Dealing with debt is often a family affair. This is especially true when you have major changes in your life, like a wedding, a divorce or a death in the family. It’s also important to teach your children about finances. On the other end of the spectrum, aging parents may need help managing their finances. We can walk you through everything you need to know about debt and your family.

Bringing Debt into a Marriage

Marriage is an intricate arrangement. Two separate individuals decide to join together to form a new institution – the married couple. Each person brings the totality of his or her self into this new entity; all the good and not-so-good qualities they possess are part of the deal. Of course, the expectation of each partner is that the good will outperform the bad, and that whatever bad does exist can be met and more effectively vanquished with a united approach.

Debt is one of the most common problems people bring into a marriage.

Money is high on the list of topics that couples most often fight about and the number one cause of divorce in the country. Financial problems, including debt, increase stress and marital discord. And yet seven out of ten American men and women enter into matrimony with some amount of debt – primarily credit card debt and student loan debt.

And the bottom line is this: In most cases, once you are joined in marriage, the debt of your partner becomes shared debt, not just in the moral sense, but legally, as well. That won’t change if you prepare for divorce. In marriage, more than souls are intertwined – finances are part of the mix.

Children and Debt

Although it’s not necessarily your responsibility to fix your kids’ financial messes, you realize the impact that debt can have on their future. Too much of it can lower their credit scores, limit their ability to get a home mortgage or auto loan, and may even impact their employment prospects. Writing a check and clearing your children’s debts can certainly lift a heavy burden, but it may not be the best move. There are both pros and cons of taking this action, so it is best to take your time, weigh both options, and come to a decision that you feel will be best for you and your child’s unique situation.

Many young adults get their first credit card while in college. This provides an opportunity for them to establish a credit history at an early age. However, the responsibility of managing a credit card can be too much for some students. Between poor budgeting and overspending, some end up with maxed out accounts. Paying off such a debt can give your children a fresh start. However, along with financial help, they need to be educated on the right and wrong ways to manage credit and money – or else they may find themselves in the same situation all over again.

Paying off your children’s debts can potentially stop collection calls and prevent credit damage. However, unless you require your kids to pay the money back, they don’t accept full responsibility for their actions, nor do they experience the full consequences of their poor choices. Understandably, you want to shield your children from these consequences – but if they’re not accountable for their bad decisions, or required to deal with the repercussions, they may repeat past mistakes.

In the end, only you can decide whether to pay off your children’s debt. If they are remorseful and fully comprehend the seriousness of the situation, or if circumstances beyond their control played a role in accumulating the balances, such as a job loss, illness, or divorce, then lending a hand can help get their finances back on track. However, if your children have a pattern of irresponsible behavior, or don’t show any regret over this experience, it’s probably best to step aside and let them figure it out on their own.