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Make debt pay-down a family affair
It's a good idea to get the children involved in the family's objective to get rid of debt.
Out of the red and into the black

Tackling debt as a family

Debt and money issues often take a toll on family life. The debt repayment process can either alleviate or aggravate interpersonal issues, depending on how you go about it.

"You marry and merge two lifestyles that could prioritize spending very differently," says Christopher Viale, president of Cambridge Credit Counseling Corp. "That can be a real oil-water type of thing in the relationship."

However, encouraging family members to share feelings about debt and working together to eliminate debt can be an enriching experience -- both emotionally and financially. 

"Families need to get together and be more open about it," Viale says. "It comes down to being very open and willing to communicate what the lifestyle differences might be and be willing to find a middle ground in that. It's all give and take."

Set goals together
Everyone has a different tolerance for debt. Some people are not comfortable with any debt while others can rack up huge bills without giving it a second thought.

"One of the big things that we see couples arguing about is how much should be spent, who should be making the decisions, what is a need versus a want," says Michael McAuliffe, president of Family Credit Counseling Service.

When you talk with family members about ways to eliminate debt, try to avoid assigning blame. Instead, make it about the goals.

"We all want to feel successful and do something that's meaningful," Viale says. "That's why you have to create goals, so you can achieve them and continue going about carrying out your plans."

Set up a system
If you're having trouble getting your partner on board, add fun twists and some positivity to help turn attitudes around. You could use non-monetary incentives to encourage savings. For example, tell your spouse that you'll agree to take on a chore for a short period of time after they meet a spending goal.

McAuliffe has his own approach.

"I came up with a checking account system called 'his, hers and ours,' where a couple has three different accounts," he says. "They have a joint account that paychecks get deposited into and all fixed expenses come out of. Then they each get an allowance for discretionary spending."

-- Posted: Feb. 25, 2008
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