This is How Counseling Can Help Newlyweds Tackle DebtApr 19, 2017
For newlyweds, the early years of marriage can be an exciting time. This is the time for “new beginnings,” after all. Where moving in together feels new, where you learn about each other’s habits, where you find common goals to work toward — individually and as a couple. You may not be thinking about your debts and financial obligations at this point, but it’s a conversation you should be having sooner rather than later. Perhaps it might be a good idea to seek debt counseling?
Learning about each other’s finances, are part of marriage — like it or not. In some marriages, debt doesn’t become a subject of conversation until after you join all your accounts together. This can leave the concept of “my debt” turning into “our debt.”
Dealing with debt as newlyweds can be emotional, but the power of teamwork can strengthen your Canadian resolve. Debt relief can start with counseling through a Licensed Insolvency Trustee (LIT), who can explain all of your options and provide information about solutions such as a consolidation loan, a consumer proposal or bankruptcy.
Talking through solutions with a Licensed Insolvency Trustee (LIT)
Young couples carrying debt can face challenges, especially when you’re relying on unsteady jobs and “side hustles” to get by. Without emergency savings, a job loss can leave you struggling to get by and taking on more debt. If this or another financial emergency has struck, and you and your spouse are finding your debt to be unmanageable, the first step is to get debt counseling from an LIT.
LITs can do more than simply provide information on bankruptcy. They can also be an invaluable resource for looking at your debt situation and helping you find the best debt relief solution – formal or informal. It’s worth noting that under Canadian law, only an LIT can file for bankruptcy or a consumer proposal, but they can also refer you to a credit counsellor, or to a lending institution for a debt consolidation loan.
After undergoing this debt counseling session, you will leave with strategies to stay on track with debt payments as a couple.
Staying on the path toward debt relief
Being together is about building chemistry. Work with your spouse to develop habits that ensure you’re on the same page in making your debt payments every month.
- Keep the why in mind. Always make sure you’re going back to your financial goals before making split decisions on spending, especially ones that could affect your ability to make debt payments. If you’re paying off debt so you can start a family, keep having conversations about planning for a child to help understand the financial impact a sudden splurge like a last-minute vacation could have on that timeline.
- Think of it as a team sport. Newlyweds need to constantly communicate about their individual financial goals. Much like a sport, team results are earned when individuals bring the best of what they have to the table. If you’re wanting to go back to school and your spouse is keen on a second car, sit down and discuss how much you need to save to make both happen, or find a compromise so you both can be happy.
- Snowball your debt for easy wins. The “snowball method” for paying down debt involves paying off smaller balances before more daunting balances, getting some easy wins to stay motivated for the long-term. With the debt snowball, you would still make the minimum payments on your other debts, which directly any extra income toward the smallest debt. This makes sense for newlywed couples just starting out on debt relief together. Taking small chips out of your debt can get you on a rhythm of repayment — just think of a snowball rolling down a hill.
The path to these strategies often begins with some good debt counseling. Learning all your options from an LIT helps to ensure you’re paying off debt in the best way for you and your family. It’s a good idea to find out all the information you can on every Canadian debt relief solution — bankruptcy is usually not your only option.
Are you looking for debt counseling as a couple? Join the conversation on social media by using the hashtags #BDOdebtrelief and #LetsTalkDebt.