Bayport Blog

Why debt consolidation loans can be the perfect wedding gift

When planning your wedding, spend at least as much time dealing with your debt and finances as you do thinking about décor and food. Debt restructuring before you say “I do” will make life after the wedding much easier.

The run-up to a wedding can be stressful with lots of decisions to be made and lots of money to be spent on creating the perfect day. It is easy to fall into the trap of thinking – and saying – that we will deal with non-wedding issues once the big day is behind us and our life together begins.

This is not a good idea, especially not as far as your finances are concerned. Money remains one of the biggest sources of conflict in marriages, and one of the major reasons why couples get divorced.

The best time to talk about money, especially debt, is long before the wedding. Chances are that the two of you will have to pay at least a portion of the wedding expenses, and you have to agree on how that will work. More importantly, however, you need to understand each other’s financial position. For instance, if one of you has a lot of debt, that burden will become part of your marriage. If both of you are struggling with debt, the problem might become even bigger when you reinforce each other’s bad money habits.

Let us look at some practical steps you can take to avoid starting your marriage off on the wrong foot by bringing financial baggage into it.

1. Talk about money. As soon as you’ve decided that this relationship is serious, make a money date to talk about your finances. Discuss how much you earn, what all your monthly obligations are, how much debt you have, how much you save, and whether or not you have an emergency fund. It is very important to understand how your partner thinks about and deal with money.
2. Agree on how you will manage your finances as a couple. For instance, do you put money for entertainment into a kitty? When do you use cash and when do you buy on an account or credit card? And how will you save for big expenses, such as a holiday or deposit on a home for you to share? The best way to manage your joint finances – from planning to tracking spending – is with a budgeting tool.
3. Decide how to pay off debt and how you will deal with future debt situations. A good way to start this conversation is for both of you to get a copy of your credit health reports. Make sure that all the information on the reports is correct and identify the red flags, such as late payments, old accounts that are still open, and how much of the credit available to you is currently being used.
4. If one or both of you are heavily indebted and in arrears, look into debt consolidation loans. When you combine loans and take out one bigger loan to settle them all, you can save on admin fees, bank charges, and even interest if you get the consolidation loan at a better rate. Also, most credit providers will give you a settlement discount for paying off your loans early.
5. Talk about money – again. The more serious your relationship is, the more often you have to talk about money. These discussions are not meant to be stressful arguments; rather see them as an opportunity to safeguard your relationship, to encourage each other to stick with healthy money habits, and to celebrate financial milestones, such as settling a debt or buying an asset.

In a relationship and a marriage, your money is never yours alone. One person’s financial decisions almost always have an impact on the other person, especially when you have children or other dependants to look after. Therefore, it is important to start off on a clean financial slate.

For more information on debt consolidation loans visit:

https://www.bayportsa.com/products-services/debt-consolidation/