The Best Ways to Get Out of Debt Before You Say “I Do”Apr 19, 2017
Right now, there are hundreds of couples looking forward to the day they say their “I do’s” in the coming months. But with all the wedding planning, personal debt management might not be on your mind. If you’re thinking about getting married soon but you or your partner are carrying debt, consider some of these best ways to get out of debt before you merge your lives and finances.
Learn about money management
If you have debt in your life, it can sometimes feel like you’re struggling to keep your head above water. Your priority before your wedding may be to make your minimum payments and cover your costs of living, breathing a sigh of relief at the end of each month when your payments are made. But it will greatly benefit both you and your spouse-to-be to take the time to learn a few debt reduction strategies. You might find out how to pay down your debt more quickly or efficiently — many Canadians admit they could benefit from learning more about money management.
Your personal financial situation is unique, so speak with a professional if you have questions about your finances. If you feel your credit has been affected, you can discuss credit rebuilding strategies, or talk about debt options that might be useful to you, like debt consolidation. Take advantage of the wide array of online resources and personal finance experts who write and speak about money management to help you eliminate your debt.
Set savings goals
Having money on hand so you can use cash (instead of credit) is key to avoiding debt. If you’re already in debt, don’t take more on by charging non-essential items to credit, or borrowing to cover costs. To get out of debt, start by determining your overall debt load and your debt reduction goals. Do you want to pay off a high-interest credit card? Are you anxious to pay off your student loan?
Once you’ve put those goals to paper you can create a realistic plan for achieving them. Paying down your debt should be a priority, but it’s useful to set other financial goals, too. If you know that you are working toward something — such as a vacation, a home, or starting a family — you may feel more motivated than if you feel like you are only working to get away from something (like your debt).
Likewise, having an emergency fund with six months’ worth of living expenses can help you avoid debt if an unexpected cost comes up. Unfortunately, Airdrie wasn’t immune to Alberta’s economic struggles in recent years, and many residents felt that in their finances. Officials are optimistic about the local job outlook as 2017 unfolds, but many couples are still experiencing lean financial times.
Start small but aim big
When you’re carrying debt, it can be intimidating to contemplate eliminating it entirely. But it is possible. If you have only a small amount of surplus income each month, you can still make an impact on your debt. If you have high-interest loans like payday loans or credit card debt, focus on paying those down first.
A method that some people find useful is the snowball method. Focus extra money to your smallest debt to pay it off entirely (while still making minimum payments on the others). That achievement can help motivate you to keep going. Then take the extra money you have (because you paid off a small debt) and put it towards your next debt. Continue this method until your debts are paid off in full.
Marriage can create exciting opportunities, but combining debts isn’t one of them. Rather than take debt into your marriage, consider finding your own best way to get out of debt before you tie the knot. Your finances, and your partner, will thank you.
How are you paying down debt before marriage? Share your strategies on Twitter. #BDOdebtrelief #LetsTalkDebt