Marriage can already be difficult at times but managing money together is another feat for many. It may or may not shock you that many men refuse to allow their wife into the conversation of finances and budgeting. Other times, I learn of the wife handling the finances while leaving the spouse out of the conversation. When it comes to marriage and money, it is vitally important to communicate at least once a month to go over the budget so both know where the money is going. To have the conversation together builds trust, integrity, and avoids any future headaches.
When these difficult conversations do not occur, it may leave a spouse making tough and difficult decisions either because he or she is embarrassed about failing the family or is upset to share one’s mistake, or worse--may have a spending problem.
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Below are 7 ways to uncover if your spouse is hiding debt from you.
#1 No Discussions About Money
If your spouse never discusses the budget with you and just 100% completely trust your spouse handling the money, this isn’t a red flag. However, you may want to consider why the spouse hasn’t mentioned anything budget related to you. It may be that the finances are in good shape and your family is progressing nicely towards getting out of debt, building up your savings, and moving forward with retirement.
Whatever the case may be, just ask if you can sit down for 10-15 minutes once a month so you can understand how the finances are working. This is crucially important because heaven forbid something drastic should happen, you may have to be in charge of handling the finances and you won’t know where and how everything is handled.
#2 Disappearing Statements
When spouses are in financial trouble, they tend to hide or trash statements. Such statements include banking from checking to savings, credit cards, mortgages, etc. I recommend you physically put eyes on each statement when you sit down once a month to go over the finances.
If your spouse still refuses, make the statement above in #1 that if he or she passed, you must know who the financial institutions are and what the current balances are because this will impact your life insurance policy.
Recommend to your spouse to file the bank statements in a filing cabinet. You should keep bank statements for 15-24 months. I recommend more than a year so in the event a tax audit should arise, you have these records on hand.
#3 Your Spouse Gets Angry About Money
I know men who get very upset when their wife mention anything about seeing the money in checking accounts. I am embarrassed to say that I was like this too. As men or women too, we feel like it is a direct attack on our ability or lack of when being asked to see the money in the bank account. What we fail to recognize is that it is the spouse’s money too. Don’t forget that! You have a right to see the money as well!
Try to determine the source of the anger from your spouse when money is mentioned. It may not always be from the hiding of debt and inability to pay the bills. The source could be derived from your overspending within the budget. If he or she is properly managing the money, then your budget should be categorized appropriately similar to the Envelope System. This is a great talking point to your spouse that you can’t help lower expenses if you do not know what the allotted budget is.
#4 Poor Credit Score
Sometimes it is the one handling the money that is the one hiding debt. If you are on the opposite side of the situation, it is good to review each other’s credit score once a month. You can practically find everything “money wise” in one’s credit score. This will increase transparency and integrity between your relationship.
If your spouse has a poor credit score, then be encouraging. Offer ways to help improve the score and make him or her feel like you are part of a team. This will build a loving bond between you two and gives you a goal to work towards. It will also remove any shame and embarrassment that the spouse may be feeling. As a couple, you must read the book Credit Repair: Make a Plan, Improve Your Credit, Avoid Scams by NOLO.
#5 Inconsistent Balances
If your spouse refuses to talk about money with you, determine if the balances of certain accounts are decreasing. This may be challenging but you can pull a Free Credit Report from Credit Karma or at AnnualCreditReport.com. Being the spouse, you have the right to know the condition of your family’s finances. You both need to have a mutual understanding of knowing each other’s spending habits and ability to handle money but if you are picking up clues that household debt balances keep climbing or you notice you keep having less money each month to spend, this could be a red flag.
#6 Joint Accounts
This is a difficult one. As a former banker, I was always informed to keep separate bank accounts from my spouse. With that stated, I tend to go with having three bank accounts. One for you and your spouse and one that pays the bills. With three checking accounts, you minimize the risk of fighting over money because your personal accounts are your discretionary funds to buy whatever you want. However, the third account must be the primary account that is shared and where the direct deposits are funneled. This is crucial because it is the source of the money. When you sit down together, you can then decide how much to transfer over to each other’s personal accounts.
If your spouse is refusing to let you see the primary account where the bills are paid, this could be a tail-tail sign of secretive debt. Also, the personal account could be a source of debt being hidden so I always recommend you review each other’s personal accounts too. It keeps you honest.
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#7 No Sharing of Finances
With both household spouses working, it can be healthy to lessen the burden of bills by sharing the responsibility of paying the bills. Sometimes compromising can go a long way. Decide which bills to pay and from which account.
This will force both of you to sit down and discuss your finances, as well as, learn each other’s spending patterns, habits, and behaviors. Any refusal to this may be a red flag.
If your spouse still refuses to let you into the budgeting process of your home, consider financial counseling. With more than half of the U.S. population ending in divorce with money being the leading cause, I do not want you to be another statistic. Unfortunately, I am a statistic of this because I committed many of these atrocities above. I am the finance major with the big investment and banking background and I failed to allow discussions of finances. Mostly out of pride and while I cannot change that, I can encourage others to not make the same mistake I made and to open your mind to building a healthier relationship with your spouse. Finances are a very big component of this and do not overlook it.