Combining finances as a couple can more than double the amount of student debt you’re facing. However, when you’re working toward paying off student loans, two wallets are better than one.
Couples can eliminate student debt together as they find ways to pay it off smarter and faster. By working with your significant other and planning carefully, couples can find themselves in an advantageous position to tackle their student debt.
Setting financial goals as a couple
Before you start tackling your student loans, you and your partner will need to do some work to get on the same page. Couples need to align their priorities and efforts, or they could end up working against each other — and their shared financial goals.
Be honest and own up
First, couples need to be honest about where they are and how they got there. Together, catalog your financials: debts, incomes, bills, savings, and everything else.
If there are money issues you feel are holding you back, now might be a good time to discuss them.
Try to avoid getting defensive, and don’t hide anything. Instead, be willing to admit where you could do better and take responsibility for improving your own money behavior.
Focus on fixing, not rehashing, the problem
Stay focused on the future and what you can do next, rather than what you should have done in the past.
Instead of getting hung up on which student loan belongs to whom or feeling resentful that your partner brought student debt into the relationship, drop the blame game and take joint ownership of student loans.
Partners should also be honest but understanding of each other, and avoid judgment or shaming. This kind of reaction often just makes a partner more likely to be deceitful, finds a 2014 survey.
This process is about fixing problems and finding solutions, not doling out punishments for past mistakes.
Align your money priorities
Discuss each of your financial priorities and values. What do you want your finances to look like in six months? A year? Five years? What is a “must-have” for each of you, and where are you willing to compromise?
If you each share what you hope to achieve, you can discuss the importance of each goal and decide what to start working on first.
Strategies for couples to knock out student debt
One of your top goals as a couple is probably to pay down student loans, particularly if they carry higher interest rates. It’s challenging for a couple to build wealth with student debts and accruing interest to fight against each month.
If you both buy in to knocking out debt, you can get a lot closer to this goal together than you would apart.
If you’re going to share financial goals, you should also consider fully combining your finances as well. A joint, dedicated effort to pay down debts works best when no one’s holding back.
When you have two people’s savings, incomes, and brainpower to work with, you suddenly have a lot more resources to budget with. Throw as much as you can at student debt and you’ll be amazed at how fast you can pay it down — together.
Make a plan to smash student loans
Part of pooling resources is deciding how to spend all those dollars. Couples will need to make a “get out of debt plan.”
Start with the big picture: How fast can we pay down debt? How much can we pay each month?
Decide which student debts to pay off first (focus on loans with high interest). Make a spending plan to put extra money toward your student loan. Look into options like refinancing, repayment plans, or other debt management tools.
As a team, you can outline your roadmap to financial freedom.
Keep each other on course
It’s healthy to have a mechanism in place to check your money decisions. Couples have a very effective, external check on their spending: their spouse.
Knowing that you’ll have to justify your financial choices will give you a moment to step back and rethink a purchase. Getting in this habit can also prevent fights and spending disagreements.
Play to each partner’s strengths
Each couple will have to decide the details about how they want to manage their finances.
But they can play to each partner’s strengths to get further, faster. Working together also allows partners to compensate for the other’s financial blind spots and avoid mistakes.
Establish more income sources
When two people work together, there’s double the income. If each partner works on a side job too, it’s possible to quadruple your income sources. This additional income can be used to pay balances down on student debt.
Look into setting up a low-investment side job to start bringing in more money. You can also use unique skills to ramp up a side job that pays well.
Couples can support each other in these endeavors by taking turns covering other household chores or responsibilities. This will free up time so a partner can focus on working and earning more.
Encourage and motivate each other
As you take steps toward paying off your student loans, point out the progress you’re making. Even simply saying, “Look — another $500 is gone!” can be encouraging. If you see your partner stepping up to the challenge, let them know it’s noticed and appreciated.
For even bigger wins, like a promotion at work or getting rid of a high-interest loan, treat yourselves to a fun date night.
Seeing that your efforts are paying off will encourage you both to keep working toward goals.
Paying down student loans as a couple comes with a built-in reward system. Knowing you’re doing something that benefits your partner is a powerful and positive source of motivation. When you face student loans together, those debts won’t stand a chance.
Interested in refinancing student loans?Here are the top 6 lenders of 2018!
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1 Important Disclosures for Earnest.
To qualify, you must be a U.S. citizen or possess a 10-year (non-conditional) Permanent Resident Card, reside in a state Earnest lends in, and satisfy our minimum eligibility criteria. You may find more information on loan eligibility here: https://www.earnest.com/eligibility. Not all applicants will be approved for a loan, and not all applicants will qualify for the lowest rate. Approval and interest rate depend on the review of a complete application.
