Tag: financial goals

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Is My Partner’s Debt Mine after we Marry?

Marriage and Debt

Exchanging vows is exciting, but when reality kicks in and you have to combine your finances, you might wonder what you’re responsible for regarding your spouse’s finances.

If your spouse entered the marriage with a lot of debt, is it now your debt, or are you off the hook?

Marriage and Debt

The good news is that when you marry your spouse, you don’t marry their debt.

Phew!

If your spouse entered the marriage with debt solely in his/her name, it does not affect you. However, once you are married, different scenarios can affect what you owe.

How do you Get Joint Debt?

So how do you become responsible for your spouse’s debt? Here are three scenarios.

You Borrowed Debt Together

This is a common scenario. For example, if you and your spouse borrowed money together to buy a house or car or open a credit card together, you are both responsible. Likewise, if both spouses are on the application and the creditor used both spouses’ information to approve the loan, you are both equally responsible.

If one partner is responsible for paying the bills and misses a payment, it negatively affects both partners’ credit.

You Were a Co-Signer

If you co-signed for your spouse’s debt either during the marriage or before, you could be responsible for the debt. When you co-sign, you say you’ll take responsibility for the debt if the application doesn’t make the payments.

A co-signer helps the applicant get approved for a loan. When you co-sign, you let the lender pull your credit and use your income to help qualify for the loan.

It doesn’t matter if you are married or not; the debt is yours if the applicant doesn’t pay it because you agreed to the terms.

You Guaranteed a Loan

If you guaranteed a loan for your spouse before or after marriage, you could be responsible for the debt.

You aren’t on the application when you guarantee a debt as a co-signer. Instead, you are on there to guarantee the applicant’s past credit history and mistakes are taken care of, and they are good to handle the debt.

Like a co-signer, if they don’t pay the debt, you become responsible for it. So there is a risk in guaranteeing a loan, but if you know your spouse is good for the debt, you may feel comfortable doing it.

Final Thoughts

Handling your spouse’s debt can feel overwhelming, even if you are not responsible. If you join finances, you might worry about where your money goes or how you will achieve your financial goals.

If you feel like you are in over your head in debt, or don’t know how to handle your spouse’s debt, consider a free credit counseling consultation. You will learn your options on how to handle the debt and then how to handle your finances moving forward.

Rather than blaming one another for the debt or letting it ruin your marriage, let’s look at everything and help you move forward!

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Are you and your Partner Financially Compatible?

Credit Counselling and Marriage

When you said ‘I do,’ a big part of that commitment had to do with your finances. Whether you had the ‘money talk’ before you got married, or you are finding out the hard way that you are not on the same page financially, there are ways to get your marriage and finances back on track.

It all starts with determining if you are financially compatible.

Determining your Financial Compatibility

Every couple is different, but we see three common scenarios with couples and their finances.

The One Person Has Control Marriage

In some marriages, one person takes complete control over the finances. They pay the bills, balance the checkbook, and handle investments. The other partner generally does not know much about the money and, if asked, would not know where the checkbook is or how much money they have.

While this might seem ideal, especially if you do not like dealing with finances, both partners should understand their financial situation and have a say in how the money is handled.

The Couple with Opposite Habits

Do you and your spouse have different views about money? For example, maybe you are a spender, and he is a saver or vice versa. The key is that you are not on the same page, and your differing habits are bound to cause struggles.

Some couples with differing habits have separate accounts. For example, they don’t keep their money together, and instead, they split the bills, so each partner is responsible for some of the household bills, allowing them to handle their money the way they want.

The Couple that Ignores their Issues

Some couples are on the same page; they know they have financial struggles but won’t verbalize it or change their habits.

These couples continue with their spending habits and living life however they want, without considering how it might affect their financial future. People with these habits often have deep-seated thoughts about money that comes from their family, and the habits are hard to break.

Getting on the Same Financial Page

So how do you get on the same financial page with your partner? If you are on the same page, and it’s not a good one, what do you do?

The key is communication.

You must talk to one another about money. Open up about your habits, worries, and your financial goals. Compare notes and see where you stand. If you don’t see eye-to-eye, try to find a middle ground to meet somewhere in the middle and achieve financial harmony.

This may seem overwhelming at first, but go slow. Set up ‘money dates’ monthly and only talk about money. This way, you both come to the date knowing what to anticipate and can give one another undivided attention.

Final Thoughts

If you and your partner cannot get on the same page, or if you can but cannot fix your finances, consider credit counselling. With a free consultation, you can see what steps you can take to improve your financial situation and get on the same page to reach your financial goals.

 

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How the Debt Snowball Method Works

Snowball Debt Management Method

If you have a lot of high-interest consumer debt, it is important to pay it off quickly. The high-interest rates are an opportunity cost for savings and investing in your future. In addition, the faster you pay your high-interest debts off, the more money you will have for other priorities.

It can seem overwhelming to pay off your debts, but at Creditaid, we are here to help make it easier.

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How to Live on a Living Wage with the New Minimum Wage

The new minimum wage will increase to $15 an hour by October 1. This is good news for the people of Manitoba; however, is it enough to live on the necessary living wage given the inflation rates?

The larger your family is, the harder it is to live on minimum wage, even the new minimum wage, but here are some ways to make it possible.

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Back to School on a Budget

It’s that time again, can you hear the bells ringing? That’s right, it’s time to head back to school. This year more than most represents a return to the familiar after the last two years of uncertainty and continually changing requirements.

School brings with it the need for new in the form of supplies and clothing which can really add up and stretch your budget to the max. With the proper planning, going back to school doesn’t have to cost a fortune as retailers understand and offer some great deals to help you save. You’re probably wondering how you can possibly navigate all these sales and take advantage of savings without getting pulled into buying what you don’t need while wondering how you are going to afford it all.

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Keeping your Financial Goals

Financial Goals

Setting financial goals sounds great when you say them, but what about achieving them? If you don’t know how to execute the steps to reach your goals, they are just words. Whether you’ve fallen into the ‘New Year’s Resolution’ trap, or you are turning over a new leaf, here are X simple ways to keep your financial goals.

Make your Goals Achievable

It doesn’t do any good to set goals you can’t achieve. Instead, set goals you know you can hit. Even if that means setting baby-step goals so you can see your progress, do it. Just make sure each goal can be measured.

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Understanding the Millennial Wage Gap

Millennial Wage Gap

The millennial wage gap is a real problem for those ages 25 – 40. Not only do they make 20% less than Baby Boomers at their age, but they also have fewer consistent paychecks because of the Recession of 2007 and now the pandemic. With more people freelancing, regular paychecks feel like a thing of the past for most millennials.

The largest issue this causes for millennials is a delay in homeownership, aka achieving the American Dream. With lower wages, higher debt, and less consistent paychecks, only 42 percent of millennials own a home by age 30 versus 48 percent of Gen Xers and 51 percent of Baby Boomers.

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A Habitat for Humanity Home Gives Families a New Start

Creditaid is proud to support various community initiatives and has been an important supplier to Habitat for Humanity Manitoba in their support of low income working families for many years.

As credit counsellors, we have the skills and experience to aid this wonderful charity by providing budget strategies to new Habitat homeowners to help them prepare for home ownership and budget effectively for a lifetime of financial success.

The financial education they receive helps to instill a sense of accountability and pride in their new home ownership status.

We are happy to be part of the Habitat for Humanity family, and seeing videos like this one makes us even bigger fans!