There was a stunning story on WalletPop recently of a man who told his wife of 12 years that he had $68,000 of credit card debt.  Throughout their marriage they had maintained separate credit cards and apparently didn’t talk about how they were each using their cards.  Now the man wanted his wife to co-sign on a loan that would roll together their first and second mortgages, their car and truck loans, and the credit card debt.  The woman was looking for advice as to whether she should sign for the loan.

The article’s author advised against the loan.  Many of the people commenting on the article went further, suggesting that the woman’s best move would be to divorce her husband.

While this couple’s story is dramatic, the underlying issues are all too common.  Many couples live separate financial lives.  This can be seen in the results of national surveys finding that 44 percent of married people say it’s okay to keep financial secrets from their spouse, 22 percent say they don’t tell anyone how much they make including their own spouse, and over 60 percent say they do not know when their own spouse plans to retire.

What we have here is not just a failure to communicate, but also a failure among couples to commit to financial oneness.  Married couples are best served by doing the money thing together.  The best way to ensure financial oneness is to use a household budget.  There are two equally important parts to a budget.  The first part is a plan for how household income will be spent, saved, invested, and donated.  The second part is a process for tracking how all household income is actually spent, saved, invested, and donated.

If the couple highlighted in the WalletPop article had a budget in place, they could have kept their separate credit cards while knowing the truth of what was happening with their finances.

What advice would I give the couple?

• Don’t take out the loan.  That will only deal with the symptoms of the problem instead of getting at the cause.
• Stop using credit cards.  They should both do this since the article indicated that the woman also has a propensity to charge up her card.  As I have written before, I believe credit cards can be used responsibly.  But in this case, because of the couple’s age (he’s 59, she’s 62) and amount of debt, they need to be done with credit cards for life.
• Find a great marriage counselor and begin the process of restoring their marriage.
• Seek budget assistance of a trained counselor from Good $ense or Crown, or contact the National Foundation for Credit Counseling and begin a debt management program.
• Create a budget that provides complete financial transparency and helps eliminate all unnecessary spending.
• Sell any unused assets to free up money for debt repayment.
• Seek ways to maximize income for accelerated debt repayment.

It isn’t over for this couple.  With the right attitudes and the right help, this difficult experience could be the catalyst for a forever-improved marriage.

What other advice would you give this couple?

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Categories: Credit/Debt, Money & Marriage, Planning