How to Reduce Debt: Changing Your Money AttitudeMay 10, 2017
Are you and your partner wondering how to reduce debt and open the lines of communication about finances? Changing your attitude may be the first step.
Money myths have no place in 2017
Learning how to rid yourself of ingrained money myths may be an important step in achieving money harmony with your spouse. Although the 1950s style family with a working husband and at-home wife is a concept that has gone to the wayside, some of the same attitudes toward money management remain. Baby boomers especially may have grown up learning that speaking about their finances was impolite or taboo, especially when raised in a wealthy family. In addition, boomers are most likely to hide financial transactions from their spouses. On the other hand, millennials are proving to be more open about money matters and up-front with romantic partners about their financial situation.
Reasons to reverse the trend
In today’s changing economy, speaking about finances isn’t just important, it’s necessary. Many Canadian families consist of two working parents who share the duties of earning money, raising children, and dealing with household expenses, so it makes sense that attitudes toward finances should be changing also. Opening a dialogue about financial matters such as debt problems, spending habits, or budgeting challenging can benefit children who will form a relationship with money based on their parents’ habits. And, it also benefits the parents’ relationship by reducing the risk of divorce or separation and allowing them to set financial goals as a team.
Setting the stage for change
Couples who share money-oriented goals enjoy a happier relationship and are also more inclined to meet financial milestones. If you and your partner have difficulty opening up about finances, follow these steps:
- Set a date. Make financial discussions an event by setting a date night (or day) when you can both dedicate time to laying out the facts. Focus on creating a judge-free zone and don’t be afraid to set some rules beforehand so things stay civil.
- Write down goals. Bring a notebook and some pens on your date and separately, write down your financial goals. Exchange the papers and see if you have some common ground. From there, set some goals you can both agree on and rank them in terms of priority. Example, debt repayment and adding to savings might be a higher priority than planning a trip. The importance is striking a balance and finding common ground.
- Make a budget. Without a spending plan, money goes unaccounted and goals become more difficult to reach. Create a budget together that incorporates all household expenses, discretionary spending, and your dedicated goals. Gail Vaz-Oxlade details how a balanced budget should look with a Life-Pie diagram.
How to reduce debt as a couple
Carrying debt can push back goals and make it more difficult to meet financial responsibilities each month. Working together to pay down debt is a great way to increase financial literacy and build a stronger relationship. The Financial Consumer Agency of Canada is a great place to start when learning about how to reduce debt, manage money and build a budget that works. Calculators can help you set goals and tally up your debts, and modules and videos will demonstrate the best way to improve your finances and meet your milestones. Additionally, credit counselling services in Wetaskiwin can help you with budgeting and credit management strategies. A Licensed Insolvency Trustee can explain the range of options for reducing debt, helping you choose the option that best suits your circumstances. If you’re facing unmanageable debt, and LIT is the only debt relief professional that can assist you with formal debt solutions such as a consumer proposal.
Do you and your spouse talk about how to reduce debt and make financial goals together? Join the conversation by searching the Twitter hashtags #LetsTalkDebt #BDODebtRelief