Hid­ing se­ri­ous debt is not a harm­less se­cret

The Dallas Morning News - - Economy & You - BRI­ANNA MCGUR­RAN askbri­anna@nerdwal­let.com

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. Or say­ing you’re sick to avoid his aunt’s re­tire­ment party.

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 for your­self, says Kelly Luethje, a cer­ti­fied fi­nan­cial planner and founder of Wil­low Plan­ning Group in Bos­ton.

Un­der­stand your loans’ and credit cards’ out­stand­ing bal­ances, ac­com­pa­ny­ing in­ter­est rates and pay­off dates. That may help you gain some 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, like by the time you’ve hit the six-month mark.

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, for in­stance. 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 can build only by be­ing hon­est and trans­par­ent.

Broach the 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 main­tain­ing spon­tane­ity, all of which strengthen long-term re­la­tion­ships.

Cole rec­om­mends start­ing the con­ver­sa­tion with an “I feel” state­ment, fol­lowed by what you’re con­cerned about and what you need next. The Gottman In­sti­tute calls this a “soft­ened start-up,” and it lays a pos­i­tive foun­da­tion for hard dis­cus­sions. 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 of your debt. Are you spend­ing be­yond your means, or did you pay for school without any help from fam­ily? Has your be­hav­ior changed since you first built up a credit card bal­ance, or is spend­ing still an is­sue?

Then talk about how you plan to pay it off. Work on elim­i­nat­ing credit card debt first, for ex­am­ple. Credit cards gen­er­ally have higher in­ter­est rates than stu­dent loans. 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.”

Hav­ing debt doesn’t erase the fact that you’re the world’s great­est karaoke duet part­ner or ba­nana bread baker. Open­ing up about it and ask­ing for en­cour­age­ment to ad­dress it could bring you and your part­ner closer — and give you per­mis­sion to dream.

Bri­anna McGur­ran is a staff writer at NerdWal­let. Ask Bri­anna is a Q-and-A col­umn for twen­tysome­things or any­one else start­ing out.

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