Finding out your spouse lied to you is never pleasant. If you discover your mate has been hiding debt from you — especially when you thought your finances were in good shape — you’re probably angry. But anger won’t solve the problem. Let’s discuss a better course of action.
My spouse concealed debt — what should I do?
Whether your spouse finally came clean about his debt, or you stumbled upon secret accounts, your involvement is crucial in dealing with this mess to ensure it doesn’t happen again. Here’s how:
1. Calm down. You have a right to be mad, but it won’t help. Plus, it’s not productive to tackle problems while in a highly emotional state. Take time to cool off before you discuss a debt-payoff plan with your spouse.
It may sound trite, but everyone makes mistakes. If this is a first-time offense, you may want to let the matter go. Definitely follow the rest of the steps to eradicate the debt, but holding this misstep over your spouse “’til death do us part” won’t help your relationship.
2. Find out the exact damage. Ask your spouse for the facts and figures. You need to know who he owes, the interest rates, the minimum payments and the total debt remaining. Write these down in order from highest interest rate to lowest.
3. Make a budget together. To make a workable debt payment plan, you’ll need to create a budget. Start with income and subtract all of your monthly expenses — both fixed and variable. The leftover money should cover the minimum debt payments plus some. That’s because making only the minimum payment on credit cards can keep you in debt for years or even decades.
4. Figure out how long until the debt is gone. Use a debt calculator to determine how long it will take to pay off the debt given your current available cash each month, paying the debt down from highest to lowest interest rate.
» MORE: How to pay off debt
5. Adjust your budget. Not happy with the length of time it will take you to pay off the debt? Go back to the budget. Can you cut unnecessary expenses, like cable or subscriptions, entirely? Can you cut back other expenses, like entertainment and Internet plans, significantly? What about income — can you ask for a raise or start freelancing on the side? The more money you free up to pay off debt, the sooner you’ll be out of this financial mess.
6. Get down to business … together. Begin paying off the debts, starting from the highest interest rate to the lowest. You’ll make the minimum payments on all debts besides your target debt (read: highest interest rate debt). Everything over the minimums will go to this target account until it’s gone. Then you’ll move to the next debt and then the next one until they’re all gone.
The important thing is to do this together. You and your spouse should both be aware of the financial happenings, from spending to debt payments, throughout this process. It’s a good idea to continue this practice after the debts are gone. This is the household’s money, and you both need to know where it’s going.
7. Keep the lines of communication open. To keep this from happening again, make sure you and your spouse are open to communication. If your spouse is afraid of you or your judgment, he’s more likely to hide things from you, and vice versa. Ensure you’re both comfortable being open and honest with each other to avoid future indiscretions.
Caveat: Some couples choose to keep finances separate, and that’s fine. In this case, hidden debts will only be a problem for three reasons: One, they’re interfering with joint financial goals; two, they’re violating a previous agreement of total financial transparency; or, three, they’re causing the indebted spouse financial stress that keeps him from covering the household expenses he is responsible for.
In this case, you’ll still want to follow the seven steps above. You can agree on the amount of financial transparency you want to have, but as a spouse, you should probably help your partner get out of this mess. You don’t have to financially bail him out, but it’s nice to offer support by helping him create a financial plan to pay off debt.
This isn’t the first time my spouse has kept money secrets — help!
If your spouse is a repeat financial-infidelity offender, creating a budget isn’t enough. Your spouse likely needs counseling, and it’s probably a good idea to go to marriage counseling as well. This is meant to help your spouse and your relationship, not hurt them, so try to present it that way.
Bottom line: The best thing you can do right now is be supportive. Your spouse erred — so be mad for a minute, then get over it. Work together to get rid of the debt and make sure to stay involved in the finances to make sure this doesn’t happen again. If it has happened more than once, it may be valuable for your spouse to go through counseling.
Angry woman and man with flowers image via Shutterstock