Debt Confessions: Is Shame Keeping You from Dealing With Debt?Feb 13, 2018
For many Canadians, unmanageable debt still carries a stigma. The unfortunate reality is that because of that perceived stigma, it can prevent people from talking about their debt even with those closest to them — like their spouse or partner.
Our recent Ipsos poll about relationships and money revealed that one in five Canadians in a marriage or committed relationship have never even discussed their debt load with their significant other.
Yours, mine and ours
A 2016 CIBC poll showed that as many as two-thirds of Canadians enter into marriage or commitment with their own personal debt. Among these couples, only about one-third talk about their personal finances with their partner.
Our poll results showed that those Canadians who have the most debt are the most likely to not talk about money with their spouse or partner.
Finance expert, Rubina Ahmed-Haq explains why it’s imperative for couples to talk about their finances early on in a relationship to avoid devastation down the road.
Her top tips are:
- Merge your money. In order to work toward the same financial goals, create a joint chequing account and credit card so you can divide everyday expenses. Rubina suggests keeping your savings accounts separate so you’re able to save for individual goals as well.
- Share your debt load. If you’ve chosen to merge your money, paying down each other’s debt balances comes with the territory. Work as a team to come up with the best debt repayment strategy so you can crush your debt sooner and move on to another goal.
- If one parent stays home to raise children but doesn’t earn a paycheque, it doesn’t mean they’re not contributing. Discuss how much it would cost to pay for childcare, household chores, etc. Sit down and talk about how to make the situation more equal. Just because one partner isn’t working, doesn’t mean they can’t make financial decisions and contribute to the household through budgeting or reducing expenses.
- Identify your money personality. If one person is a spender and the other is a saver, there will need to be a compromise if you want to reach your financial goals. Consider giving yourselves an “allowance” each month that can be spent frivolously, that will not impact the overall budget.
Don’t miss the warning signs
Couples shouldn’t let pride or shame keep them from exploring debt options. Seeking help early can prevent more financial problems down the road. You may also have more options for dealing with your debt.
A Licensed Insolvency Trustee (LIT) will explain your options so you can make an informed decision. Think of this as a fact-finding mission. If you don’t end up needing his or her services, an LIT will refer you to a trusted financial professional to help you with budget management, debt consolidation or credit counselling.
Debt warning signs include:
- Missing bill payments or paying them after their due date
- Paying only the minimum on your credit cards
- Living paycheque to paycheque with no emergency fund to lean on.
- Having no money left in your account by payday
- Borrowing from one credit card to pay another
You and your partner can enjoy a debt-free lifestyle. Lean on one another for support and keep the lines of communication open and honest when it comes to money, debt and spending.