How to Talk (not Fight) About Money & Debt With Your Partner

Article money

We all know that every relationship has its stressful moments. But which topic of disagreement do you think is the biggest red flag in relationships: Children? Sex? Work? Nope. One of the strongest predictors of divorce are disagreements about money, according to the National Survey of Families and Households. If you’re in a relationship where you or your partner has an unhealthy level of debt, we have some tips to help you have a productive conversation and get your financial life back in order.

First, Set Some Ground Rules

Use “I” instead of “you.” Instead of placing blame on the other person, express what it is about a situation that bothers you. For example, “You don’t seem to care that we have $25 left in our savings account” comes across very differently to the listener than “I feel stressed out when we have less than $1,000 in savings.”

 

Postpone the conversation when anger slips in. When you feel your heart rate spike, take a deep breath, count to 10, and restate the issue at hand to clarify misunderstandings. If this doesn’t calm the tone, agree to walk away from the table and readdress the problem when you are feeling less heated.

 

Define what acceptable behavior is and isn’t. Some basic guidelines include no swearing, no yelling and no interrupting.

Take Into Consideration

Talk while taking a walk or hiking; side-by-side conversation is especially helpful for men, who can often communicate more effectively when doing some activity. Listen carefully to your partner and give him or her silent space to finish sentences

 

Speak up; leaving small issues unaddressed can lead to resentment and anger, which becomes a much bigger problem to address. Once you have hashed out what has frustrated you about your financial situation, create a plan and hold yourselves accountable for making tangible changes.

Tips for Creating a Plan

Lay out reality. Find out what you owe, along with the interest rates you are paying on each debt, and write down your monthly payments. Get a sense of what your monthly living expenses are. On the flip side, take stock of what money you have access to, including any equity in a home, any annuities you may have, vehicles, checking and savings accounts, insurance policies and retirement plans.

 

Make a budget. The online financial planning platform LearnVest proposes a 50/20/30 guideline for budgeting. Fixed costs like mortgage, utility and car payments should be no more than 50 percent of your income. They recommend using 20 percent of your take-home pay on building a financial base, including paying down debt, saving for retirement and building an emergency fund. The remaining 30 percent of your income can go toward flexible expenses like groceries, eating out, hobbies and gas.

 

Lower your payments. If you have credit card debt, consider transferring the balances to a zero-interest card. If the situation is right for you and the cost of doing so will be less than the ultimate change in your cash flow, you can look into refinancing your mortgage or consolidating loans.

 

Free up assets. If you receive periodic payments from an annuity, consider selling some or all of your future payments to a company like J.G. Wentworth for a lump sum of cash now. You could then use the money to help pay down your debt. Similarly, if you can make do with one car instead of two or three, sell it and make the compromise to carpool for a period of time until you’ve paid off your debt and can buy another car with savings.

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