Throughout their marriage, John and Jessica had maintained separate credit cards and apparently didn’t talk about how they were each using their cards. After 12 years of marriage, Jessica was shocked to discover that John had racked up $68,000 of credit card debt.
Instead of asking for forgiveness, John asked Jessica to co-sign for a loan that would roll together their first and second mortgages, their car and truck loans, and his credit card debt.
While their names have been changed, it’s a true story described in an advice column in which Jessica asked whether she should sign for the loan.
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 money they make including their own spouse, and over 60 percent say they don’t know when their own spouse plans to retire.
What we have here is not just a failure to communicate, but also a failure to commit to financial oneness. Married couples are best served by doing the money thing together, and one of the best ways to ensure financial oneness is to use a household budget that gives each spouse anytime/anywhere access to their household’s complete financial picture.
There are three equally important parts to a budget. The first part is a plan developed together for how household income will be given, saved, invested, and spent—preferably in that order. The second part is a process for tracking how all household income is actually given, saved, invested, and spent. And the third part is an ongoing conversation about what adjustments need to be made in order to make household cash flow run effectively.
If the couple highlighted in the advice column had been taking those steps, 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 Compass—Finances God’s Way 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. But it’s going to take some time.
What other advice would you give this couple?