Debt is not a secret you should keep from partner
I’m overwhelmed by student loan and credit card debt, and I’m embarrassed to admit it to my partner. Should I come clean?
Some secrets are harmless, like eating the last slice of your partner’s favorite cake.
But hiding thousands of dollars in debt does not fall into the “harmless” category.
While having debt is just one piece of your identity, it could directly affect your partner also: Maybe you’re unable to contribute to joint savings or keep up with your share of the bills, or you’ll have a harder time qualifying for a mortgage as a couple.
The debt might not come as a surprise if, say, your partner already knows about your lavish sneaker-buying habit. But the longer you wait to divulge the details of your financial stress, the more betrayed your beloved may feel when you eventually do it, says Don Cole, clinical director of the Seattle-based Gottman Institute, which conducts research on relationships.
“It’s better to be honest than to get caught,” Cole says. “The relationship is going to be able to repair much better from a shared problem than one that’s discovered.”
Gather the facts
First, nail down the specifics of the debt, says Kelly Luethje, a certified financial planner.
Understand your loans’ and credit cards’ outstanding balances, accompanying interest rates and payoff dates. That may help you gain control, and it’s also the first step toward developing a plan to get out of debt.
Time it right
Confessing your debt balance isn’t first-date fodder. Tell your partner the truth once the relationship gets serious.
At the very least, get everything out in the open before you decide to move in together. At that point, your debt will have an immediate financial impact on your partner. A credit card balance at the top of your credit limit means a lower credit score. And that could make getting an apartment together challenging.
If you’ve been together for more than six months or you’re already shacked up, don’t panic. But prepare to spill the beans soon. Cole explains it this way: After the fun and excitement of first falling in love, the next step is to make sure we can be our true selves with our partners.
“That is an essential phase in developing a lifelong, happy relationship,” he says. And it takes trust, which you build by being honest and transparent.
Broach subject gently
Ask your partner to set aside time to talk. Pick a weeknight rather than a Friday or Saturday, says W. Bradford Wilcox, director of the National Marriage Project at the University of Virginia. He says weekends should be reserved for having fun, reconnecting and spontaneity.
Cole recommends starting the conversation with an “I feel” statement, followed by what you’re concerned about and what you need next. You might say, “I worry about talking to you about money, but because I love you, I need to tell you about my finances.”
Explain the circumstances. Are you spending beyond your means, or did you pay for school without any help from family? Has your behavior changed, or is spending still an issue?
Then talk about how you plan to pay it off. Work on eliminating credit card debt first. And think of coming clean as a positive step.
“Debt is stressful, and it takes away future options for people,” Wilcox says. “It robs you of a horizon, of the possibility to dream financially.”
When Volkswagen developed a smallish SUV to meet the segment’s growing demand, it faced a challenge: It had no name.
A car’s name is crucial — it defines the car and can provoke an emotional response among consumers. It will be front and center on TV ads and billboards. Above all, a car’s name is brand equity, its very identity. A Mustang is a Mustang, with or without “Ford” in front of it. A Cherokee is a Cherokee, even if it’s always a Jeep.
VW sought the public’s input — a tricky proposition. Its unorthodox approach included a poll, which produced a stunning response. About 350,000 readers of the German magazine Auto Bild cast votes. Among the names on the ballot: Namib, Rockton, Samun and Nanuk.
The winner was Tiguan, a mélange of “tiger” and “iguana.”
Sexy? Perhaps not. But it stuck, and the Tiguan has stuck around. The Tiguan, which first went into production in 2007, has earned a redesign for 2018. And when a model doesn’t quite meet expectations, its replacement in the lineup often gets a new moniker: The Tiguan’s bigger, older sibling — the Touareg — has been replaced in the United States by the new Atlas.
Every year, automakers roll out a new crop of cars, trucks and SUVs. For 2018 alone, in addition to the Atlas, there are the Stinger (a sport sedan from Kia), the Velar (a new addition to the Range Rover lineup) and the Urus (a Lamborghini billed as the world’s fastest SUV).
“You try to create a language and a name that taps into the psychology and sells the product,” said Robert Pyrah, the head of strategy at the London-based creative agency Brandwidth. Pyrah is an outsider in the insider-intensive automotive industry, but his research, delivered to companies like Toyota, General Motors and Volkswagen, is crucial when it comes to naming — and selling — a vehicle.
“There’s a whole set of strategic considerations that come in,” he said. “It’s thinking how the brand should be positioned in the marketplace, identify the car’s essence.” Some clients have specific goals: “They’ll say, ‘We have a new SUV, we want the
As average credit scores for Americans continue to rise, the question for many becomes how to use their excellent credit rating to optimize their lives without borrowing money or adding risk.
