Debt consolidation before marriage might not be the sexiest topics to talk about with your loved one. After all, debt is not really something that you want to associate with your big day. In between the venue selection, food provider, and your long guest list, consolidating your debt payments might not be a top priority. However, your finances is an important aspect of your relationship – so any debt that you individually owe deserves both of your time and attention. If you want to start on a clean slate, you might want to sit down and discuss what you will do with the multiple debts that you owe.
As Pew Research shares, almost half of adults in the country are married. Unfortunately, not all of them stay married. Most of the time, one of the reasons why couples fall apart is because of financial issues. This is why you need to make sure you eliminate issues that might come in between you and your future spouse. The better start you have, the longer your relationship can last.
Part of this is making sure that you have the finances all figured out to pay for wedding expenses. The total wedding cost can be quite an amount. The cost of the venue and suppliers can make a big dent in your savings. You also need to look ahead and make sure that you have money matters figured out when you start living under one roof.
This is where debt consolidation before marriage comes in to help you manage your finances better. To ensure that you understand this debt relief option, here are the pros and cons of consolidating your debts before you tie the knot.
Why you should consolidate debt before getting married
Here are some of the benefits you can expect from a debt consolidation program.
You put some order into paying down your debts
Sometimes, having a structured repayment plan is all it takes to be serious about your debts. If you are heading into marriage with multiple debt accounts under your name, it can take its toll on you in so many levels. One of the best ways to manage this is to consolidate your payments under one account. This way, you can monitor your accounts better and be in better control of your monthly payments. You free up time to focus on wedding details and make it one of the best days of your life.
You start improving your credit score
Your credit score can affect the financial opportunities that you can grab with your spouse. This is why you want to put everything in order before you exchange your vows. It is not enough that you take a look at your credit report and manage errors that may exist. One of the best ways to improve your score is to make your payments on time every time. Consolidating your debts can give you better control over your payments. You might be planning to take out a mortgage loan after the wedding and a high credit score will help you get the best deal out of the loan.
You get to budget better for wedding expenses
Debt consolidation before marriage can help you and your partner see your expenses clearly. This will help you budget for your wedding better.
Putting together your wedding expenses can be a mix of a lot of different things especially when you plot out where you will get the money to pay for it. If you have enough savings to pay for everything in cash, then good. However, if you will resort to using your credit cards or even borrowing money from different sources, you need to know how much you can afford to pay back every month. Consolidating your debts can give you a better view of your finances especially how much you can allocate to pay back wedding expenses.
Possible pitfalls of debt consolidation before marriage
Debt consolidation before marriage can also bring in its own share of problems to the relationship. Here are some of them worth looking into.
It would be a problem if you do not end up together
A research shared by Best Life Online explains that about 20% of engagements do not end up in front of the altar. If you consolidate your debts with your soon-to-be-spouse, this can be a problem when it comes to paying back the new loan.
However, if you consolidated your individual debts separately, it should not be a problem at all. If you really want to be sure that everything will work out, consolidate your own debts and your partner should do the same for their own list.
Missing payments because of a false sense of debt freedom
Another disadvantage of using debt consolidation before getting married is the chance that you fall under a false sense of debt freedom. Having this feeling while you are in the midst of spending for your wedding can be dangerous. It might make you more confident to use credit once more to pay for everything.
You have to remember that debt consolidation is only a repayment tool. It changes the payment structure of your debts. Although you paid off your multiple debts, the actual balance is just transferred into another one. You still owe the same amount of money. As long as you keep that in mind, you should be cautious enough to keep your spending minimal.