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Debt And Marriage: Something to Discuss Before the Wedding

You may be ready to join lives with the love of your life, until money gets involved. Individual debts are not something most couples consider before marriage but in the same way you discuss which surname your kids will have, you need to ensure you make an informed and mutual decision about debt before the wedding.

The way individual debts are viewed after married varies depending on which state you are in and you will need to seek personalised advice on joint assets, credit card debts and debts accrued after marriage, regarding the state in which you are getting married. Regardless of the legal and credit implications of joint and individual finances, it makes sense to have the debt discussion with your fiancée before the wedding.

Before you start planning your wedding and before you start spending more money and possibly accumulating more debt, you need to discuss your individual debts with your partner, and how these debts will be dealt with. Make sure you have an honest and calm discussion about debts to build a clear picture of the situation. Clarify the amount of debt each person is bringing to the relationship, as well as the type of debt – personal loan, credit card, student loan – the repayment amounts, the interest rates and the urgency; for example clearing a credit card debt is more urgent than clearing a student loan.

What to do if you’re in Debt

If you’re the one in the relationship with significant debts, you need to work out how to take control of those debts before the wedding. Therefore, consider:

• Consolidating debts. If you have multiple debts and credit cards it can be hard to budget and balance your repayments throughout the month, however if you consolidate all debts into one personal loan you can be paying a lower interest rate, and making just one repayment. You’ll also be able to choose a term for your loan so you have a clear end date for being debt free.
• Balance transfer credit cards. Balance transfer offers are typically for around six to 12 months and offer you a significantly lower interest rate during that time. This gives you a chance to channel more funds towards your balance rather than to interest charges and allows you to be debt free before the wedding.
• Making a budget. It is also important to have a plan to repay your debts therefore look at your budget and your repayments and work out how much extra you can afford to repay towards those debts. You will then be able to work out how much sooner those additional repayments will clear your debts and you’ll have a timeline to your debt reduction.
• Keep the debts your own. Do not put your fiancée’s name on your debts, for example making them an additional card holder on a credit card makes the credit card debt their debt too.

What to Do If Your Fiancée Is In Debt

If it is your future spouse who is in debt you want to be supportive, while at the same time protecting your own financial security and the financial future of your relationship. Therefore, consider:

• A pre-nuptial agreement. This can protect you from being liable for your spouse’s debts after marriage and can make good financial sense as individual debts can often be counted together as a married couple.
• Wait to get married. For the financial security of your future together you may ask that your fiancée repay all of their debts before you get married. This allows you both to start your marriage with a clean slate and you need to be less concerned about credit scores and histories.
• Help them repay the debt. When you get down to it, you’re in the marriage together and if your spouse is repaying their debts with their income, they have less spare income for dinners out, presents or large purchases. Therefore, if you’re in a position to contribute to repaying your partner’s debt, you may want to help towards a future of financial freedom for you both.

What to Do If You’re Both in Debt

Very few people are entirely debt free, so if you and your fiancée both have a bit of debt to clear before the wedding day:

• Marry your debts. If you have similar debt levels you may want to consider consolidating all of your debts and all of their debts into one personal loan. This means one repayment for both of you and of course a lower interest rate than your separate credit cards.
• Make a plan and a budget together. If you’re both in the same situation it is easier to budget and plan for repayments, adjust your lifestyle, and encourage each other to keep on track to repay debts.
• Set milestones. For example if you pay off one credit card you may reward yourselves by choosing a venue. When you have halved the value of a personal loan you can allow yourselves to book your honeymoon. Having these motivations along the way will remind you both why you’re working so hard at your debt reduction plans, as well as ensure you start your married lives together will stronger financial responsibilities and fewer bad debts.

Alban is a personal finance writer at Home Loan Finder, where he helps people to compare home loans.

Debt And Marriage: Something to Discuss Before the Wedding

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