Whether you decide to pay off the loan entirely or reduce the amount you owe, the first and most important step is to take the time to sit down and talk about the debt with your loved one. Gather your credit score, credit history, and savings information.
You should mention the details of your debt, such as the cause of the debt and how much you owe. It would be an appropriate time to discuss spending patterns as well, make it clear to your spouse if you typically spend money on material items or if you save your money. Under solemnisation laws in Singapore, tying the knot doesn’t make you responsible for your spouse’s previous debt however in marriage you agree to compromise with each other’s financial habits and philosophies. So, get ahead of the game and start having financial discussions early on.
Now you have broken the ice and discussed your financial situation, it is time to figure out a plan to rid yourself of this debt. You may find that tackle this on your own, or maybe your soon-to-be husband is willing to help you out.
Either way, make it clear to him how long it will take you to pay off the debt. Along with how you plan to do this, maybe by cutting back on expenses, refinancing your student loans, or getting a second job. Take the time to use your resources such as Excel spreadsheet to organise your finances and to monitor your progress. You should consider taking the steps to decreasing your debt even before you get hitched.
It sounds harder than it seems, but you will have to stick to your plan and avoid the frequent temptations to spend money. Unfortunately having a slight change in lifestyle may seem overwhelming at times but remind yourself how it will benefit your new life.
Singapore offers an endless abyss to spend your money however, you and your loved one can take part in other activities. Trying new recipes and sharpening your culinary skills, being outside relaxing or exercising, attending free or cheaper events will be less straining on your budget and will not only bring you closer to your debt-free goals, it also bring you closer as a couple. Keep in mind there will always be the potential chance for emergencies to sidetrack your plans.
Paying off debt along with everyday life can be very stressful; it is important as a couple to focus on the positives. Together, set milestones and reward yourselves with a date night, just make sure that the celebration doesn’t cost too much and take you off track. After all, having little or no debt has a lot of perks for your future, it will help you when budgeting for the big day or when the two of you decide to buy a house.