Earnest fixed rate loan rates range from 3.89% APR (with Auto Pay) to 5.87% APR (with Auto Pay). Variable rate loan rates range from 2.47% APR (with Auto Pay) to 5.87% APR (with Auto Pay). For variable rate loans, although the interest rate will vary after you are approved, the interest rate will never exceed 8.95% for loan terms 10 years or less. For loan terms of 10 years to 15 years, the interest rate will never exceed 9.95%. For loan terms over 15 years, the interest rate will never exceed 11.95% (the maximum rates for these loans). Earnest variable interest rate loans are based on a publicly available index, the one month London Interbank Offered Rate (LIBOR). Your rate will be calculated each month by adding a margin between 1.82% and 5.50% to the one month LIBOR. The rate will not increase more than once per month. Earnest rate ranges are current as of Month/Day/Year, and are subject to change based on market conditions and borrower eligibility.
Auto Pay discount: If you make monthly principal and interest payments by an automatic, monthly deduction from a savings or checking account, your rate will be reduced by one quarter of one percent (0.25%) for so long as you continue to make automatic, electronic monthly payments. This benefit is suspended during periods of deferment and forbearance.
The information provided on this page is updated as of 08/21/18. Earnest reserves the right to change, pause, or terminate product offerings at any time without notice. Earnest loans are originated by Earnest Operations LLC. California Finance Lender License 6054788. NMLS # 1204917. Earnest Operations LLC is located at 302 2nd Street, Suite 401N, San Francisco, CA 94107. Terms and Conditions apply. Visit https://www.earnest.com/terms-of-service, email us at firstname.lastname@example.org, or call 888-601-2801 for more information on ourstudent loan refinance product.
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2 Important Disclosures for Laurel Road.
Laurel Road Disclosures
Savings example: average savings calculated based on single loans refinanced from 9/2013 to 12/2017 where borrowers’ previous rates were disclosed. Assumes same loan terms for previous and refinanced loans, and payments made to maturity with no prepayments. Actual savings for individual loans vary based on loan balance, interest rates, and other factors.
Application detail: 5 minutes indicates typical time it takes to complete application with applicant information readily available. It does not include time taken to provide underwriting decision or funding of the loan.
Instant rates mean a delivery of personalized rates for those individuals who provide sufficient information to return a rate. For instant rates a soft credit pull will be conducted, which will not affect your credit score. To proceed with an application, a hard credit pull will be required, which may affect your credit score.
Total savings calculated by aggregating individual average savings across total borrower population from 9/2013 to 12/2017. Individual average savings calculation based on single loans refinanced from 9/2013 to 12/2017 where borrowers’ previous rates were provided. Assumes same loan terms for previous and refinanced loans, and payments made to maturity with no prepayments. Actual savings for individual loans vary based on loan balance, interest rates, and other factors.
3 Important Disclosures for SoFi.
4 Important Disclosures for LendKey.
Refinancing via LendKey.com is only available for applicants with qualified private education loans from an eligible institution. Loans that were used for exam preparation classes, including, but not limited to, loans for LSAT, MCAT, GMAT, and GRE preparation, are not eligible for refinancing with a lender via LendKey.com. If you currently have any of these exam preparation loans, you should not include them in an application to refinance your student loans on this website. Applicants must be either U.S. citizens or Permanent Residents in an eligible state to qualify for a loan. Certain membership requirements (including the opening of a share account and any applicable association fees in connection with membership) may apply in the event that an applicant wishes to accept a loan offer from a credit union lender. Lenders participating on LendKey.com reserve the right to modify or discontinue the products, terms, and benefits offered on this website at any time without notice. LendKey Technologies, Inc. is not affiliated with, nor does it endorse, any educational institution.
5 Important Disclosures for CommonBond.
6 Important Disclosures for Citizens Bank.
Citizens Bank Disclosures
|2.47% – 6.99%3||Undergrad & Graduate||Visit SoFi|
|2.47% – 5.87%1||Undergrad & Graduate||Visit Earnest|
|2.47% – 8.03%4||Undergrad & Graduate||Visit Lendkey|
|2.95% – 6.37%2||Undergrad & Graduate||Visit Laurel Road|
|2.48% – 6.25%5||Undergrad & Graduate||Visit CommonBond|
|2.72% – 8.32%6||Undergrad & Graduate||Visit Citizens|