How to Tell When it’s Time to Talk About Reducing Your DebtApr 21, 2017
With consumer insolvencies on the rise and more and more bankruptcies being filed in the province of Alberta, it’s time to start focusing on reducing consumer debt. It’s also time to start talking about how to reduce debt with your spouse or partner. Unfortunately, talking truthfully about finances is a topic many Canadians choose to avoid, especially with their partners. Here are three signs that it’s time to start talking about how to reduce your debt:
You aren’t on the same page
In order to effectively reduce debt, it’s important that both partners have a clear understanding of the amount of household debt they carry, as well as the amount of time and money required to repay this debt. Regular discussions are therefore key in order to ensure that both partners are on the same page.
If you feel that you and your partner are not on the same page when it comes to your finances and debt, make talking about your debt a top priority. Set aside a time that works for both of you and create a list of all the debts owed, as well as the interest rates on each of them. Once you both have a clear understanding of your debts, you can talk about your debt priorities and create a plan that focuses on how to reduce debt.
To ensure you stay on the same page, you may also want to schedule regular financial discussions. You can even add a little fun to this process by referring to it as ‘financial date night.’
You are fighting about money and debt
Quarrelling about debt is a clear sign that there is a miscommunication. It’s also a clear sign that it’s time to have rational discussions focused on reducing debt and finding financial stability.
When discussing debt with your partner, remember to avoid laying blame. Instead, work together to create an effective plan that will help to reduce the debt you owe and the stress associated with these debts. Your plan may include implementing a family budget in order to keep track of your spending or consolidating your debts to minimize your interest payments and repay your loans faster.
You are worried, anxious or stressed out
Worry, anxiety and stress are clear signs that it’s time for a conversation on how to reduce your debt. Although this conversation may initially be between you and your partner, it may also be a good idea to speak with a debt help professional. Depending on your situation, a debt help professional, such as a Licensed Insolvency Trustee (LIT), can help you understand the various debt relief strategies available to you, including debt consolidation, filing a consumer proposal or filing for bankruptcy. An Alberta LIT can also help you determine which strategy is the best financial fit for you and your partner.
Determining how to reduce your debt can be tricky, but talking with your partner about money and debt is the best way to ensure that you are both on the same financial page. It also allows you to create a plan of action moving forward that can help you to reduce debt and create financial stability.
Do you discuss how to reduce debt with your partner? Join the conversation and share your thoughts with BDO Camrose using the hashtags #BDOdebtrelief and #LetsTalkDebt.