Author Topic: Spouse Maxed Out and Overdrawn, please help!  (Read 28090 times)

T-Rex

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Spouse Maxed Out and Overdrawn, please help!
« on: June 24, 2014, 02:41:22 AM »
DW's debt remained almost static since we met. I have dug her out of overdraft a few times in the past. Her paychecks have nearly doubled, but I recently discovered she is in worse debt and cannot even afford postage stamps now. She showed me her cards & accounts and there is no way she can make it to payday. Also, I am on deployment right now.

Our military contacts are up in one year, her finances must be fixed!

Back story:
∙We don't share any accounts or assets.
∙DW is 21 years old & had no experience of being alone or paying rent.
∙I previously made twice as much as her, and took care of the full rent, groceries, and us going out.
∙It has been 7 months since her giant pay raise. We've been apart that long. Now she is in charge of everything besides my half of the rent.
∙We have similar salaries her $47K vs my $55K. (I'm temporarily making extra on deployment)
∙She has had at least 5 broken smartphones (in cases!) since I have known her. It happened again. I don't know a solution!
∙She has seems to have gone shopping a lot in the last 7 months, also is recently able to drink at bars.
∙She recently got in a car accident and paid a $500 deductible.
∙She told me she has the Mint app, but she has never used it to get out of debt.


Main Problem:
Salary $47,000. 1 year left of employment.
Credit card:-$6K
Checking: -$500
Car loan: -$11K (It isn't worth selling, but it is great on gas)

DW's Proposal:
∙She has asked to take on the full rent in exchange for me paying off her credit card. She says she wants it paid off "all at once". I'm guessing because she has seen interest erase the work of her small payments (all she could afford before.)

I have asked her to send me a breakdown of her income/expenses/debt so I can figure out exactly what to fix. I am thinking about paying her card, but I think it would kill me if she ever ran up that kind of debt again. I imagine she has been paying close to minimum on everything and spending what she thinks is "spare" money.

WHAT DO WE DO? I think she would resent being told that she has to get responsible... but we are running out of time! Until I figure this out, I sent her this link http://www.operationhomefront.net/ I am very worried about her.

chasesfish

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Re: Spouse Maxed Out and Overdrawn, please help!
« Reply #1 on: June 24, 2014, 03:04:40 AM »
T-Rex - First thank you for what you're doing and sorry about the stress from home.

There's no short fix, I'd say send her the small amount of money to remove the immediate stress, with the agreement she track every single expense over the next 4 weeks in a log.

I'll let others make some suggestions

former player

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Re: Spouse Maxed Out and Overdrawn, please help!
« Reply #2 on: June 24, 2014, 03:22:25 AM »
Insanity is doing the same thing everytime and expecting a different result.  Unfortunately, giving your wife money again is probably not the answer here.

What is the consequence if your wife doesn't pay her half of the rent this month?  Does it make sense to give up the lease on the place you currently have and for your wife to move somewhere smaller/cheaper for the rest of your deployment?  Could she temporarily move in with family or a (female!) friend?

Does she have enough food in the house to get to payday?  You could send her money for food if things are that bad, but certainly no more than the equivalent of $300 a month.

$17,500 in debt, no assets and an income of $47,000 is a difficult one.  If you have separate assets and are in a state where your own assets would be completely secure from her debtors, I would suggest bankruptcy for her.  Otherwise she needs to find a charity which will give free financial advice, so that they can help her come to some arrangement with her creditors.

Best of luck.

 

surfhb

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Re: Spouse Maxed Out and Overdrawn, please help!
« Reply #3 on: June 24, 2014, 03:23:15 AM »
I suggest paying off the debt with her promise to take control of the situation.    No offense but 21 is still a girl in this modern age.   Mix that with a decent paycheck and easily obtained credit and you have a recipe for trouble in the hands of an immature person.    If she can't understand the situation: she's married and you 2 need to agree upon finances then I really don't know what to say

Maybe take control of both finances in a combined checking and savings.    Then go over a monthly budget.   Combined you make great money and don't have that much debt at all.   Show her this and show her what saving and investing can do for both of you. 

