Published in: Credit Cards | April 18, 2020
By: Maurie Backman
It pays to come clean about your financial shortcomings -- debt included.
Most of us know that landing in debt is a bad thing -- it can not only cost us money and ruin our credit, but also give us something to feel bad about and stress over constantly. In fact, in a recent study on debt by The Ascent, 28% of people who owe money in some shape or form said they worry about it every single day.
The stigma of having debt is so troublesome to some people that they've gone so far as to lie about it. Specifically, 40% of those with debt have tried to hide it at least once.
If you're carrying debt, whether because you racked up charges on your credit cards or because you had to take out a personal loan, you don't need to blast that information out to the world, but you definitely shouldn't hide from those people who may be in a position to help you deal with it. In fact, coming clean about your debt could be your ticket to paying it off quickly.
Owning up to your debt doesn't make you a weak person. Quite the contrary -- it means you're willing to tackle the problem head on rather than hide from it.
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If you have a spouse or romantic partner, being open about that debt is crucial. For one thing, that person may be in a financial position to help you pay some of it off. Imagine your partner has a healthy amount of savings, while you're paying loads of interest on a $5,000 credit card balance. Your partner might agree to pay off that debt for you, and you can repay them as you're able.
Furthermore, if you live with a significant other, looping them in on your debt problem could mean working together to get rid of that burden. For example, your partner might offer to set up a joint budget for both of you to follow so that you're able to spend less each month, thereby freeing up extra money to apply to your outstanding debt. Similarly, your partner might agree to take over a larger share of your joint bills temporarily so that you're able to use your earnings to pay off what you owe.
Another person you shouldn't hide your debt from? Your financial advisor or planner. That person's job is to help you manage your money and make smart financial decisions, but they aren't privy to information you don't share. If you keep your debt hidden, you'll miss the opportunity to get expert advice on how to tackle it.
It's true that in some cases, debt results from reckless spending. But in many scenarios, it comes as the result of unfortunate circumstances, like a layoff at work or a string of expensive home repairs or medical bills. Rather than being ashamed of that debt to the point where you're inclined to lie about it, acknowledge its presence and map out a plan to get rid of it. At the same time, lean on the people you trust the most to help you, rather than shutting them out and attempting to go it alone. You never know who might have some solid advice or be in a financial position to make repaying that debt easier.
The Ascent just released a free credit card guide that could help you pay off credit card debt once and for all. Inside, you'll uncover a simple debt-cutting strategy that could save you $1,863 in interest charges paying off $10,000 of debt. Best yet, you can get started in just three minutes!
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