LIKE ANY OTHER
bad habit, debt when spinning out of control can become a shameful secret that one partner in a relationship hides from the other.
Just ask "Him" and "Her," the Chicago couple that runs the anonymous blog makelovenotdebt.com. "Her," as she identifies herself in the blog, admits that just one year ago, she hid her $154,000 in debt (consisting of student loans and credit-card debt) from her soon-to-be fianc .
The now-26-year-old thought her debt would drive her boyfriend away. As the tally climbed higher, her anxiety grew with it. "I was afraid the relationship would be over," she says. "What would you do if someone asked you to acquire $150,000 in debt overnight? I didn't feel I could ask him to do that."
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It's an increasingly common predicament. The amount of debt the average American carries has steadily climbed over the past decade and currently sits at $6,600 in credit-card debt alone, according to the Washington, D.C.-based think tank Center for American Progress. And no fewer than five credit cards are nestled in the average consumer's wallet. With averages like that, it's no surprise that for many, debts are becoming overwhelming, leading some to take great pains to hide their problem.
People think "if [my partner] knew this about me, he or she won't want to be with me," says Washington D.C.-based Olivia Mellan, a therapist and money coach. Still, it's a problem that should not be ignored. With financial issues often being cited as the No. 1 cause of divorce, debt secrets can often lead to the demise of the relationship and financial ruin.
After seven years together, Her finally came clean. Him says the number gave him "a mini heart attack." Not wanting to be dragged down into a never-ending spiral of debt, the couple agreed to tackle the debt together. Today, the newly engaged pair has created what they call a "value-based plan" where they've identified shared values, like health and quality time together. They prioritize their spending by keeping those values in mind.
'Til Debts Do Us Part
Hidden debts ultimately led New York attorney Barry Rothberg to seek a divorce from his wife. Nine months into his marriage, Rothberg (who requested we change his name for privacy reasons), now 30, discovered his wife was hiding debts from him, as bills addressed to her began coming in from various department stores and online retailers. When he inquired as to how much her purchases cost, his wife's answers were evasive, Rothberg says.
After a final confrontation, Rothberg's wife admitted she was carrying debt on several credit and store cards, but didn't give him an exact number. "Her unwillingness to give me an answer about the amounts and the extent of the debt was really the last straw that prompted my leaving," he says.
Rothberg is getting remarried this month. Before deciding to say "I do" he and his fianc ran credit checks to show each other their debt-free bill of health. "I had no reason for suspicion," he says. "But once we saw it, it was 'OK, nothing to worry about, we can go on to the next thing.'"
Discussing debts and taking a fiscal check-up prior to marriage is, of course, a great idea although it often doesn't happen. In many cases, spouses are kept in the dark about their partners' debts until their marriages end in divorce or when one spouse dies.
Sheera Gefen-Greenberg, a matrimonial attorney for municipal employees' services in New York, had a client who was largely in the dark about her husband's assets and liabilities that is, until the couple entered the discovery phase of their divorce, when it was revealed that he had racked up a significant amount of debt for various purchases, including trips and pricey electronic gadgets.
"Even though he's primarily liable for those debts, the wife, in a divorce, may still have to foot the bill at the end of the day," warns Gefen-Greenberg. Divorce laws vary by state. In New York, any debt accrued during the marriage is legally considered marital debt subject to distribution between the parties in a divorce. "Without a prenuptial or postnuptial agreement, it's hard to protect yourself," she says. "You shouldn't be passive about your finances; know what's going on throughout the marriage."
For more on how debts are handled during divorce, click here.
Who Wears the Accountant Hat?
Financial values are instilled at a young age and carried into adulthood and marriage. So when two individuals get together and marry their money, a financial clash is almost inevitable.
"Most of the couples I deal with have different views about debt," says Barbara Bachelder, a certified financial planner and co-owner of Wealth by Design, a financial-planning firm in Sausalito, Calif. The differences spender vs. saver is probably the most prominent example often lead to one partner taking charge of the family's finances, sometimes grudgingly.
Ron McKelvey, 57, puts himself into the "saver" camp. It was only after he got married did he learn that his philosophy on money was nothing like his wife's. "She's the kind of person who would write checks and say, 'There must be money in the account because I still have checks,'" says McKelvey (not his real name), a marketing consultant in the Chicago area. "I've ended up de facto being the money boss, and I don't like that job. But I can't figure a way out of it," he says.
Financial planners say spouses' disagreements about money are often really about larger issues of control. But it's possible to resolve some of the financial disharmony by coming to terms with your partner's money habits. "I think there's a tendency when it comes to marriage that both partners will think they're right when it comes to this issue," says Neil Chethik, author of "Voicemale: What Husbands Really Think About Their Wives, Marriages, Housework and Commitment." Learning to work with your spouse's habits rather than trying to change them is one way to smooth things over.
Chethik, 49, says in his own marriage, his and his wife's divergent attitudes about money caused years of mistrust. "She would sneak spending money, and I would sneak saving money," he says. But with time, they came to realize that neither one was right or wrong. Now the couple sits down twice a year to review their finances, and a budget keeps spending in check. "Our money disagreements have gone down a lot in the last five to 10 years," Chethik says.
He may be one of the lucky ones. When there are secrets and tension surrounding money, many couples either split up or give up. But seeking the assistance of a financial planner or a debt counselor can help. Think of it this way: Not only could it help you regain your financial footing, but it could save your marriage as well.