In a nutshell.....she needs to grow up :)
« Last Edit: June 24, 2014, 03:26:03 AM by surfhb »

Anatidae V

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Re: Spouse Maxed Out and Overdrawn, please help!
« Reply #4 on: June 24, 2014, 03:30:19 AM »
Poor t-rex! Sounds like she needs a structured course to get her to understand her finances and what it means to use a credit card - that is, it sounds like she really has no understanding of money? That might come across more harshly than I meant. She needs a tracking system, I'd recommend YNAB as a gift from you to her which is about $47  with the steam summer sales. She can access all the free information and tutorials, including real time ones with people to answer her questions. This will help her understand how money works. Then she can save herself, you can answer any of her questions and you can offer to agree on a new strategy after she's used this for a month.

Tailor what you do end up using, whether this or something else, to suit her and be a long term fix, else you run a high risk of her not being able to learn new good habits.

Edited to add: She probably needs to be posting her own questions and so forth on something like the YNAB forums so it's not all coming from you. No point in adding a possibility of you looking like the bad guy. And immediate assistance is OK as long as she understands the very next pay will be fully budgeted...
« Last Edit: June 24, 2014, 03:38:18 AM by anatidaev »

T-Rex

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Re: Spouse Maxed Out and Overdrawn, please help!
« Reply #5 on: June 24, 2014, 03:55:48 AM »
I suggest paying off the debt with her promise to take control of the situation.    No offense but 21 is still a girl in this modern age.   Mix that with a decent paycheck and easily obtained credit and you have a recipe for trouble in the hands of an immature person.    If she can't understand the situation: she's married and you 2 need to agree upon finances then I really don't know what to say

Maybe take control of both finances in a combined checking and savings.    Then go over a monthly budget.   Combined you make great money and don't have that much debt at all.   Show her this and show her what saving and investing can do for both of you. 

In a nutshell.....she needs to grow up :)

Agree, I was not responsible at 21. She became a Marine right after school so she is used to getting taken care of like home to barracks/chow hall. It's common!

gooki

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Re: Spouse Maxed Out and Overdrawn, please help!
« Reply #6 on: June 24, 2014, 04:39:32 AM »
If she agrees to never go into debt again, pay of the credit card, and cut it up.

Then start paying yourselves a modest weekly allowance. This is for personal expenses in which you can do what ever the fuck you want to with it.

The rest of the money goes into a checking account to be used for paying living expenses (rent, utilities, groceries). Any excess is saved/invested.

----------------

Either that or just say no and let her deal with her debt. Although the more costly and more confrontational, it seems she is a repeat offender and the only way she'll learn to solve her problems is by hitting rock bottom and fixing it herself.

T-Rex

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Re: Spouse Maxed Out and Overdrawn, please help!
« Reply #7 on: June 24, 2014, 04:48:36 AM »
What is the consequence if your wife doesn't pay her half of the rent this month?  Does it make sense to give up the lease on the place you currently have and for your wife to move somewhere smaller/cheaper for the rest of your deployment?  Could she temporarily move in with family or a (female!) friend?

No, we have a lot of stuff and I'm coming home too soon for that to make sense. We already moved to an affordable place.

Quote
Does she have enough food in the house to get to payday?  You could send her money for food if things are that bad, but certainly no more than the equivalent of $300 a month.

She will have money after pay day, but it will take $500 just to get checking to $0. Maybe if there is just enough she will learn how to live on less in the next month?

Quote
$17,500 in debt, no assets and an income of $47,000 is a difficult one.  If you have separate assets and are in a state where your own assets would be completely secure from her debtors, I would suggest bankruptcy for her.  Otherwise she needs to find a charity which will give free financial advice, so that they can help her come to some arrangement with her creditors.

We are considered residents of different states & moving to a non community property state. Also, it isn't as if she is completely out of options in the long run, she is having a week of no money because she spent her buffer. If you removed her entire debt from next years salary, there is still a workable amount left over. There has to be a better option than bankruptcy.

Mostly I'm looking for a way for her to become self motivated instead of discouraged/scared.

