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3 Ways to Plan Your Debt Repayment as Newlyweds

Marriage is the joining of two lives, and finances are included in that deal. You may know your financial situation like the back of your hand, but how well do you know your future spouse’s?

It is important not only to have plenty of discussions together about your shared financial goals, but also where you both are in your savings journey today, and what debt obligations already exist before you say I do. 

4 Debt Matters to Consider Before You Tie The Knot

It is easy to get swept into a relationship, and avoid hard conversations. However, it is essential that as a couple, you learn to prioritize open and honest communication about finances.  

If you are not already engaged, but would like to make that commitment in the near future, getting on the same page about money is a way to show your partner that you are thinking about your long-term future together.  

Read more: Wedding Planning with Student Loans? How These 3 Couples Got Thrifty

Will you support each other towards debt-freedom?

It is important to get on the same page about how you will both contribute to your financial well-being. A key part of that is paying down existing debt. Will you become co-owners in this debt and partners in repayment? This can be particularly tricky if one person has debt and the other doesn’t, or if one has significantly more debt than the other.  

The key here is to realize that there is no “my debt” or “your debt” but instead “our debt” after marriage. Even if one person is directly paying for the debt, this has an impact on your long-term wealth strategy. If you decide as a couple to make these debt payments a joint priority, you can start planning your debt-free life together sooner. 

You may lose your income-based student loan repayment option

If you or your spouse are currently benefiting from a federal income-driven repayment plan, it is important to know how your dual-income would change that equation. Combining your income with your spouse’s may change your income bracket and make either of you ineligible for an income-based student loan repayment option, or raise the monthly payment amount.  

Review the Federal Student Aid website’s repayment estimator calculator with your current joint income to see if this has an impact of your repayment plan. 

Read more: Should I Use a Student Loan Repayment Program?

Your spouse’s low credit score could affect future credit opportunities 

A partner’s low credit score may impact your ability to receive a low-interest rate credit card or loan once your finances are combined. If you don’t already know your own credit score, this could be a good time to learn, and work on this as a couple.

Another option if you are already married is applying for a loan or credit card with only one partner’s better credit score. However, applying solo will affect how much you can borrow.

Your spouse’s bankruptcy will impact both of you

Has your future spouse ever declared bankruptcy? This stays on their credit report for up to ten years and will impact your ability to borrow as a couple during that time.  

If they are forced to declare bankruptcy while you are together, you may have to forfeit your combined assets to pay off debts. This could include your home, car, cash, etc. It is important to be honest with each other about any past bankruptcy issues, as they have a major impact on your financial life going forward. 

3 Tips to Tackle Debt as a Married Couple 

If you are getting engaged or are already, you should have already made a shared goal for debt repayment (or now is the time to do so). Once the vows have been said, and the photos are back from the big day, that’s when you put that plan in place.

Budget, budget, budget and hold each other accountable 

Budgeting, the least sexy date night option for newlyweds, but the best for the long-term success of your marriage. It is key to start out on the right foot, and not fall into bad money management habits early. Small treats to celebrate milestones in your debt repayment journey are a good idea to enjoy together, but make sure not to undo your hard work.  

Make sure you are both keeping your budget in mind and are respectful of how hard the other is working to knock out your joint debt. Similar to adding a gym buddy, you might find that having a partner to save with you makes the experience easier and more enjoyable. 

Stay in and enjoy your new marriage

You just threw a party for your family and friends, and maybe went on a nice trip to celebrate your union. After you get into the habit of spending, it can be hard to refocus, but after the excitement and stress of a wedding is a great time to do so. 

Stay in, catch up on that show you didn’t watch because you were tracking down RSVPs. Cook together, go on long walks or hikes, just enjoy each other’s company. There are tons of free date night options out there, make a list on your phone so you have ideas handy. Relationship experts often point to the benefits of setting aside a date night after getting married. A low- to no-cost date will not only support your continued relationship, but also align with your larger financial goals. 

Reframe your thinking   

Marriage is the overnight evolution from ‘yours and mine’ to ‘ours’ — this includes savings and debt. You have decided to spend the rest of your lives together, this is no more ‘my/your debt’. It isn’t healthy for your union to hold your partner’s debt over their head, or for them to resent your debt. Ultimately, making a clear financial plan and supporting each other are the keys to tackling debt as a family.  

Read more: 4 Financial Decisions to Make Before and After Getting Married

Disclaimer: This blog post provides personal finance educational information, and it is not intended to provide legal, financial, or tax advice.