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If you and your spouse have debt, but you're not on the same page about when and how to pay it off, it's time to talk.
Working together to pay off debt is essential. Both partners must agree about budgeting and repayment goals, or it may be difficult to make finances align and eventually reach your goals. Try these five strategies to find the best way to work with your partner to pay off debt.
1. Start the Conversation
Sometimes getting the conversation about debt started is the hardest part for couples who aren't on the same page financially. If you're the spouse who wants to start reducing debt and get your partner on board, you'll need to start the conversation.
Doing so in a way that doesn't immediately alienate the other person will be important to your success. Remember to:
- Avoid assigning blame: Try to think of it as you've gotten into a situation together and you can get out together.
- Choose a good time to talk: Trying to keep your cool right after the credit card bill is opened is hard. Find a better time to strategize.
- Stay firm: Though you're in this together, if the other person is reluctant to work on debt, you'll need to stay firm. Debt can pose serious risks to your financial stability. Make it clear that it's time you both contributed to reducing your debt and resolving your spending challenges.
2. Pick a "Why"
Budgeting for the sake of budgeting is hard to stick to for many folks. Try picking a "why" that you can return to when budgeting gets tough. Your "why" should be a big, overarching reason that you want to get out of debt and become financially stable, such as:
- To provide generational wealth for your kids
- To feel safe in the face of a financial emergency
- To be able to retire comfortably
Under the umbrella of your "why," create smaller but still important tangible goals. Tangible goals are more focused motivations to help you stick to your budget. They are real things you will be able to do or purchase when your debt is paid off. Think of things that are important to your partner and that may offer persuasive reasons for them to focus on debt payoff with you.
For example, a goal could be, "Why are we paying off this credit card? To be able to afford a family vacation next year." This is a goal you will experience with an expiration date that will help motivate your debt payoff. It can also help inspire you to set aside savings as you are paying down debt.
Help your partner imagine what you can do once your debt is paid off. Visualize things like weekends without overtime, saving up for a home with a backyard or taking family trips to create these goals.
3. Have a Budget Date Night
Treating budgeting like a chore will make anyone try to avoid it. Instead, make a plan where you can both work collaboratively on your budget as part of a date night. Try to find some time when it's just the two of you. Make a meal you both enjoy and line up a movie for after the budget work is done. While you're working on your budget, note wins you've had over the past week or month that can help fuel your motivation to stay on track.
Staying relaxed, positive and remembering that you are on the same team can help turn your budget date night into a productive but fun evening.
4. Choose a Payoff Strategy
Not everyone feels motivated in the same way. That's why experts often recommend two distinct debt payoff options, known as the snowball method or the avalanche method.
With the snowball method, you'll make minimum payments on all your debts except the one with the smallest balance; you'll put as much as your budget allows to pay off that balance, then move on to the next-smallest debt. Paying off your smallest debts first can help build momentum and rack up some quick wins. After this, your debt payoffs should increase, or "snowball."
The avalanche method has you pay off your debt with the highest interest rate first. Though this method could save you the most money, it may feel discouraging if your highest-interest debt also happens to be your largest total and will take a while to pay down.
You and your spouse can decide which method feels the most motivating and start a list of which debts to tackle in which order. There really is no right or wrong way to do it as long as you are working together to improve your financial situation as a team.
5. Set Milestones
Part of successfully meeting a huge goal is breaking it down into smaller milestones. Your milestones could be paid-off accounts or paying a certain dollar amount to your debts over a set time period. Celebrate your milestones to reward yourselves and stay motivated to continue.
Creating a visual tracker and celebrating milestones may be enough for you as you work to pay off debt. Or perhaps you'll want to save for particular items or experiences to reward yourself with at each milestone. This can be a great motivator as long as you feel able to stick to your budget after this small spending event.
Communication Paves the Way to Paying Off Debt
Paying off debt as a couple is a team effort. Working together to change your spending habits and create a budget that will help you avoid debt in the future takes solid communication.
A great way to start talking about your debt repayment journey is by reviewing your credit reports. You can get your credit score and credit report for free from Experian.
Married couples have separate credit reports, so be sure that you both download your own. Your credit report will show your open accounts and recent balances. Use these as a jumping-off point to decide which debts to pay first, how and when.