MayDay

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Re: Spouse Maxed Out and Overdrawn, please help!
« Reply #8 on: June 24, 2014, 05:35:58 AM »
How about agreeing to (part) of her plan if she agrees to take Dave Ramsey's financial peace university? Then it isn't you lecturing her.

I still don't think I would agree to paying off her debt- how will she learn? Clearly she didn't the last time you paid it off.maybe give her the 500$ to get back to zero, help her set up a budget, cut up the cc, and then offer an incentive. Like every 1000$ she pays off, you will pay off 1000$.

Jennifer in Ottawa

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Re: Spouse Maxed Out and Overdrawn, please help!
« Reply #9 on: June 24, 2014, 05:44:40 AM »
While I am in the 'combined finances' camp for married couples, in this case its a very good thing you've had them separate.  When I did Admin and Finance/Pay in Petawawa, at least once every tour a soldier would come home (after having all his tour money sent to the shared bank each month) and find a stack of unpaid bills and an empty house.  Very sad, but very very true.

I agree with the others.  Your wife needs to accomplish this herself, but you need be there to be her support.  She's going to need it.

Question I haven't seen answered, does she even realize the gravity of the situation?  Does she see that her hair is on fire?  If she doesn't then you have rather an uphill battle.

Get her to read the blog.  Once you get home, sit down with her and once she is onboard with change, use the resources of the blog, the forum, and the various calculators and trackers to work out a plan.  Don't solve her problem for her, but support her emotionally and help her find the tools she needs.

If you just go ahead and fix this, you are going to be in the same boat in a years time.

Alectejas

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Re: Spouse Maxed Out and Overdrawn, please help!
« Reply #10 on: June 24, 2014, 06:07:34 AM »
T-Rex,
21 still is very young.  When I was 21, I was an immature student in London.  We would go out drinking every night until our grant money ran out and then spend the rest of the semester eating Pot Noodles and feeling sorry for ourselves.  It took a few years more for me to understand how idiotic I was being.  I would advise patience.

purplepants

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Re: Spouse Maxed Out and Overdrawn, please help!
« Reply #11 on: June 24, 2014, 06:16:05 AM »
My husband is in the Air Force, and my younger brother is a Marine.  Sadly, the military does a very poor job of educating their troops on financial management.  I find this to be particularly true in the Marine Corps.  If someone doesn't join up with a good understanding of personal finance, they are likely to fall prey to a whole bunch of poor advice.

I remember in particular, when my brother was in his MOS program, they were all required to attend a lecture on banking and personal finance.  It was "taught" by a representative from NFCU singing the praises of all their products, especially the NFCU debit and credit cards.  The man was basically like a southern baptist preacher who had a whole room of Marines shouting "BAM!  Paid for!"  in response to their every desire. 

Preacher:  "So, you go to Best Buy and you see this beautiful 46 inch flat screen TV and you know you just have to have that TV.  You tell the salesman to ring it up, you pull out your Navy Fed card and..."
Marines [in unison]:  "BAM!  Paid for!"

My brother was so disheartened to see all these young guys fresh out of high school who were just enamored with what this magical card could do for them.  Sure enough, about 6 months later every one of them was maxed out and in deep trouble. 

If your wife hasn't been taught how to manage money, I could easily see how she'd find herself in this situation.  It's a tough one for you to handle while you're deployed.  I would bail her out as little as possible.  If you need to pay the rent to prevent eviction, then do that.  But if she gets the lights shut off because she can't pay the electric bill, she'll survive.

Does she have any crap she can sell?  A quick yard sale might be in order.

darkadams00

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Re: Spouse Maxed Out and Overdrawn, please help!
« Reply #12 on: June 24, 2014, 06:27:54 AM »
From my experience, when a person of that age has not established a short history of good financial decisions, then the root cause is a lack of financial or personal maturity or both. If the issue is totally financial--i.e. she depended on the Marines earlier so this is her first foray into the civilian world--then she needs a way to get some basic instruction. Given your deployment, I'm not certain that you have enough time to work with her weekly to help her learn. You might have weekly time to catch up and talk about a couple weekly/monthly decisions, but that time should be focused on your relationship as much as anything. Ramsey's Financial Peace University could be a good solution. She could be around some like-minded people who are trying to do the right thing with their finances and hopefully would have contact with instructors who could give sound, simple financial advice. We're not talking investing and long-term planning here. The cost is minimal compared to a true financial planner or community college course, and she could possibly get in free if you/she called into Dave's radio show as a deployed couple seeking some intro advice. He gives away FPU classes every week and wholeheartedly supports the troops.