Capitalizing on great credit doesn’t have to mean incurring great debt; instead, it’s about using your money reputation for a financial advantage.
“In the right hands, a good credit rating can be a real asset,” said Jordan Goodman, editor of MoneyAnswers.com and author of “Master Your Debt.”
From higher credit card bonuses and rewards to lower insurance premiums and interest rates, hundreds or even thousands of dollars’ worth of goodies are available to those with great credit. And they don’t need to borrow a dime.
Use your levrage: Nearly 40 percent of Americans have excellent FICO credit scores of 750 and above, according to credit scoring company Fair Isaac Corp. Half of those have scores of 800 or higher, considered “super-prime.” They get the best lending terms and lots of special treatment.
Leveraging credit to access these benefits works best for people with responsible financial habits, like paying bills on time, every time, and paying monthly name to target 30-somethings with two children.’ ”
Pyrah and his team will come up with about 30 available names, and then meet with the manufacturer’s marketing team and product planners to trim the list, which will be presented to senior management. The whole process can take a year or more.
One obstacle that branding experts in the car industry — and their clients — face is the dwindling number of names that are still free to be trademarked. That credit card balances in full.
“You want to make sure you have discipline,” said Roger Wohlner, a personal finance writer and financial planner in Arlington Heights, Illinois.
If that’s you, here are ways to use a great credit rating:
Shop your insurances: It’s a good idea to regularly shop for better insurance rates; you can often find identical auto and home coverage for less. When you have great credit, you’ll get even better rates .
Snag credit card bonuses: The rewards credit card market is sizzling, with generous sign-up bonuses and rewards for consumers who can qualify.
With a travel credit card, for example, you might be able to use points or miles to pay for a trip if you can meet the card’s minimum spending requirement. It’s not can lead to questions from the company’s leaders, Pyrah said.
“If you should present an uninvolved person on the board a list of names that are coinages, or made up, or futuristic, they’re going to go, ‘Well, why can’t I have Explorer?’ ” he said.
Then there is the danger of an unintended meaning, even after careful vetting. In 2003, the Canadian division of General Motors was about to introduce a Buick model it had christened the LaCrosse. It became about “churning” cards, or opening accounts to get bonuses and then closing them. It’s about not hesitating to apply for a lucrative card that meets your needs. If the card has an annual fee, make sure you extract more value than you pay.
“If you are fiscally responsible and enjoy playing the game to earn these sign-up bonuses, then you do have a real opportunity to win at the expense of credit card companies,” said Byrke Sestok, president of Rightirement Wealth Partners in White Plains, N.Y.
Lower your interest rates: High credit scores should mean low interest rates.
Make sure you’re paying rock-bottom rates for loans, especially big-ticket items like your mortgage and auto loans. If not, you can refinance. apparent shortly before launch that in Québécois youth culture, LaCrosse is slang for masturbation. The name was changed.
Mark Gillies, a spokesman for Volkswagen of America, said Volkswagen often announces a name in advance of the vehicle launch “to make sure that if there were objections, we’d know about it.”
Many manufacturers prefer following patterns they already have in place. Volkswagen will often name models after winds (Scirocco, Passat, Bora). Lamborghini uses the names of bulls. (The Urus is named after the ancestor of modern cattle.) Beyond the Mustang, Ford embraces the letter F: Flex, Focus, Fusion, Fiesta.
Because so many names already are taken, branding agencies often try to push the envelope. Take the Nissan Qashqai, a crossover branded in the United States as the Rogue Sport. “It’s such a weird name, it flummoxed people at first,” Pyrah said. “Now it’s cool.”
When it comes to signing the deal on the showroom floor, however, the car name isn’t necessarily what pushes the buyer’s buttons.
“The product has to be king,” Pyrah said. “At the end of the day, I tell clients that as long as the name isn’t bad, you can get away with most things.”
Apply for retailer credit cards: Signing up for a credit card at the checkout counter has risks if you don’t pay in full because interest rates are usually high.
But if you’re diligent about paying bills, why not apply for a card to get 15 percent off a $2,000 furniture purchase? It’s an easy $300. Diligence is key. “Merchants are very good at offering carrots, but you slip up for one microsecond and they bang you over the head,” Goodman said.
Exploiting your great credit rating in these ways can actually improve it over the long run, assuming you continue to pay bills on time, because credit scoring formulas reward responsible use of credit.
Just space out applications so the small dip in your scores can disappear before the next, and be wary of diluting your average age of accounts.
Even if you take none of these actions now, you can rest easier knowing you’ll have plenty of options when a financial crisis hits.