What to Do When You’re Both Bringing Debts into a Marriage

There’s a lot to think about leading up to a wedding: the ceremony itself, living arrangements, children and/or pets, honeymoon plans and — of course — finances.

The median first marriage age in the U.S. is around 28 for women and 30 for men, though of course people can get married older or younger — and may get married more than once. But Americans who are currently considered “older millennials” between 25-34, are carrying $42,000 in debt on average. This debt consists of a combination of credit cards, student loans, mortgages, car loans and more.

The takeaway? It’s very common for one or both partners to bring debt into a marriage. 

Here’s how to handle your finances accordingly.

Communicate Transparently About Finances

First things first. To get a plan, you’ll both need to put all your cards on the table. This means sitting down and having an honest dialogue about personal finances: what you make, what you owe, what you’ve saved, and what you’ve invested. This is a time to discuss budgeting, money values and lessons you’ve learned.

While it’s definitely important to discuss types and amounts of debts, it’s arguably more important to communicate about money values — or the attitudes and habits you each hold about spending money. Understanding each other’s money values will help explain why each of your finances are the way they are. Another way to think about it is a “money personality.”

Here are the five primary money personalities, according to Investopedia:

  • Big spenders: Value having the “latest and greatest” and don’t shy away from financial risk.
  • Savers: Generally uncomfortable with having debt — conservative with money.
  • Shoppers: Derive emotional satisfaction from spending money but do enjoy bargains.
  • Debtors: Keep a loose grasp on their finances, often spending more than they earn.
  • Investors: Try to make their money work for them passively, even if it means assuming risk.

Opening up the lines of communication will help you understand your debt situation heading into the marriage, as well as how the other person regards money.

Be Smart About Taking on Joint Debts

Individual debts are tied to Social Security numbers, so getting married doesn’t mean you’ll jointly own debts brought in by one partner. However, any debts you take on jointly moving forward will affect both credit scores.

Look into whether you live in a common law state or community property state. Most states are the former, and will consider debts accumulated by one partner to be the responsibility of that individual. Some states are the latter, which means debts assumed by one partner become the joint responsibility of both married partners. As one financial planner points out, a wife in California could be held liable for credit card debt secretly accumulated by her husband because of state laws.

Depending on where you live, you can decide whether to split up debts or file for them jointly.

Explore Your Options for Paying Down Debt

Marriage often feels like a blank slate of sorts. It’s only natural to want to get rid of debts so you can build a life together unburdened by obligation. So, it’s an excellent time to explore your options — individual or joint — for eliminating debt.

Credit card consolidation through a balance transfer or personal loan may help you get out from under high interest rates. Meeting with a credit counselor to discuss your budget and the possibility of a debt management plan (DMP) is another possible route.

Set Individual and Joint Financial Goals

Setting financial goals is an excellent way to stay motivated. In the short term, you may want to take a vacation, start a family, buy a home, pay for your wedding, add a pet, buy a car, build an emergency fund and/or renovate your home. In the long term, you probably want to travel more, save and retire. Many of these goals depend on eradicating debt along the way, so you can use them to help you come up with a timeline and decide how to best chip away at what you owe.

Bringing debts into a marriage is common — and it’s something that can bring you together, provided you communicate, get a plan and work toward your larger goals together.

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