If the issue is a lack of personal maturity, then this problem will be much harder to solve. In that case, she might need almost daily interaction because her immature inner voice will have opportunities everyday to convince her to make bad decisions. And that voice in her head will speak louder than your voice from thousands of miles away. Frequent contact for some level of instruction/accountability will be helpful, but she might be more resentful or resistant to advice.

Also--and sorry to be devil's advocate here, I hope this is not even a remote possibility--why does she want that debt paid off "all at once"? If you pay off the debt immediately from around the globe, she could just walk away from the rent and leave you. Given your situation, her recent history, and the fact that you already have separate assets/accounts, I would work out a plan that has her paying her own debt, even if over a period of interest-bearing time, and help her manage the bills (with your financial support) that would only benefit her if she remained in your home until you return. Once you get back home and can be with her in person, you can make whatever decisions you choose. I think that the risk of being taken advantage in person of would be far less than during a deployment that has already lasted several months. On that point, I agree with Jennifer in Ottawa. I would not be quite as concerned about that if she was 31, married for 10 years, two kids, and never went to bars.

Thanks for your service and good luck.

randymarsh

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Re: Spouse Maxed Out and Overdrawn, please help!
« Reply #13 on: June 24, 2014, 06:32:30 AM »
Your entire post is sounding extremely loud alarm bells. They got louder and louder the more I read.

Your wife is completely irresponsible. It's not just one little thing. It's the CC and car debt. It's breaking 5 phones. It's the impulse shopping. The bar hopping. The car accident (assuming it was her fault).

She's makes plenty of money to service her debts and pay living expenses. IMO, you're being taken advantage of. She's choosing to spend all her money and then wants you to bail her out.

I hate to be negative, but a 21 year old marrying a 30 year old military man with a stable job makes me suspicious of her intentions. Add in the bar hopping and and I think you could have a disaster on your hands.
« Last Edit: June 24, 2014, 06:39:22 AM by thefinancialstudent »

neophyte

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Re: Spouse Maxed Out and Overdrawn, please help!
« Reply #14 on: June 24, 2014, 07:05:53 AM »
I think it would kill me if she ever ran up that kind of debt again. 
[...]
Mostly I'm looking for a way for her to become self motivated instead of discouraged/scared.

Ouch!  What a terrible situation. Hearing things like this is one of the things that makes me terrified of the idea of shared finances. I guess the only good thing about it is that you do have separate finances.

I think realistically, you're probably going to have to help her out some, even if it's just a little so she can make it to payday.  But if you really bail her out of everything, you need to think long and hard about what this will do to you and your relationship if/when it happens again. I know, if it were me, I would be resentful if it ended up happening again and I don't think I could take that.  Yes, she is young, but she needs to learn how to manage her finances. She's got a great salary for someone her age and while you have no kids and are sharing expenses (rent, etc) she could probably dig herself out in a year if she really buckled down, two years without too much trouble.

I kind of like MayDay's suggestion of matching what she manages to pay off (after you get back from deployment and can really get a good feel of the situation). There's a chance it could help her learn the consequences of her spending and how to repair what she's done without leaving her feeling like she's got no help or support from you. She also gets the satisfaction of digging out of the hole she made for herself.  If you just pay off her credit cards again, I suspect the only thing she'll learn is that you are there to bail her out when things get bad.

Good luck with this!

PS. Food for thought: If she claims there is no way she can do it, she makes about $17,000 more than me per year, that is also roughly the amount of her debt.  Not counting the mistakes I've made bailing folks out when I shouldn't have, I can manage to save close to half of my salary. This is totally do-able for her, she just needs to change her attitude and behavior.

