"I picked up a really bad case of debt from my ex, and I can't get rid of it."
You can pick up several unpleasant surprises from a sexual partner, but have you considered painful, lasting financial ramifications? According to a recent survey from Finder.com, around 74 million Americans have picked up a "sexually transmitted debt," a debt that's assumed as part of a relationship.
The study determined that the average sexually transmitted debt (STD) works out to $11,485, with most acquired through marriage (28%) or in a divorce settlement (14%). In some states, the IRS says debt taken on by either spouse after the wedding is automatically a shared debt. The remaining reasons in the top five all relate to spending. Purchases made in a partner's name account were cited in 25% of the cases, while joint account purchases were cited in 20% of the cases – and the dreaded secret spending account was a factor 16% of the time.(If secrets are being kept, you should probably check for non-financial surprises as well).
There's a generational element to sexually transmitted debt, especially with respect to marriage. Marriage was cited by Generation Y in 31% of cases and only 24% of the time by baby boomers. Conversely, 23% of baby boomers and only 8% of generation Y cited divorce. The younger you are, the more likely that marriage is the reason – and the older you are, the more likely that divorce is the reason.
What's the primary source of sexually transmitted debt? Credit cards top the list by far. At 37%, assumed credit card debt is almost twice the next highest category (auto loans at 19%). Student loan debt is the third highest sexually transmitted debt at 14%, followed by medical bills, personal loans, and borrowing from family and friends (all at 13%).
Mortgages only make up 10% of sexually transmitted debt by type, but by dollar value, they are the highest by far. The average assumed mortgage cost is over $93,000 – not a surprising finding given that mortgage debt constitutes 68% of total consumer debt.
Similarly, transmitted home equity debt is also high at almost $12,000 – just behind the second-place student loan category at $12,805 – even though home equity loans were only cited in 5% of the cases of sexually transmitted debt.
As with STDs, prevention is key. Couples should have a serious discussion about finances and expectations before entering a serious relationship. Debt problems can be overcome together, but only if both partners are on the same page – and agree that a problem exists.
Unfortunately, there are no short-term cures for sexually transmitted debt. The cure is the same as for other forms of debt – a realistic budget that includes full payment of current bills and a surplus that can be applied to paying down debt.
If you can establish that budget, you have a couple of avenues to accelerate the process. You can consider debt consolidation, where all your debts are consolidated into a single loan and payment stream. For credit card debts, you can switch to a balance transfer card that incorporates all of your credit card debt and offers an introductory 0% APR – allowing you to pay down balances during the introductory period without incurring interest.
We can't stress enough that the budget comes first. If you consolidate debt before you have a proper budget in place, you'll compound your problems. You'll have ever-increasing debt, the fees associated with consolidation loans or balance transfers, and possibly a higher interest rate.
Don't follow bad judgment with more bad judgment. Learn from your mistakes, both in relationships and in finances.
If you want to reduce your interest payments and lower your debt, join MoneyTips and use our free Debt Optimizer tool.