This week, I’d like to cover an interesting discussion I’ve come across at the Wesabe forums lately, which I’ve been visiting in my spare time. This particular discussion is about dealing with spousal debt.
What do you do if your spouse has a spending addiction and is irresponsible about their finances? The consensus: don’t rely on a financial rescue package like the one the government has been using on our economy. Executing a bailout won’t resolve the problem behavior (and in fact may encourage it).
It gets pretty dicey when your partner racks up the credit card debt, and just doesn’t know how to stop spending. Here’s how the Wesabe community responds to this issue:
How To Handle Your Partner’s Credit Card Debt and Spending Addiction
#1 Don’t convert credit card debt into home equity debt. It’ll just free up your spouse’s cards so that he or she can do more damage. Unless you freeze or cut up those cards and commit to paying down debt, any loan modification efforts will only lead to increased spending temptations and additional debt.
#2 Encourage your spouse to seek debt and psychological counseling. This can be tricky. Have you ever seen the show on television called “Intervention”? You can only instigate change if you desire to. Unfortunately, many people don’t see their debt as a problem and continue to be in denial.
#3 Don’t bail your spouse out. Discuss the possibility of separating your finances with your partner who cannot manage their debt. See if you can work out an agreement wherein you keep separate financial accounts.
#4 Approach the issue with sensitivity. Be supportive and provide a positive attitude and loving approach to your spouse’s problems.
#5 Become your household’s main financial manager and give your spouse a spending allowance. Can you make your spouse agree to a financial plan? You’ll have to work as a team on this. You’re basically imposing strict limits on your household spending.
#6 Help your spouse gain more of a financial education. Provide your partner with financial resources such as books and articles on how to manage one’s money.
#7 Visit a financial professional: a debt counselor or a financial planner can help straighten out your financial issues and provide valuable input, third party observations and expertise to address your concerns.
As I mentioned, I picked up these situational pointers from the Wesabe community groups, where you can find more helpful discussions of the financial sort. It’s definitely a great place to visit!
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{ 14 comments… read them below or add one }
That must be one of the most divisive problems a couple can have. If both are on the same page (even if that means neither has a handle on their money) then problems can be solved.
But in almost any situation where a couple disagrees about how to approach something important, it’s a recipe for a disaster.
My parents had financial problems; while my mother was very frugal, my dad liked to spend money when they had it. It took them a long time to find a balance that they could live with, and I remember a lot of tension about money when I was growing up.
I like tips number 3 and 5. I do agree that bailing her out would be such a big mistake, and that educating her on finance and controlling spending is the better way to go.
Cheers, and thanks again!
I like all the tips but #5 tip is really very interesting. Thanks for these tips.
Looks like bail-outs don’t work out for families. I wonder if they will work for the country.
I think that this is becoming more and more of a problem every year. There has to be some other means of help, because the bail-outs don’t seem to be working in these cases.
It’s tough when one half is good with money and the other is horrible…these tips are really good, but what it boils down to is communication and getting your significant other to play along without putting him/her on the defensive.
Having any credit card debt shows bad or no money management skills. It’s ok to spend a lot of money you already made, not what you assume you’re going to make.
The only thing I can add is
#8 Make the spouse help you balance the checkbook, let them know, by the numbers, how much the CC debt actually costs.
Great list! I think number five is best approach to make your spouse responsible about financial matters and number six and seven are good to minimize your spouse’s credit card debt and spending addiction.
This is quite a revelation:
“main financial manager and give your spouse a spending allowance.”
But, if this happens, what will happen to modern retail?
I agree with a lot of the ways to approach and solve a spouse’s bad credit card habits. However, in many cases the children can drive some of these bad habits, especially during holiday seasons. I think the education needs to be for every family member.
The key to avoid financial infidelity is to have open communication about money. The best way to avoid this problem is for both partners to get involved in the family finances. There should also be an agreement about how much each partner can spend using joint funds before they need to run it by the spouse. Great advice!
What a financial nightmare! You provide some excellent material to digest if needed.
I have a buddy with a wife that can’t stay out of stores and charges hundreds of dollars every day.
Needless to say he’s a basket case with bills and has recently filed for divorce after trying to get her to stop. It certainly is a relationship killer!
Take Care,
Neil
I totally agree about #7. The best way I got out of debt was contacting a professional.