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BDO Timmins

7-85 Pine Street S
Timmins, Ontario
P4N 2K1
(705) 268-3333

How to Reveal Consumer Debt To Your Partner and Find Help

Entering into committed relationship with your partner should mean also coming clean about your consumer debts. Finding help together can also strengthen your relationship and allow you to plan for your future and set financial goals together.

How to reveal debt or financial problems to your partner

The reality is that two-thirds of couples bring debt to the table when they marry or make a commitment, and only 35 per cent of those couples come clean about their financial situation prior to their commitment.  Since there’s such a high correlation between financial disagreement and divorce, it’s best to discuss your financial history ahead of time. Consider how you might feel if your partner were hiding a large sum of debt from you before marriage and you found out about it years later. Doesn’t seem like a nice surprise does it? Another thing to consider is that debt, whether hidden or known, can keep both of you from meeting important milestones such as planning a wedding or buying a home. Here are a few ways to make the financial talk less intimidating:

  • Schedule a financial date night. Pick a casual place with minimal distractions. A public place might be preferable to ensure you’re both on your best behavior.
  • Come prepared. Print off credit card statements and any other bills that will help you both sort through your financial situation. Crunch the numbers and come up with your debt totals. Use a debt calculator to help.
  • Make a plan. Once your debts and your partner’s debts are all in the open, brainstorm ways to deal with them. Can you pick up extra hours to make extra payments? Can some debts be combined to lower interest payments?

Now what?

Debt doesn’t need to drag down your plans, but repaying debt may require some temporary sacrifices.

  1. Together, create a clear and concise budget that details your monthly expenses. Use an app or worksheet and write down all your totals. What areas can be cut? Usually, there is room in the grocery budget or entertainment departments. And thankfully, hydro rates are expected to drop which will offer relief, especially to those in Northern Ontario.
  2. Decide whether you and your partner wish to combine incomes or keep them separate. You’ll still need to work together to calculate combined household expenses. Gail Vaz-Oxlade details how couples can split expenses fairly, based on income.
  3. Set SMART goals as a couple. If debt repayment is the main goal, set a realistic milestone. Example: $5,000 in credit card debt can seem overwhelming all at once. Break it down into smaller steps by dedicating money each month to reducing the balance, and make sure you are working within a realistic time-frame.
  4. Save each month by paying yourselves first. Automate your savings to ensure you are growing a sufficient emergency fund which will keep you from turning to debt in the future. From there, set short, medium and long-term savings goals.
  5. Find help with debt management. In Timmins, a bankruptcy advisor, also known as a Licensed Insolvency Trustee can direct you toward the best possible debt repayment options. This may include credit counselling, a consolidation loan or a consumer proposal to reduce debts and help you get back on target with your goals.

Have you and your partner discussed finding help for your consumer debt? Compare your options and test your financial health so you can both move on to the next milestone.

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