Since the recession, or as we continue to crawl out of recession if you prefer, many American families are left with boosted debt loads. As they make progress on finding employment and start catching up on bills, they must not turn their attention to that looming debt. Unfortunately, like the housing crisis, many credit card companies allowed risky individuals to take on massive amounts of credit debts at very high interest rates. This makes it very difficult to overcome and very embarrassing.
Unfortunately, 31% of spouses have lied to their partners about finances. Keeping debt a secret may keep the conflict at bay for a while, but eventually, it could cause both your finances and your relationship to come crashing down. Don’t let this happen to you. Find out how to tell your spouse about the debt you’ve been hiding.
My Name is Debt, and I Have a Credit Problem
The first step to breaking any addiction (and yes, racking up and hiding your debt could be an addiction) is admitting you have a problem. At first, this could mean simply admitting to yourself that it’s gotten out of control and your partner would want to know about it. After that, you’ll need to face the music and finally have the big debt conversation with your loved one.
Will this be scary? Of course! If your partner can get past the betrayal of trust and shock though, you can sit down and make a plan together. You’ll be amazed how much better you feel after taking just this initial step.
How to Start the Debt Conversation
Of course there’s no easy way to say it, but you may be able to prepare your spouse a bit by letting them know you want to talk about an important financial problem that’s been weighing on you. Make sure you have plenty of time to sit down, ample space to look at the materials, and no commitments later that day. Then, bring your debt records to the “meeting.” Do not bring a pile of credit card bills thrown in a box. Organize them into binders by card and chronology, showing payments, if any, you’ve already made. This will show your partner you understand you have a credit problem and you’re serious about fixing it.
Finding the Right Words
It’s important to apologize. That may seem obvious, but sometimes this can get last in a confession that’s been waiting so long. Beyond this, it really depends on your specific situation, but you should definitely be honest about it. For most in secret debt, there is a similar thread to their problem. They gave the following advice:
Let them know you never meant to hurt them, but you were shocked when you initially overspent and were too ashamed to admit it, instead letting it get out of control rather than trusting that you could get through it together. You realize your mistake now and have finally found the courage to face it, and you hope they’ll be understanding and forgiving while you reestablish trust.
Make Your Budget a Regular Topic
Give your partner time for everything to sink in. Then, it’s time to make paying down your debt a priority. This means setting up regular budget meetings, finance discussions, or whatever you want to call them. This will allow you to be transparent about spending, maintain priority accounts, and to specify how much you have to left and which cards to pay down first.
Share Account Access and Control
Once you give up your secret, don’t give up all financial control. Although it may be tempting for angry partners to take over finances altogether and restrict access to funds, this isn’t necessarily very productive. Instead, make sure all accounts are shared and accessible by both of you. As you go through your budget conversations and debt planning, you’ll be able to share strategies for saving and budgeting. You can also express opinions about what should be purchased or not. These are important conversations because they can help a spending addict learn to curb their impulsive shopping habit. This shared control also helps reestablish trust.
Save Your Money and Marriage with Cooperative Debt Planning
As you calculate how much debt you owe and figure out a schedule of payments, remember that it’s not just about the money. Your debt repayment plan will affect many other important milestones in your life. Your credit score, how much debt your have, and how delinquent you are could affect your ability to buy a car, a home, to travel, or to send your children to college.
Healthy families discuss their goals, both short- and long-term. This allows you to coordinate your efforts to create a much more effective plan. Working together to repay your debt will help you align your finances with the kind of life you’d love to share. If you’re willing to talk about your debt, but can’t seem to work out a feasible plan, make an appointment to speak with a financial expert like Chuck Price, the Financial Doctor and author of Investing Simplified.