How Honest Are You About Your Personal Debt Load?Feb 13, 2018
Canadian couples aren’t discussing personal finances or their debt load as often or as honestly as they should.
Our new poll uncovered some surprising confessions from Canadians in a relationship. One in three Canadians say they rarely or never discuss personal finances with their partner, while 30 per cent say they’re hiding or have hidden a financial secret. When it comes to financial habits, a shocking six in 10 wish they could change their partner’s financial habits. Their top pet peeve: overspending and lack of budgeting.
Time to confess
A few white lies or pet peeves might not seem like a big deal, but they can spell financial disaster over time. Hidden debt can quickly snowball into financial trouble, making it harder to get out of debt without formal solutions. Not to mention, the impact financial strain can have on your relationship over time. It’s no wonder finances are a top culprit for divorce.
The good news is that you can turn it all around by choosing honesty and transparency. Sounds scary, but here are some tips to get it all out in the open:
- Be a good money communicator. Don’t skip details when it comes to purchases or debt. Let your spouse or partner know details so you’re both on the same page, even if you don’t share a bank account.
- Regularly review your budget. If you don’t have one, make a budget together. A good budget is a building block for financial success. Use it as a tool to predict upcoming expenses, delegate debt repayment and plan for the future. Regularly review your budget to account for changes in income or expenses.
- Ask for a second opinion. If you’re having trouble repaying your debt, consult a Licensed Insolvency Trustee (LIT) to help navigate your debt repayment options, or talk to a credit counsellor to help you identify and rectify troublesome spending habits.
- Practice honesty. Always. Financial infidelity can hurt just as much as physical or emotional infidelity. Be honest with your partner about finances from early in the relationship. Or, if you’ve been keeping details a secret, prepare to come clean and start fresh.
How to boost your combined debt efforts
Dealing with a large debt load takes time and patience. Increase your efficiency by working as a team and knowing your options. The Financial Consumer Agency of Canada is a great online resource for couples wishing to improve their financial health. You can also discuss your options with an LIT who can assess your individual situation and explain solutions.
If you think you can deal with your debt on your own, here are a few ways to work on it together:
- Online debt calculators can help you visually see what you owe (and how interest charges affect your payments. A debt repayment calculator allow you to explore your debt options.
- Plan for unexpected circumstances by making automatic payments into a savings account that can be easily accessed in an emergency. You should aim to put away three to six months’ worth of living expenses which will keep you from accumulating debt if you or your partner experience loss of income.
- Practice setting SMART goals together. Use the FCAC’s module to get started.
- Automate your bill payments to ensure all payments are made on time and in full.
- Find money motivation by following finance blogger Kerry Taylor at Squawkfox. She can show you how to live below your means and squash your debt quickly.