What if your partner is racking up the credit card debt, and having a hard time putting a halt to their unnecessary spending? Then it can get pretty dicey. If your personal or spousal debt is starting to look unmanageable due to a spending addiction, here are a few ideas that you may try out to get your finances back on track.
How To Deal With The Debt Of Your Spouse Or Partner
#1 Be careful about the debt solutions you undertake. You know yourself best, so when you’re solving your own debt problems, you have only yourself to worry about. But having to deal with someone else’s issues may pose some uncertainties, and there are more factors to consider. For instance, be especially careful about converting credit card debt into home equity debt. It’ll just free up your cards so that you or your partner can inadvertently 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 Seek debt and psychological counseling. While you may be open to taking action for yourself, it may be trickier if you try to encourage your spouse to go this route. 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. Dealing with change can sometimes be tough (it’s easy to fall off the wagon), so making this a team effort is advisable. Of course, your family’s dynamics will determine whether you can realistically make this a successful joint effort.
#5 Become your household’s main financial manager and give your spouse a spending allowance. In effect, this would mean relinquishing financial control and assigning the financial responsibilities to someone in the family who can handle them. Can you make your spouse cooperate and agree to a financial plan? You’re both basically imposing strict limits on your household spending, and though it may be an uncomfortable arrangement, it may be worth doing for at least, the short term.
#6 Gain more of a financial education. Work to increase your financial IQ. You can also help your partner by providing them 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.
I’ve realized that the only way you can break a bad habit is to make a commitment to deal with it head on. You’ll have to dig deep to find the discipline to make those changes but over time, it gets easier as you develop healthier financial habits.
For additional pointers on this subject, you may want to visit our frugality section, where you can find a lot of helpful discussions on saving and cost cutting.
Created September 21, 2008. Updated April 20, 2012. Copyright © 2012 The Digerati Life. All Rights Reserved.