Effective Strategies for Couples To Manage Debt

This post was originally posted on Planner Bee.

Money can bring couples closer or create tension. Managing debt together is one of the biggest financial challenges, especially in Singapore, where living costs and large mortgages are high. To stay financially secure and happy, couples need teamwork, trust, and clear communication.

Debt can cause stress, arguments, and misunderstandings. If ignored, it may even strain in a relationship. But by working as a team—setting a budget, prioritising debts, and supporting each other—couples can ease financial pressure and build a stable future.

This article offers effective strategies to help you and your partner manage debt smoothly. Whether it’s credit cards, a mortgage, or student loans, you’ll learn how to stay aligned and take control of your finances as a team.

Understanding debt in relationships

Many couples in Singapore take on debt at some point. Some, like mortgages, are planned, while others, such as credit card debt, can build up unexpectedly. Here are the most common types of debt couples face:

1. Credit card debt

Credit card interest rates in Singapore are typically high, ranging from 25% to 28% per annum. For instance, DBS Bank charges 27.8% per annum, calculated daily from the transaction date until full payment is received. Similarly, Citibank applies an interest rate of 27.9% per annum on outstanding balances.

If cardholders only pay the minimum each month, interest quickly adds up, making it harder to clear the debt. Over time, this can put financial strain on a couple’s budget and savings.

2. Housing loans

Buying a home, whether an HDB flat or private property, is a long-term financial commitment. Mortgage loans often last 20 to 30 years, so couples need to plan for consistent repayments. If both partners contribute to the mortgage, a loss of income from either side could cause financial stress. It’s important to have an emergency fund and discuss backup plans in case of unexpected changes, like job loss or a shift to single income.

3. Car loans

Owning a car in Singapore is costly, mainly due to the Certificate of Entitlement (COE). Car loans typically last five to seven years, depending on the repayment terms. Before committing, couples should align their priorities, as one partner may prefer having a car while the other sees public transport as the better option.

Pro tip: Factor in not just loan repayments but also maintenance, road tax, insurance, and fuel costs before deciding if a car is financially sustainable.

4. Student loans

Even with subsidies for Singaporean students, many graduates carry student loan debt. Couples balancing these repayments while saving for a home, wedding, or children need a solid financial plan. Prioritising high-interest debts and exploring repayment assistance options can ease the burden.

5. Personal loans

Many couples take out personal loans to cover big expenses like weddings, home renovations, or emergencies. While these loans can be helpful, they often come with higher interest rates. Without careful planning, they can add to financial stress and make it harder to save for future goals.

Pro tip: Before taking out a personal loan, compare interest rates and repayment terms. Consider whether you truly need the loan or if there are other ways to manage the expense, such as saving up or adjusting your budget.

Common challenges couples face

Debt is more than just numbers—it can impact emotions and relationships in many ways. Here are some common financial challenges couples face:

1. Financial stress

Debt can feel overwhelming, especially if regular payments start to pile up. If one partner takes on more of the financial burden, they may feel anxious, unsupported, or frustrated. This imbalance can create tension and strain the relationship.

2. Different money habits

One person might be a saver, while the other enjoys spending. Without a middle ground, disagreements over budgeting and financial goals can become a constant source of conflict. Finding a balance is key to avoiding tension.

Read more: Money and Love Languages: Understanding Your Partner’s Financial Style

3. Lack of communication

Some couples avoid talking about money to prevent arguments, but this often leads to bigger problems. Ignoring financial issues can cause misunderstandings and resentment. For example, if one partner secretly takes on more debt, it can break trust when the truth comes out.

Pro tip: Set aside time for open, honest conversations about finances. The more transparent you are, the easier it is to work as a team.

Effective strategies for managing debt as a couple

Be honest about your financial situation

Before making big financial decisions, couples should have an open conversation about money. This includes:

• Income and savings
• Existing debts
• Spending habits

This discussion can be tough, especially if one partner has more debt. However, honesty builds trust and helps with planning.

Pro tip: Set up a judgment-free financial date night. Order some food, grab a notebook, and review your finances together in a relaxed setting. The goal is to understand each other’s financial situation, not assign blame.

Creating a joint debt reduction plan

Once both partners have a clear picture of their debts, it’s time to create a plan.

Step 1: List all debts

Write down:

• Total amount owed
• Interest rate
• Minimum monthly payments

Having everything in one place makes it easier to prioritise repayments.

Step 2: Choose a debt repayment strategy

Two common methods help manage debt:

• Snowball method: Pay off the smallest debt first while making minimum payments on the rest. Once cleared, move to the next smallest debt. This builds motivation with quick wins.
• Avalanche method: Prioritise debts with the highest interest rates first to reduce overall interest costs. This saves more money long-term but takes patience.

Both strategies work—choose the one that keeps you motivated.

Step 3: Set a budget that prioritises debt repayment

A budget ensures debt repayment stays a priority while covering essential expenses like:

• Rent or mortgage
• Utilities and groceries
• Debt repayments
• Savings and emergency fund

Separate vs. Joint accounts: What works best?

There’s no one-size-fits-all approach, but common setups include:

• Joint account for shared expenses: Simplifies bill payments and improves financial transparency but may reduce financial independence.
• Separate accounts for personal spending: Allows individual money management but requires clear communication about shared costs.

Many couples use a joint account for bills while keeping separate accounts for personal spending.

Read more: Marriage & Money: What Insurance Should We Look at as a Couple?

Set regular financial check-ins

Monthly financial discussions help couples stay on track. These meetings should cover:

• Debt repayment progress
• Budget adjustments
• Savings and financial goals

Regular check-ins prevent surprises and keep both partners accountable.

Handling financial disagreements

Money arguments happen, but they don’t have to escalate. Here’s how to discuss finances without conflict:

• Use “I” statements instead of blame. Say, “I feel stressed about our debt” rather than “You spend too much.”
• Choose a neutral time for financial talks—avoid discussing money when emotions are high.
• Set a spending threshold (e.g., agree to discuss purchases over $200 before making a decision).

Set financial goals together

Debt repayment shouldn’t feel like a burden. Stay motivated by working toward shared goals like:

• Saving for a home
• Planning a holiday
• Building an emergency fund

Having clear goals makes managing debt feel like a team effort.

Read more: Practical Ways for Couples To Set Financial Goals Together

Final thoughts

Managing debt as a couple is about teamwork, honesty, and shared financial goals. By being open about money, creating a clear plan, budgeting wisely, and checking in regularly, couples can stay on track and build a stable financial future together.

Take the first step today:

• Plan a financial date night
• Review your debts together
• Set a repayment strategy that works for both of you

If needed, seek professional advice to stay on track. Working together on finances can strengthen your relationship and set you up for long-term success.