Financial challenges in marriages are some of the greatest causes of divorce. This means that the couple has to constantly work on their financial challenges to avoid unnecessary divorce cases. Unfortunately, a good number of couples who have divorced because of financial challenges never had a prior plan or agreement on how to manage their finances. Here are some useful debt management tips for young couples that will help them avoid unnecessary fights.
Be open about the debts
Having debts is sometimes not the challenge. The challenge comes when young couples cannot openly share about the debts they accrued before or after marriage. Before getting into marriage, it is essential to be open with your spouse about your financial status and any other debt that you might be having. This helps your spouse to know what to expect. Failure to disclose such debts can lead to misunderstanding especially when one has some difficulty in debt repayment.
Always prioritize debt payments
Debts are sometimes inevitable and therefore, a couple has to work out on a plan to pay debts at some point in their marriage. Debts are like necessities they have to be prioritized and paid on time. Any couple should have a financial plan that will allow them to pay the minimum installment amount without defaulting. This will help them to maintain a good credit score and also a working relationship with the credit facility. The advantage of this approach is that it allows one to borrow in case of an urgent need in future.
Prepare a written debt payment plan
Once you are already in debt, payment is inevitable. The couple needs to discuss the best way to pay off the debt efficiently. They have to look at the currently available resources and what they expect in the near future. They also have to factor in other needs that are mandatory. This plan may also require them to do away with luxurious expenditures. After this, one can channel the extra amounts to debt repayment and clear the arrears in the shortest time possible.
Cut on luxurious spending
Apart from paying the minimum monthly installments, a couple may decide to increase the installments to clear the debt within a shorter period than the stipulated time. The budget for vacations and other luxuries may have to be drastically reduced to accommodate extra money for loan repayment. This means that the couple has to develop very strict spending habits. One can comfortably budget for the luxurious expenses after clearing the loan.
Negotiate with your creditors
Negotiating is always an option in extreme cases. There are times when a couple is financially pressed and therefore, may not be in a position to pay their loan in good time. In such cases, there is no need to suffer in silence. The couple should face the creditors and negotiate on available options. During such negotiations, the couple should offer other possible options that they think are viable for them. The options should also be reasonable to the creditor.
The best way to handle debt as a young couple is to work on future spending plans so that you are not forced into unplanned debts. This helps you to have full control of your finances.