Are you hiding a maxed-out credit card or a tarnished credit history from your other half? Each person brings something unique to a relationship and sometimes that can include debt.
According to TD Canada Trust research, some couples admit to telling the odd white lie when it comes to money. In fact, one-in-five Canadian couples (22%) admit they are not always honest with their partner about finances.
Opening up about finances can be tough, but Raymond Chun, a senior vice president at TD Canada Trust, says couples considering saying 'I do' to joint finances need to focus on transparency first. And this includes dealing with debt.
"There are many benefits to combining finances with a significant other, from simplifying record keeping to lowering a household's overall tax burden," Chun said. "At the same time, a new partner may also bring to the relationship old debts or a bad credit history, which can have serious implications on a couple's ability to buy a car or home down the road."
According to Chun, the best way to start the debt dialogue is having a formal and direct conversation. Discuss each partner's finances and set ground rules for the future together. Try to refrain from being judgmental or defensive and work together to create a game plan to pay off debts faster.
"The important thing to remember is that debt doesn't have to be a deal-breaker," said Chun. "Some debt can actually help people achieve their financial goals. What matters is that debt is used responsibly and couples have a plan in place to pay it back."
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