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Managing debt as a couple – expert tips

Controlling your money as a couple can be challenging, even without bills threatening to overwhelm you. We explore how partners can address their debt.

5 March 2024 · Fiona Zerbst

Managing debt as a couple – expert tips

It’s not unusual to find yourself in a relationship with someone burdened by student or other debt – but such a situation can threaten to derail your financial plans and may require careful management.

Two experts advise how couples can navigate this challenge, and provide some useful strategies.

Tip: Find out if you qualify for debt consolidation or another solution that can free up cash.

Talk openly about money matters

Hayley Parry, a money coach and facilitator at 1Life’s Truth About Money financial literacy initiative, says couples should start talking about money as soon as they begin sharing expenses.

“It’s ideal to have these conversations early on, to set the tone in the relationship, as they will only become more difficult later on,” she notes.

The aim is to create an emotional “safe space” for your partner so that any issues can be resolved without blame or shame.

“If your partner’s financial behaviour is causing the issue, it’s important to attack the problem rather than the person,” Parry adds. 

Don’t take on your partner’s debt

Various circumstances can lead to one or both partners incurring debt.

Whether you’re repaying a student loan or struggling to pay back other debt, your financial actions will affect your partner.

Certified financial planner Erin White, a director at Crue Invest, notes that couples can’t contribute equally to a household if one partner’s cash flow has been affected. 

“Even if you aren’t liable for your partner’s debt, you may still be in a difficult position,” she says.

Preventive steps include having an antenuptial contract drawn up before you get married, and marrying out of community of property if your partner will be bringing significant debt into the marriage, she advises.

“Also be sure not to sign surety on any loans taken out by your partner,” she adds.

Put debt-reduction strategies in place

Draw up a debt-repayment plan and set a realistic budget with your partner.

There are different types of repayment plans, including the “snowball method” (eliminating your smallest debts first) and the “avalanche method” (paying off high-interest debt first). Choose the strategy that works best for your situation.

“You may end up paying more interest but, for some people, the snowball method gives them a psychological edge as it’s motivating when they clear their first debt,” says White.

She recommends budgeting using six months’ bank and/or credit card statements and downloading a budgeting app such as 22seven, which provides you with a breakdown of your actual spending, enabling you to draw up a realistic budget.

Ways to tackle debt together

Here are some tips to help you and your partner tackle debt effectively:

  • Discuss your values, goals, attitudes towards money, and how your childhood influenced your money beliefs.
  • Commit to being honest, accountable, and making necessary sacrifices so you can start working towards mutual goals. For example, if debt is holding you back from buying a home, focus on improving your credit scores to secure lower interest on a loan, advises Parry.
  • Nominate the more money-savvy partner in the relationship to keep you both on track – but don’t allow that person to make all the financial decisions.
  • Consider opening a household account – you can each maintain your separate personal accounts, but you’ll have a joint bank account from which only shared expenses are paid, White recommends.
  • If you’re paying off student debt, consider moving in with your parents to cut living costs until you’re in a better financial position. “Consider this a short-term sacrifice to set your relationship up for longer-term stability,” notes Parry.
  • If you can’t make it to payday without needing to borrow money or tap into your savings, you may need professional help. However, be aware that you can’t apply for credit if you’re under debt counselling.
  • Although it’s helpful to consult a financial adviser, you should do this only once you’re on top of your finances. “An adviser will have less room to manoeuvre regarding your long-term goals if you don’t have much disposable income,” Parry counsels.

Tip: Using a budget calculator can help you understand where your money goes.

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