Call Us!

(844) 845-4219

How to Tell Someone You’re in Debt

A man about to his gf he's in debt

Do you need to tell someone you’re in debt, but are afraid of their reaction? Honesty and trust are vital in a healthy relationship. If you’re in debt and hiding it from your partner, family, and friends, you’re only ignoring the inevitable. Sooner or later, they’re going to find out about your debts and feel betrayed. Wouldn’t you rather tell them on your terms?

Here’s how to talk openly about your debts with those you trust and solve your debt situation.

Set Up The Money Chat

Avoid bringing up the topic of money out of the blue. Instead, start the conversation by setting up a time to talk about your finances. Tell them how important it is to you that they know what your financial situation is, good and bad and that you should both make time to talk about it. This way, the other person has time to prepare their financial information to tell you too.

They might have some considerable debts and may need time to figure out how to tell you about them. Have an afternoon chat, preferably on a day when you’re both off. Try not to do it during an evening when you both have stuff going on the next day.

Here are some no-fail ideas on how to talk money:

  • Write a letter

If words aren’t your cup of tea, sometimes writing a letter is a good place to start. Even if you choose not to give this letter to your partner or decide to read it aloud to them, you are on the right path. Try to include your amount, what caused the debt, your plan of action, and suggest a time you can talk further if they aren’t ready to so now.

  • Book a brunch date

If talking finances seems boring, plan to make a brunch date out of it. Have a discussion about financial goals, financial fears, your family values regarding money, your successes with money, and the top three lessons you have learned from any debts. You may learn something new about your partner, including that you both value similar ideas when it comes to personal finance.

Admit You Have a Debt Problem

Repeat after me, “I am a spender.” Knowing you have a problem and admitting you have it are two different things. The latter is the first step to recovery. You may not be a shopaholic but, for some reason, your spending is not under control.

You are now ready to get the help you need from your support system, friends, family, or your partner.  It may be scary, but these people care about you and only want you to be your best self.

Rember, just because you have a problem with debt doesn’t mean you’re a bad person, but by ignoring it, it’s only going to get worse. It’s best to come to terms with your debt situation before moving forward.

Be Open and Honest about your Debt

Being open and honest isn’t easy, especially if you’ve been hiding your debts and bad spending habits from a loved one. Once you’ve admitted you need help, the next step is to come clean with those you trust. In my experience, it’s always good to deal with the bad news first.

How much debt are you carrying, and what kind of payments are you making every month to pay it off? It’s also important to explain how that debt came to be. Was it student debt, or was it consumer debt racked up on a credit card or loan made for a business decision that didn’t work out.

Your partner deserves to know what your attitude is when it comes to borrowing money. It’s important that you and your partner both understand how each of you is working on getting your debt down.

Your family should also be asking pointed questions. Be willing to share your bank statements, bills, credit card statements, and anything relevant. That way, it’s out in the open, and you can move forward knowing you’ve come clean.

Income, The Budget, and Savings

Salary, savings, and debt are the three bits of financial information that help you determine realistic financial goals for your future. Of course, knowing where your money goes is crucial to getting out of debt. But equally important is planning for your future.

Where does your money go? Sit down with your support team and make a plan. Take your last 3 months of bills and figure out your expenses.

Is there anything going into savings? Can you cut back on your bills somewhere?

Once you know where your money is going, write a plan for where you would like the money to go. Nothing long-term. Just start with a one month, try a 50/30/20 plan if you’re feeling overwhelmed.  Then, as debt goes down, you can reallocate money to pay other bills or bolster savings!

Review Your Credit Card Statement Regularly

While credit cards can be a great way to earn reward points and manage short-term cash flow, studies have shown consumers tend to spend more when they pay with plastic. That’s because the pain of spending is gone.

Promise your loved ones that you’ll check your credit card statement online every week to ensure your spending is within your limits. If you still can’t get your credit card spending under control, consider making a cash envelope system, it may be a pain, but it’s better than getting further into credit card debt.

Pay More Than the Minimum Monthly Payment

If you’re making interest-only payments on your line of credit or paying just the minimum on your credit card, not only could it take you years to pay off your debts, it could cost you hundreds or thousands in interest. So do yourself a favour and pay more than the minimum.

There are two popular ways to repay debt: you can start with the debt with the smallest balance (Snowball) or start with the debt with the highest interest rate (Avalanche). Whichever method you choose, try to put every spare penny towards reaching debt freedom. Then, come up with a debt repayment plan that’s realistic and gets you out of debt.

Set Financial Goals

It’s not just about your current income and salary, but also where you forecast your job going and the salary and you expect to make. Talk about what your individual financial goals are. Things like, do you plan to buy a house in the future, where do you imagine that house being. Talk even longer-term. When do you plan to retire, and what do you imagine that retirement to look like?

If you are in a relationship, both you and your partner must know exactly what financial situation each of you is in, but it’s also important to talk about the future.

As a couple, imagine that someone walked over to you and handed you $10,000 cash. What would you do with that money? Try to be realistic when visualizing all of the things you could do with this money.

Would you put the entire amount towards your mortgage, would you pay off your student loans? Or would you take this opportunity to go on a well-deserved vacation? Make sure that you are on the same page when it comes to your financial goals.

Get Professional Help

If you’ve been ignoring the elephant in the room – your debts – for far too long and you owe a lot, seek professional help. There’s nothing to feel ashamed of when it comes to asking for help. Your family and friends will be supportive of your decision if they truly care about you.

End On A Positive Note

After your talk, try to do something special. Even if it’s having a glass of champagne toasting to your healthy financial future, it’s important to seal this event with something positive. In my experience, being upfront and honest about money will help your relationship grow and thrive.

Stay on the same page

After you tell someone you’re in debt, stay transparent. Try to arrange a regular time each week or month to have a conversation about your finances and debts. Spending for a family can quickly put you in a negative position with a ton of unexpected expenses, so knowing where your dollars are going can set you up for success. Being accountable is important, and being forthright about it can make the discussions easier.

Once you get the wheels in motion, it no longer needs to be a huge discussion because you’re doing it regularly. It can take a few minutes, and you’ll be done. However, money is personal and can seriously affect your relationships, so being honest is your best option when it comes to finances.

Related to: How To Tell Someone You’re In Debt

Share this page



Consolidated Credit Canada