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Why tackling debt is important in a marriage

On Behalf of | Dec 24, 2018 | Divorce |

In a study by Fidelity, around half of all couples said they were in debt when they entered their partnerships. Nearly half disagreed about who was responsible, and 40 percent reported that their relationship was negatively affected by the debt. Washington couples may want to prioritize paying down their debt, and if this is not possible, they might want to consider creating a pre- or postnuptial agreement that specifies their financial responsibilities.

Making an agreement of this type is one way that couples can better manage their finances. These agreements do not just prepare couples for divorce. They also open a conversation about money that could be helpful to the couple in moving forward. Couples may also want to work with a financial planner or another professional to talk about strategies for paying off debt. For example, they will need to decide whether they want to use the snowball or avalanche method. With the first method, they would pay off small debts first. This can give people the psychological satisfaction needed to continue the process. With the second method, they would choose the debt with the biggest interest rate.

Working with a professional may also help couples communicate and plan better for their financial goals. For example, they may find they need to choose between paying for day care for their children and buying a home.

Unfortunately, these conversations may not be enough to prevent a divorce, and a split may involve even more conversations about money. Even if a couple has a pre- or postnuptial agreement, it might be challenged in court if one spouse later feels the agreement was unfair in some way. Negotiations over property division may be complex in a high-asset divorce in which one or both spouses own businesses, real estate, investments and valuable collections.