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Debt can be a huge weight on any couple’s budget. We cover three key ways you can start paying it off faster. We also get into how to open up if you're carrying debt and haven't told your spouse!
Getting Back To Dumping Debt
As if the pandemic isn’t enough stress, millions of families have to deal with the financial fallout.
And If you’ve had to deal with job loss, reduced hours at work, or uncertainty at your job about its stability, these past few months you’re hyper aware of your cash flow.
And because of that, any debt that you carry (maybe with the exception of federal student loans) feels like it has a bigger impact than normal.
During our mini-series about financially dealing with the coronavirus, we discussed that building up that financial cushion is key.
And hopefully, things have stabilized somewhat and you have those savings available should you need it.
However you may be wondering is there a way to get some breathing room and knock out some debt before the year wraps up.
I think you’ll enjoy today’s show then!
In this episode we’ll get into:
- A system to pay your debt off
- ways to you can start paying it off faster
- how to open up if you're carrying debt and haven't told your spouse
Let’s get started!
Resources to Dump Your Debt Together
If you two are ready to pay off your debt, here are some handy resources to check out:
- Best Budget and Money Apps: Personal Capital, Tiller, Mint, Zeta
- Free 5 Days to $5K Course
- Jumpstart Your Marriage and Your Money
- Trim: With Trim, you can cancel subscriptions and negotiate your bills.
- Billshark: They contact your service providers and negotiate the best price on your behalf.
- Paribus: Bought something and a week later the price drops? Paribus can get you back the difference.
- Total Money Makeover
- Free Debt Snowball Template
- How to Diffuse Money Fights
- What’s Your One Page Financial Plan?
- How to Build Income Streams to Knock Out Your Money Goals Faster
- Yours, Mine, and Ours: Dealing with Debt and Marriage
Thank You to Our Partner Coastal
Support for this podcast comes from Coastal Credit Union!
I want to share a few key takeaways I picked up while preparing this episode.
- Systems Can Be Willpower
- Be Open to Experimenting
- Don’t let financial infidelity destroy your marriage
If you want to talk about this more, please join us in the Thriving Families group on Facebook. We’re here to help one another out with our big goals.
Set Up Your Debt Freedom System
Even though August is wrapping up, there is still time for the two of you to make some headway with your debt.
Having a budget is a wise move, but it’s only one piece of the puzzle.
One of the best ways you can make the most of these next few months is to have a system in place with your money so by default it’s moving in the direction you want.
There are five steps you need to take.
- Get SMART with Your Goals. You want your goals to be specific, measurable, attainable, relevant, and time bound.
- Define Your WHY. As much as you may be interested now in tackling your goal, the reality is that motivation alone isn’t going to get you to your goal.
- Create a Budget: Before you can up with your budget to pay off that debt, you have to know and break down your numbers. It’s like planning a trip. You need to decide where to go, but also where you currently are. So let’s say you’re looking to pay off a credit card with a $1,000 balance. Knowing that you have four months, you’d need to budget $250/month or about $56/week.
- Automate Your Payments. With a budget in place you can now take a lot of stress off your back by automating your money.
- Each Month Adjust as Needed. Last episode we mentioned the need for a flexible budget. Life happens. You can deal with this in a low stress way by having monthly money dates where you check in with each other and review your budget. What worked? What didn’t? And adjust.
Having a system to do the heavy lifting will not only help financially but frees you up to focus and think about the big picture!
How to Open Up About Debt to Your Spouse
Talking about money can be stressful, especially when you’re first starting off.
When we first opened up about our finances it was an eye-opener and one of the reasons was because we got a clearer picture of how we handle money and we discovered how much debt we each had.
In our case I had the bigger balance. Honestly as awkward as that was at first, having that transparency made all the difference.
One of the most damaging things to a marriage is not necessarily the debt itself, but when you hide or minimize what’s really going on with your spouse.
Then it becomes financial infidelity,
It can be hard to define it, but the general consensus is when one spouse is making significant financial moves without the knowledge of the other.
And it’s more common than you think. A recent survey conducted for National Endowment for Financial Education® (NEFE®) revealed that two in five Americans admitted to committing financial infidelity.
Something that can also help is listening to how other couples opened up about their debts and dealing with financial infidelity.
I have quite a few stories here on the podcast (which I’ll link up to in the show notes) where couples were in that boat. In fact, I interviewed my husband years later to get his perspective of when we first opened the financial books to one another.
Of course, every couple has their own unique situation, but after interviewing ones who have managed to tackle their debt and gotten closer, there are a few key points that kept coming up.
Here are some ways to tackle this difficult situation together:
- Don’t start off with blaming and accusations.
- Open up about finances.
- Pull in someone else to keep things objective
- Process your feelings honestly. Forgiveness can be a process.
- Discuss mutual goals that you want to work towards
- Spending Expectations and Accountability (Money Dates)
- Seek counseling
So if you’re ready to get on the same page, don’t wait. It’s a process for sure, but well worth it.
Support the Podcast!
Thank you so much for listening to the podcast! If you enjoyed this episode and found it helpful, here are some ways to support it.
- Spread the word! If you enjoyed this episode and think it can help a buddy get on the path to dumping debt and become financially free, please share.
- Leave a review. Honest feedback and reviews make a big difference and gets the word out about the podcast. Leave your review on Apple or Stitcher.
- Grab a copy of Jumpstart Your Marriage and Your Money. My book is designed for a busy couple to set up their finances in 4 weeks. Get tips and tools that have worked for other couples on their journey of building their marriage and wealth together!