed to debt stress.
- Debt can also be a big factor in divorce. As mentioned above, money and debt cause 21% of divorces. And among divorcees with student loans, 13% said this debt led to their split.
Why married couples clash over debt
These statistics prove how damaging debt can be to a marriage, but they don’t quite explain why. Here are some common reasons debt can be so tough on couples.
Debt can cause marital stress
Anyone with debt knows the strain monthly payments can put on a budget. Among people who worry about money, 42% say debt is a frequent concern that can cause feelings of anxiety, fear and insecurity, according to a Northwestern Mutual survey.
As debts pile up, the everyday stress of dealing with them can spill over into a couple’s relationship and contribute to or cause conflicts. One or both spouses might view debt as an obstacle that’s keeping them from moving toward a secure financial future.
Partners aren’t always transparent about debt
Couples who struggle to communicate clearly and openly about their finances are more likely to fight about them instead. The most common form of this is failing to disclose debts to a partner as the relationship becomes more committed.
It can also extend to more serious issues, such as spending or borrowing in secret. This financial infidelity, said Andy Hill, founder of the Marriage, Kids and Money podcast and blog who repaid nearly $250,000 with his wife, “and that can almost be as bad as you know true infidelity, you know, cheating on your spouse.”
“Not only would that be a huge argument at that moment, but that could have some serious damages for the longevity of your relationship,” he added. “The trust factor can really be damaged early on.”
Debt can get too personal
“For a lot of people there many negative emotions associated with their debt,” said Talaat McNeely, who founded His & Her Money with wife Tai McNeely. “They may have feelings of guilt, shame, and in a lot of instances defeat.” In other words, debt moves beyond a matter of account balances and payments and becomes personal.
One person might feel resentful of their spouse’s debt, or feel undervalued if their concerns about debt aren’t taken seriously. At the same time, the other spouse might avoid discussing their debt or get defensive.
When debt and financial matters become loaded with these negative emotions, having a productive conversation can be hard. “Instead of being able to discuss the matter functionally, the conversation goes south,” McNeely said.
Couples can’t compromise on debt management
Couples often disagree about how to handle debt, said Hill.
If one spouse thinks, “‘Hey, you know, debt is just something that we have and will always have,’” he pointed out, while the other partner is feeling motivated to quickly pay it off — “That can be a sticking point in marriage.”
If a debt was taken out by just one partner (either before or after marriage), this can also cause disagreement about whether that partner should pay it off alone or if the spouse should help. When couples can’t reach a compromise, these opposing views can quickly turn into disputes over how to handle debt.
7 steps to conquering debt in a marriage
Successful couples must figure out how to effectively manage finances together — especially debt. Getting rid of debt can lift a huge burden from a marriage.
Until then, couples must manage debt stress and limit its spillover into their marriage. Here’s what couples can do to manage debt more effectively and protect their relationship from financial stress.
1. Fully disclose your debt and financial situation
Before getting married, Hill and his wife opened up about all aspects their finances. Some of the kinds of questions they discussed were, “‘What do you do for a living?’ and ‘What’s your income?’” Hill also disclosed the details of his student debt and a home equity line of credit.
Couples who are considering engagement and marriage must take this vital step of getting “financially naked.” “It’s really good to know what you’re inheriting with the relationship because their debt and your debt becomes ‘our debt,’” he said.
2. Share your life dreams and money goals
When figuring out how to manage debt, follow McNeely’s advice: “Instead of attempting to start the conversation by only focusing on the dollars and cents of the matter, instead create a reason why such a discussion is important to your relationship.”
In other words, find the “why” you both care about — your shared vision of an ideal life together. Share what your dreams would be if the next five years of your lives could look exactly how you’d like. Write down what you each say and find those common goals you both care about.
Taking the time to find your shared dreams and goals can provide you with a vital touchpoint for you and your spouse to get aligned on what you want to do with your finances — and your lives.
3. Take a balanced approach to combining money and debt
Should you combine finances with your spouse — or keep them separate? Ultimately, “Personal finance is so personal,” Hill said, and there’s no “one right way” to manage finances as a couple — “You’ve got to find a way that will help you get to that goal, and it’s going to be different for everybody.”
Some couples will make more progress on money goals when they team up and combine finances, but others might need to maintain more financial autonomy to keep the peace. With debt, a couple might decide it’s fairer for the partner to whom the account belongs to handle it independently, or they could fully share the responsibility of paying it off — or agree on something in between.
