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What to do when your spouse financially cheats on you

Published On: Dec 04 2013 10:43:38 AM CST
Updated On: Dec 04 2013 11:22:30 AM CST
angry wife married couple arguing

iStock / -ilkeryuksel-

By Cecilia Ybarra, Special to THELAW.TV

In a September 2013 message board post on Loveshack.org, "Debanked" shared a post detailing his wife's financial infidelity. He found out from the mortgage company that he and his wife were three months behind, his wife frequently withdrew hundreds at the ATM, and she had a secret post office box to which she had secret credit card statements delivered. Needless to say, trust became a problem in this 14-year marriage that produced two kids. Their savings were all gone, and they owed money to the IRS.

"Debanked" is far from alone. Today.com polled its readers and found that 80 percent of respondents have hidden bills from their spouses.

Why a spouse commits financial infidelity

The Today/Self survey revealed:

  • 38 percent say they fear the truth will lead to divorce
  • 43 percent say they just want to avoid an argument
  • 34 percent say they do it because they disagree on how money should be spent

What to do if your spouse hides debt

First of all, accept responsibility for the part you played while he or she racked up debt. Yes, you. Both of you played a part that led to this mess. You made it possible by turning the family finances completely over to him or her, and he or she let it get out of control. Acknowledge your part and apologize, as difficult as that might seem. The idea behind this is to create a safe place for your spouse to acknowledge what he or she did and apologize for it.

Next, take an inventory of your debt, including balances owed, overdue payments and interest rates. You've already worked through the "How in the hell did this happen" conversation, so keep your eyes forward on how you'll turn your finances around.

Look for cash

What assets do you have that can be liquidated? If you have an annuity, for example, 877 Cash Now says you can sell future payments to a company like J.G. Wentworth and collect a lump sum sooner. Selling all or a portion of your annuity payments may be worth it if it can possibly save you from fines, fees, interest and possible legal actions.

Create a debt-payoff plan

Financial expert Dave Ramsey likes the snowball approach to paying down debt. He recommends listing debts from smallest to largest, regardless of interest rates. Continue paying the minimum balances on all of the loans, if possible, and pay extra to the one with the smallest amount. As soon as Debt One is paid off, take that amount and add it to the minimum you were paying Debt Two. Ramsey says this gives you a feeling of accomplishment (zero balances are a beautiful sight after a debt mess like this), and as you pay down more debt, you'll begin picking up momentum.

Financial matters are family matters

"Debanked" followed up his post by saying he and his wife were working on paying down the debts and he's taken a more active role in the family's finances. He said they are trying to put this in the past and working on improving communication. "Don't think I'll be playing detective, rather, working on communicating," he wrote.

Review your bank statements and financial snapshot at least once a month, together. Mint.com is a popular tool that helps people understand their financial outlooks. It reads your accounts and helps you plan your budgets. It doesn't manage money or enable you to move funds; rather, it's a tool that shows you where you spend money so you can manage it better.

Communication, collaboration and some elbow grease will rebuild the trust and prevent this from happening again in your marriage.

The author, Cecilia Ybarra, is a freelance writer who covers parenting, relationships and health and fitness.

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