Don't let credit card debt delay marriage
Marriage has financial benefits, shedding debt can be one
So you’ve met the person you want to spend the rest of your life with. You are emotionally ready to say “I do,” but you have a mountain of credit card debt.
Should you delay marriage until you pay off your debts?
A growing number of young couples seem to be saying yes. A 2014 Pew Research study found the median age for both men and women to marry was at an all-time high, and many young people cited the need to be financially stable – and their debt – as a reason why.
But putting off tying the knot is not always your best financial move, personal finance experts say.
“Married life can help you pay off debt faster,” says Bruce McClary, spokesman for the National Foundation for Credit Counseling. “I’ve seen many couples successfully pool their resources and work together to tackle their most significant debt, without regard to who owns it.”
Sharing financial lives can mean savings
If marriage means you start sharing household finances, the savings can go toward debt repayment, McClary says. Married people often enjoy savings when it comes to insurance, retirement and taxes. One study, at Ohio State University, found that getting married sharply increases your level of wealth over time.
Marriage brings other financial perks, too. Switching to a family plan for your cellphone and insurance can save you hundreds of dollars a year. And if your spouse has a job with less expensive health insurance benefits, you both may be able to sign up.
The big stick: accountability
But perhaps the biggest way marriage can help you tackle your debt is by creating spending accountability, says Michael McAuliffe, president of Family Credit Management, a Chicago-based nonprofit consumer credit counseling agency.
“When it’s just you seeing your charges each month, it’s pretty easy to spend too much,” McAuliffe says. “If you know your spouse is looking over your shoulder, and you’re working toward a goal together, you’re going to think twice before you make a big purchase.”
Amanda L. Grossman, founder of FrugalConfessions.com, said she and her husband had about $25,000 in debt between them when they got engaged in 2009. After they combined their finances, they quickly decided that tackling their debt was a top priority.
“We kept each other motivated, and celebrated by going out to dinner after each creditor was successfully paid off,” Grossman said. “In the end, the rewards were far greater than just paying off the debt. We learned how to work together in our new marriage toward a common goal, and that cemented our faith and trust in each other.”
Grossman and other experts stressed the importance having open and honest conversations about your debt before walking down the aisle. “Make sure you’re being 100 percent honest, because surprises can lead to real problems,” McAuliffe says. “Talking about these things now will strengthen your relationship and keep your debt from causing trouble down the line.”
If you live in a state with community property laws, understand that debts generated during marriage will belong to both of you. Make sure your spouse is willing and comfortable helping to contribute toward debt repayment. Then agree to a plan for paying it off. If you need help, reach out to a nonprofit credit counseling agency.
“Ultimately, it’s not just a matter of numbers; it’s a matter of how you feel about someone and the strength of your emotional commitment,” McClary says. “If you talk about your debt ahead of time and agree on some guidelines, your debt does not have to stand in the way of spending the rest of your life with someone.”
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