There are a lot of debt problems American consumers face on a daily basis which has an adverse effect on every aspect of their lives. One of which is when they fall in love with another person trying to picture their future together. In all these plans, money and finances as well debt will play an integral role in their decisions that can shape and mold their relationship.
It would be noteworthy to know that debt is a big problem for a good percentage of consumers. In fact, Newyorkfed.org coined the term “negative wealth” to describe some people who are deep in debt. This refers to those whose accumulated debt which far exceeds their assets combined. This means that if they sold everything they have and combine it with cash that they have, they wouldn’t even be able to pay off all their debts.
The survey pointed out that negative wealth affects about 14% of American consumers and almost 1.1% is barely making ends meet and breaking even. If you look at this, more than 1 in 10 people would not be able to pay off their debt with everything they have. Though it affects only a small percentage of the population, the fact that it exists should be of concern to consumers.
There are a few reasons how debt is pulling you down such as poor financial knowledge or just simply not having any goals in mind. Not having anything to aspire for in the future can make you wander off like a ship at sea without any sails, a destination, and a map. You circle around with really nowhere to go.
Dealing with debt problems when in love
Falling in love can be a wonderful thing but what if it can also lead you to debt? It might sound preposterous but there are instances when love can actually be the reason why you are in the red. If you find yourself falling in love, getting engaged and about to walk down the aisle, here are a few financial tips to consider before saying “I do!”
- Talk about money matters. “What is your credit score?” should not be your first question on your first date. There might not be a second date as well if you ask if they have student loans and if they are paying them because you read an article from WSJ.com that 1 in 10 borrowers are lagging behind on payments. These are conversations for later but it would be good to get an idea how they view financial management. Try to assess if they have plans for the future or just dealing with what they get everyday. This can be a great start and give you an idea if they value financial goals or throw caution to the wind when it comes to debt problems.
- Get into the details. When things get serious, this is a good time to get serious with money talks as well. Do not be afraid that it will kill your moment or might rain on your romantic journey. On the contrary, it should strengthen your relationship and bring it to the next level. This is where details come in like student loan amounts, credit score, budget and others. You need to do this to have an idea what each of you is bringing to the table – both debt and income. This gives you a better idea on how you can make plans for your wedding, are you getting a house or renting, are you getting a second car and so on.
- Create a financial blueprint. Now that you have the details, you are in a better position to jot down your plans. You need to put in some actionable items in your financial journey together to tackle not only debt problems but how you can save for the future as well. Once you have the details, it lets you look at options whether you just have to keep with your payment schedule or look into debt consolidation. Having the opportunity to make informed decisions puts your relationship in a better position to grow and mature as a couple.
Money should enhance and not ruin your love life
The topic of money is a sexy or popular one for people who are just starting to fall in love with each other.in fact, the two usually do not mix at the early stages of a relationship. There are a lot of compatibility aspects that people usually prioritize and finances are shoved to the sidelines. But it would be interesting to note that according to Huffingtonpost.com, one of the top reasons for divorce in the country is due to financial misunderstandings. Here are a few things you might want to look into to help you address this issue.
- Accept changes. You need to mentally prepare yourself when entering into any relationship and this includes having to accept that things will start to change. This is a tough one especially when you are already set in some of your ways and have been used to doing things by yourself for a long time. This includes your finances because once you fall in love and get married, you now need to work together to make your budget work. You might be tempted to micromanage the situation and hover over your partner’s shoulder when budgeting time comes or worse, decide to do everything yourself. Though it could work for some people, it is better to try and work together on all aspects of your life especially when it comes to finances.
- Honesty and trust. Trust is an important aspect of almost anything in life especially when it comes to money. This is even the reason why you try to look for reliable debt relief companies when you are dealing with debt problems. The same with your partner in life, you need to be able to trust the person when you start talking about money. But you also have to remember that when you are in a relationship, holding up your partner to a certain standard of honesty requires that you give him or her the same level of honesty. This has to be a two-way street and be very careful in breaking this trust because one wrong move can undo years of confidence with each other.
- Establish and combine goals. As an individual person, you have plans and dreams of your own that you want to accomplish and getting married should not hinder you from reaching those dreams. In fact, it should even be a support system for you to become a better version of yourself. But as a couple, you also need to set combined goals even when it comes to financial objectives for the family. Are you planning to buy a house in a few year’s time or save up really early for your retirement fund? If you have children, are you setting up a college fund for them or you just plan to cover a portion and they take out student loans when they get to higher education?
- Establish a budget together. As soon as you set down your financial goals as a couple, you need to start looking at your budget to see how you can make those plans a reality. If you want to move in to your own house in five years, then you jot down how much of a down payment you need to save up. You look at how much you need to set aside every month and what expenses, if any, needs to be moved around. If you want to save up for an early retirement, look at how much you need to be putting into your 401(k) and other investments to make it happen. If you have plans, you better work your budget around to make them a reality.
Falling in love should not lead to falling into debt problems for you and loved one. There are ways to deal with it and there are also tips to help you ensure you are prepared to face the challenges ahead. The important thing is you work through them together because that is the only way you will grow and mature as a couple.