List what's owed on each debt and when payments are due. "It's your job as a couple to keep on top of it," says Paul Lermitte, a certified financial planner with Integrated Planning Group/Assante Financial in Vancouver. "If one of you is in charge of paying the bills, the other should at least review what's being done or try sharing the job. It's one way of diffusing arguments about money." He also advises automatic payments: that way everything is paid and paid on time.
And you need to determine just how much debt you can carry. Once you've mapped out what's coming in and going out, it's easy to see what's left. For a mortgage, Lermitte recommends a 20-year amortization as opposed to the more traditional 25. "The first five years are mostly interest," he says. By choosing a shorter amortization you will shave thousands of dollars off your interest costs.
"The real problem area for most couples is credit-card debt," he says. It's easy to understand -- rates vary from 9.9 to 28.8 per cent. If you owe $2,300 at 18.4 per cent, for example, and make only the minimum payments, you'll end up paying more than twice that by the time you make the last payment -- and it will take 18 years. "The day you find you can't pay your cards off on a monthly basis, cut them up," he says.
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