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Debt for Newly Married Couples - Combined Debt for Newlyweds

Debt Can Be a Problem for Newlyweds

Last Updated: July 28, 2016

When you walked down the aisle with your significant other to finally tie the knot you heard the preacher say, "for richer or for poorer," and did not even think twice about that statement. Fast forward a few months and now that phrase has taken on a whole new meaning. Student loans and credit card debt now seem a far bigger issue now that two people are contributing to the bottom line amount of what is owed and what needs to be paid on every month.

Today, as many Americans struggle with massive debt, younger adults are in even worse shape when you figure in the ten of thousands of dollars owed in schools loans, auto loans and credit card balances. What in the world can these poor newlyweds do about this compounding problem?

Be Honest With Your Spouse

During your courtship, who had the time or the desire to talk about finances let alone how much money you owed in loans or credit card debt. Well, now is the time to start being honest with your spouse. Both of you need to lay it all out on the table, so to speak, and divulge to the other just exactly how deep you are in debt. Make a list of all your creditors and the balances due to date. Next, itemize out the minimum monthly payments due on each loan and when each payment is due.

Having this heart-to-heart discussion will not only get everything out in the open, it will alleviate any misunderstandings down the road. For say, when you are trying to buy a house and the lender pulls your credit only to find a bunch of outstanding loans and then denies your loan.

Work Together to Form a Payment Plan

After the two of you had your heart-to-heart talk about how much debt each of you have, now is the time to work out a payment plan to pay down your debts. Eventually, you will want to buy a house and to qualify for a decent mortgage loan rate, you have to have pretty good credit. Making sure your payments are up to date and your credit card balances are low, are the biggest factors when evaluating and obtaining your credit scores.

The best way to tackle this is to list out all the outstanding balances with the minimum payments due on each. Add them all up. Now, figure out what you take home each month in combined salaries and subtract the total payments from your net income. Do you have enough left over for rent? Food? Gas? If so, then start paying down your loans. If not, look into possibly consolidating a few of the debts or negotiating a settlement with your creditors. See our section on Settling Your Debts for more information.

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Now that you have all the debt payments figured out, put one of you in charge of making the payments every month. This way, one person is in charge of paying on all the loans so that nothing will be overlooked. This person should also try to pay a little bit extra on some of the debts each month, if you can. This will save you money in interest payments and pay a few of the debts off quicker. Every six months or so, sit back down together and review the balances to see if anything needs to be readjusted. You will see that in no time, debts will start to be paid in full freeing up a little bit more money to pay on something else.

Obtain Copies of Your Credit Reports

After you get married, it is a good idea for both of you to order copies of your credit reports and check them over closely. This will help to identify any negative items that may be dragging down your credit scores. You may want to work with a credit repair company to fix your credit or you can do it yourself. Either way, if you do have inaccurate or negative marks on your credit, now is the time to work to get them off and get your credit back on track.

Write Out Your Future Financial Goals

Probably one of the most important things you can do as a couple is to write out your future financial goals. To make it easy, break your goals up into increments of say two years. When you write out your goals, make sure to be as specific as possible. For example, your first goal could be in one year and then the next goal could be two years later.

Your first year's goal could be to cut down your debt by 50 percent and your goal for two years later could be to purchase your first home. Then, in a year, when you sit down with your spouse to review your goals, you will need to evaluate if you achieved your goals. If you didn't, talk about what you can change to make those goals a reality.

You will always need to adjust your goals - which is fine - but you always want to have some goals so you know where you are headed financially.

The most important thing you, as a young newlywed, can do is to make sure you are honest with your partner about the financial realities you face, and to formulate the best possible plan to deal with your debts together. Working together to pay down your debts will help to realize a better financial future for both of you.

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