Debt Confessions: Talk about Getting Help with DebtFeb 13, 2018
Are financial issues are causing conflict in your relationship? What options do you and your spouse or partner have for getting help with debt and other financial problems?
Our recent poll about relationships and money found that Canadians sometimes have trouble being honest with their partner about finances. Let’s look at some of the surprising results of our poll:
- Canadians aren’t in love with their partner’s financial habits. Six out of 10 couples would like to change a financial habit of their partner with 22 per cent of those wanting to change three or more habits.
- Canadians are keeping financial secrets. Three out of 10 say they are hiding or have hidden a financial habit or behaviour from their partner. The most common secret: overspending.
- Eight out of 10 couples have discussed consumer debt. But, not every generation is open about their debt. Gen Xers and baby boomers are less likely to talk debt with their partner than Millennials.
- Credit card debt isn’t a popular topic with some Canadian couples. Credit card debt is the most common type of debt that gets hidden from a partner.
A key takeaway is that even though discussions are happening, they need to happen more often in a relationship. What steps can you and your spouse or partner take to begin getting help with debt?
- Work from a budget
Whether you manage finances together or separately, having a good budget in place can help you reduce debt, pay bills on time, and put money into savings. You and your partner can find budgeting resources online or try talking with a non-profit budget or credit counsellor.
Make sure you make as much room as possible in your budget for debt repayment, and choose a debt reduction strategy that works for both of you.
Personal finance writer Barry Choi talks about two popular debt reduction strategies in his blog on his website Money We Have.
- Explore a consolidation loan
Consolidating multiple debts into a single loan can help lower your interest rate and potentially lower your monthly debt payment. You’ll pay off one debt rather than multiple debts meaning you can both contribute to paying off the debt owing together and more effectively.
If you explore debt consolidation speak with an advisor at a bank or credit union about the process and get three different quotes in the process to make sure you get the best interest rate. Be careful to not make fill out more than three loan applications or it can negatively impact your credit rating.
- Speak with a Licensed Insolvency Trustee in Mississauga
Sometimes debt problems might be bigger than you can handle together. That’s okay. There are professionals known as Licensed Insolvency Trustees (LIT) and their purpose is to help individuals and couples resolve debt problems.
Speaking with an LIT independently or as a couple will help you figure out what debt solution would best help you reduce your debt. This could mean taking steps on your own like mentioned in the previous points or exploring formal debt relief options such as a consumer proposal or as a last resort bankruptcy.
Sharing debt confessions with a partner can be tough, but it’s an important step in establishing an open and honest dialogue moving forward in the relationship. It’s a great first step in helping you decide if you can reduce debt together or if you need to explore getting help with your debt.