Even with a decent income, many couples still struggle to pay off debt. It’s even harder if partners aren’t on the same page when it comes to money, causing anxiety and resentment.
One Nashville couple, married five years, has a combined debt of $562,000, although $500,000 of that is mortgage debt. Even though they make a combined income of $162K, the wife, Liz, is feeling overwhelmed by their inability to make any headway on that debt.
“We’re following your baby steps. We’ve been following it all year, but it doesn’t seem like we’re getting anywhere,” Liz, 30, told The Ramsey Show recently. “I don’t know what to do anymore. (1)”
The couple has no student loan debt. They only have $1,000 left to pay on his car (she’s already paid hers off), so the remaining $61,000 in debt is all credit card debt.
Almost a quarter (23%) of married couples in America don’t have any joint accounts, according to 2023 data from the U.S. Census Bureau. This share is up from 15% in 1996.
The agency points to a possible reason for this. Couples are marrying later than they did in 1996, so their individual finances may be more established. Or, they may decide to open joint accounts later, like when they have children.
But this can pose other challenges. It’s sometimes hard for couples to see their finances as “shared” even when they’re married. And it’s understandable that one person doesn’t want to take on another person’s debt — or be held accountable for it. If one person is a saver and the other is a spender, it could breed resentment and lead to a breakdown of trust.
A study commissioned by National Debt Relief found that three in five Americans have actually considered putting off marriage to avoid inheriting their partner’s debt, and more than half (54%) believe having a partner who is in debt is a major reason to consider divorce (2).
While a joint account can help — after all, it improves transparency — it can still cause friction if the couple isn’t on the same page about spending habits and priorities.
“Your system of getting out of debt is not going to work until both of you decide you’re going to get out of debt. He has not decided that,” Ramsey told Liz. “You have a marriage issue.”
Even if Liz’s husband holds most of that debt, it impacts both of them, especially if he’s racking up credit card interest — they’ll be in debt longer, which prevents them from pursuing other financial goals.
In this case, it appears that Liz’s husband is on board, since she said he cut up his credit cards. But that gesture doesn’t seem to be enough for Liz, who still feels hopeless.
While Liz’s husband made a grand gesture, they need a plan of attack, which starts with a budget and debt reduction plan — and a willingness for both partners to stick with it.
“You make $162,000. You only need $62,000 to pay all this off,” Ramsey told Liz. If they live on $100,000 a year, then they’re “debt-free in one year — voila. It’s fairly easy. It’s $5,000 a month.”
The 50-20-30 rule is a common budgeting method (there are a few variations on it), where you spend 50% of your after-tax income on needs (such as mortgage/rent and essential living expenses, including car payments and minimum debt payments); 20% on debt reduction and savings; and 30% on discretionary spending.
In Liz’s case, they also pay for day care. The average cost of child care in Nashville is $2,685 per month, so that’s not insignificant (3). It could also be more challenging for couples with student loan debt and car payments, which may require a longer-term “get out of debt” strategy.
In Liz’s case, they could reduce their discretionary spending and put more toward debt.
Her husband may also want to consider a balance transfer credit card, which would allow him to move the balance from one or more high-interest credit cards to a new card with a 0% interest promotional rate. However, they’d need to be confident he could pay down the debt during the promotional period (and not rack up more charges).
They could also look for ways to pay down that debt faster, such as putting their tax refund toward the debt, selling assets they don’t need or getting a side hustle. They may want to set up a joint account for essentials, including their mortgage, daycare and utilities, then agree on how much each will contribute to the credit card debt each month.
However, if your spouse has problems with creditors, you may want to be cautious. Late or missed payments on joint accounts could impact both of your credit scores. And if your spouse is an authorized user on your credit card (and racks up charges), you’re legally responsible for paying it back, not your spouse.
If your spouse has a gambling problem, or you suspect financial infidelity, you may want to seek help from a financial counselor.
If Liz and her husband are able to clear their debt in the next year, they may want to create a joint emergency savings account to help them with any unexpected expenses. But they’ll also want to keep the lines of communication open and adjust their budget accordingly to meet their financial goals — together.
