Is Your Debt Affecting Your Relationships?

/ BY / Managing Debt

American consumers are carrying around a hefty debt load-just over $11 trillion in mortgages, credit card debts, auto loans, and student loans, to name a few. With that in mind, it's safe to say that most people are probably carrying some form of debt. While this obviously has an effect on your finances, your debt load might be negatively impacting your relationships as well.

Marriage and Money

Money problems are consistently named one of the top reasons for getting a divorce. With that in mind, it’s no surprise that one survey from American Express found that 61% of couples surveyed said that their household finance discussions often led to arguments. That same survey found that 50% of couples don’t agree with the financial habits of their partner.

While most couples will agree that openness and honesty about finances is crucial in a relationship, nearly 31% of Americans who combine their finances after marriage admit to lying to their spouses about money. Of those surveyed, 20% also said they had a credit card their spouse had no knowledge of.

Dating and Money

Money woes and debt don’t just affect married couples. One survey by creditcards.com found that for singles, debt and poor money management skills are a red flag and even a deal-breaker for many. Fifty-seven percent of women and 48% of men surveyed said that having debt is a turn-off in a relationship. For women, 71% agreed that keeping debt a secret is a good enough reason for breaking up, while just 54% of men said the same thing.

How you manage your money now is not the only thing singles are looking at. For 57% of women and 47% of men, a partner’s credit score is a determining factor in their relationship.

Avoiding Money Problems in Relationships

Financial experts and couples alike all agree that openness and honesty is key in maintaining financial harmony in your relationships. Things you can do to avoid arguments about money in your relationship include:

  • Be honest. Don’t keep secret credit cards, hoard money, or lie about how much you spend on things. When it inevitably comes into the open, it will only cause more problems when your partner learns you’ve lied.
  • Keep each other in the loop. Instead of having one person manage all the finances in a marriage, work on them together. Do a budget together once a month so you’re both in agreement about how much should be spent on what each month.
  • Set goals together. All couples should have financial goals they are working towards together, whether it’s paying off debt, increasing your savings, or saving for retirement.
  • Compromise. In all likelihood, you’re not going to be in complete agreement on everything. Try and compromise when it comes to finances. For example, if your spouse likes to spend and you like to save, budget for both.
  • Discuss money before marriage. It’s important to have a frank discussion about money management before getting married. Couples who disagree about certain things, like whether you should save money or pay off debt, are more likely to argue than those who have similar attitudes.
  • Work on paying off your debt. If you’re single, you can avoid going into a relationship with the stress of heavy debt by paying off your debt and avoiding taking on any more. Married couples should also work to reduce their debt load; one survey found that couples with debt are 31% more likely to fight about money than those without.

When it comes to relationships, money matters. Getting control of your debt and being open and honest with your partner about your finances is the best way to avoid problems down the road.

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Please note your financial situation is unique and our tips & advice presented here may not be appropriate for your situation. CreditCardXpo.com recommends that you seek different advice & opinions from your own accountant or financial adviser who understands your individual circumstances before making any important decisions or implementing any financial strategy.