Agree on Priorities with Your Spouse
Without consensus between you and your spouse, making progress on your debt will be very difficult. Even if you have individually volunteered to do all the work to get the family out of debt, if you haven’t really talked it over with your spouse and agreed on the priority and implications, success will be very hard.
Don’t believe me? Maybe you know a horror story- but here’s one if you don’t. A friend of ours recently committed to paying off debt after realizing that her husband hadn’t paid sufficient attention to the family finances and they had run up six-figure credit card debt. She took over the finances and even took away his cards. But a few weeks after she did so, he came home with $500 of exercise clothes. She couldn’t believe it. She thought they had agreed to focus on paying down debt.
Despite being on the brink of bankruptcy, they simply never agreed to priorities. Our friend has vowed to cut her husband off from all opportunities to spend, but we think it would be easier if they could simply agree. Here are a few steps that can help:
- Discuss your current debt situation, including your total monthly debt payments
- Discuss how debt impacts your lives. What does this keep you from doing? What goals could you pursue if you didn’t have debt?
- Identify why you have debt? Have you had an emergency? Are you overspending? What elements of spending are driving up debt? Identify behaviors that you need to change.
- Compare your reasons for debt to the future goals that you would like to attain
- Discuss how each of you feels about these competing goals and the tradeoffs you will have to make to pay off debt to get to your future goals. If you’re not bought in, keep talking until you find a solution. For example, if getting out of debt would require that you forego a vacation, do you both agree on the priority? How about clothes? Golf? New cars? You get the picture-this one can be tough, especially if one party feels like they’re sacrificing more.
- Agree to work together to reach your goals.
Completing this step isn’t easy. You may find that the first attempt ends with finger pointing as you identify the causes for debt. A second session may end abruptly because you don’t feel that the sacrifice is being borne equally. If you can’t make it through in one session, pick it up in another. Just don’t give up. You’ll find that this is a process that never ends if you’re doing it correctly-you should always collaborate and prioritize financial decisions with your partner.
After doing these steps, you should know why you’re in debt and how this is affecting your ability to reach future goals. You should have agreed on the relative priorities of your goals and how paying off debt fits into that picture, and based on this, a rough plan for how you might start to pay down debt. If that’s the case you’re ready to start setting goals for getting out of debt.
Communicate Your Goals to Your Children
Once you and your spouse have discussed your priorities and have talked through the trade-offs, it’s time to talk to your children. Your children may have become accustomed to a lifestyle that will now change and this change may be disorienting for them. To help them, talk through the situation. The following talking points may be helpful:
- Explain clearly that you have set a goal to reduce debt your rationale for doing so.
- Lay out the changes and how it will impact your children
- Ask them for their concerns. Acknowledge their concerns and discuss how these changes will impact them.
- Discuss how they can help. Ask them for their suggestions on what they can do.
- Reaffirm that you love them. Make them feel like they are part of the team.
With all members of your family focused on your goal of reducing debt, you’ll find that the task becomes much easier.
Scott Crawford is CEO of DebtGoal.com, a do-it-yourself system for getting out of debt and lowering your interest costs. DebtGoal.com incorporates all of the techniques discussed in this post and can help users understand and get visibility to and manage their debt finances.
Tags: family, goals, Marriage, set priorities, Setting goals