“As long as you’re communicating fully about what’s going on, where the money’s coming from and where it’s going — you’re good,” Hill added.
4. Prioritize paying off debt
As part of combining finances and making decisions together, consider how debt fits into your family’s financial goals. Decide how aggressively you want to pay off debt, and what kinds of sacrifices you’re willing (or unwilling) to make in order to do so.
When McNeely brought around $30,000 of debt into his marriage, he and Tai decided that paying it off was their top financial priority. “We were both employed and we decided to build our lifestyle based on only one of the incomes,” he said. “We sacrificed in a lot of areas and used the other income solely to get rid of our debt as fast as possible.”
The McNeelys worked as a team to manage their money and pay down debt, and eliminated the full $30,000 balance in their first year of marriage.
5. Spend less, earn more and pay extra toward debt
“If the goal is to eliminate the debt or reduce the debt there’s really only a couple ways to do it: You got to earn more and spend less,” Hill said. Sounds easy enough, but putting it into practice takes diligence:
- Track all household expenses. “Everyone knows what they earn but not everyone knows how much they spend, so write down specifically what you’re spending each month,” Hill said. Review expenses as a couple to get an idea of where you’re at today.
- Analyze your spending habits.“Once people look at their numbers they’re like, ‘Wow, I didn’t know we spent $1200 a month on groceries, maybe that’s something we can dial back a bit,’” Hill said. Find areas in your own budget where you’re overspending and can cut back.
- Set and follow a budget. Based on your expense analysis, decide on new spending targets that will free up more money. You can also include extra debt payments as their own line item in your budget.
- Reallocate savings to debt repayment. If shopping smarter shaves $200 off your grocery spending, for instance, turn around and apply that $200 to debt.
- Earn extra money to put toward debt. Look for sources of additional income: pick up extra hours, get a part-time second job, or start a side hustle. Then use these extra funds to pay off debt even faster.
“It might be difficult for a little while, but man, you’re going to really enjoy the debt freedom and the great partnership with your spouse along the way,” Hill said.
6. Get strategic with your debt
Employing some clever debt strategies can also help you pay off your debt faster and smarter.
Follow the debt snowball or debt avalanche method. With these strategies, you pay the minimums on all your debts and put all extra debt payments toward a single account. The snowball method targets small-balance debts first, while the debt avalanche prioritizes paying down high-interest debt.
Make extra payments until one balance is gone, and you can then roll the amount you were paying on this debt (both the minimum and extra payments) over and apply it to paying off the next debt.
Looking into debt consolidation or refinancing. These moves can help if you want to simplify your debt, lower your monthly payments, or lower the interest rates you’re paying.
You might be able to refinance your mortgage, student loans, or car loans. Or you might consolidate credit card balances or other debt with a personal loan or a balance transfer.
Taking such a step can simplify repayment and even save you money if you use consolidation or refinance to secure a lower interest rate or pay debt down faster. You and your spouse should carefully weigh your options to decide which is right for you, and shop for the right personal loan or other refinance product.
7. Keep each other on track and motivated
As you’re working together toward your shared debt repayment goals, it’s important to keep up your focus and momentum.
Meet weekly or monthly to review your finances and debts together. “Make it an untouchable date on your calendars and set up the appropriate reminders so that this time remains sacred.” McNeely advised. “It’s that important.” These meetings can help you stay focused on your goals, as well as discuss when you might need to be more flexible.
Remember your “why” and keep it top of mind. Whether it’s being able to afford an annual family vacation or allowing one spouse to cut back on hours, Hill said, use it as your motivation to keep up your momentum toward paying off debt.
“Figure out a way to make the debt payoff process fun — then both parties will join in and have a good time with it,” Hill said. One way to do this is by celebrating milestones along the way, such as popping a bottle of champagne open to celebrate your first $5,000 down. Hill also suggested finding a way to make the goal visual — such as getting a large thermometer chart and filling it in as you go.
Give yourself and your debt the credit you deserve, too. In a country that owes a collective $3.88 trillion in consumer debt, paying yours off is no small feat. As Hill pointed out, it’s powerful to be able to say “‘We are a couple that is getting rid of ours, we do not want to be a statistic. We are out of that.”
This article contains links to Student Loan Hero, a LendingTree-owned website.