PPS. Condoms buddy. Even if she's on birth control, you don't want to risk bringing kids into this until things are under control and have been for quite a while. (I'm thinking years...) For better or for worse, whether it's getting out of debt and building up a nice cushy stash together or throwing in the towel and parting ways, it'll be easier without kids. She's young.  You guys have loads of time.
« Last Edit: June 24, 2014, 07:19:15 AM by neophyte »

purplepants

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Re: Spouse Maxed Out and Overdrawn, please help!
« Reply #15 on: June 24, 2014, 07:07:29 AM »
I hate to be negative, but a 21 year old marrying a 30 year old military man with a stable job makes me suspicious of her intentions. Add in the bar hopping and and I think you could have a disaster on your hands.

Marines marry other Marines all the time, this is quite common.  A Military-Military marriage is a very difficult lifestyle to choose, as it often means much more separation than a typical scenario in which a military member is married to a civilian.  It's very common for this type of stress to lead to depression spending to distract from the difficulty of reality.

I think everyone needs to be very cautious before we go telling someone we've never met that his wife (who we've never met) is up to something nefarious.  This is someone's marriage, and this someone is deployed and putting his life at risk for his country.  Let's not further stress him and compromise his ability to carry out his mission by convincing him that his wife is planning to leave and steal all his money while he's gone. 

We can better serve this gentleman by proposing solutions that protect his wife from total disaster while not enabling her to continue with the frivolous spending and other irresponsible behavior. 

Cheddar Stacker

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Re: Spouse Maxed Out and Overdrawn, please help!
« Reply #16 on: June 24, 2014, 07:29:50 AM »
I hate to be negative, but a 21 year old marrying a 30 year old military man with a stable job makes me suspicious of her intentions. Add in the bar hopping and and I think you could have a disaster on your hands.

Marines marry other Marines all the time, this is quite common.  A Military-Military marriage is a very difficult lifestyle to choose, as it often means much more separation than a typical scenario in which a military member is married to a civilian.  It's very common for this type of stress to lead to depression spending to distract from the difficulty of reality.

I think everyone needs to be very cautious before we go telling someone we've never met that his wife (who we've never met) is up to something nefarious.  This is someone's marriage, and this someone is deployed and putting his life at risk for his country.  Let's not further stress him and compromise his ability to carry out his mission by convincing him that his wife is planning to leave and steal all his money while he's gone. 

We can better serve this gentleman by proposing solutions that protect his wife from total disaster while not enabling her to continue with the frivolous spending and other irresponsible behavior.

Be careful with your assumptions people. T-Rex is always very careful with the terminology used, but I'm fairly certain T-Rex is a woman. Correct me if I wrong here T-rex, but I believe we are talking about two marines, and two women.

I think DW needs to have some skin in the game. If you pay off the debt with one quick payment she will be relieved, but will not have to work to fix the situation. If you feel obligated to offer financial help then by all means do so, but I would hesitate to pay in full. It may seem like the smartest move from a math standpoint, but in the long-term it will not fix the problem.

Good luck!

MidwestGal

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Re: Spouse Maxed Out and Overdrawn, please help!
« Reply #17 on: June 24, 2014, 07:38:42 AM »
I was that stupid once.  So young in the military that the ink on my HS diploma hadn't dried yet, it was easy to start out Mustachian.  I saved nearly every cent of my paychecks to start out with, living on base and eating at the (surprisingly good) chow hall.  My mistakes started being made when I moved off-base (happened quickly due to the regular influx of new troops at the time) and I was suddenly receiving BAH/BAS that amounted to several hundred more dollars of "FREE MONEY" than I was accustomed to stashing.  I was rich, b*tch!  Really, the only thing that kept me paying bills on time was due to the fear they instilled in us during the welcome to base class.

I ended up spending all of my paychecks on stupid crap and booze, then moved onto all the money I'd saved while living on base.  It took another couple of years and a kid before I got my rear end in gear and reversed the stupidity process.

My opinion?  Give her time and maybe the $500, but I'm voting +1 for MayDay's advice to have strings attached in the form of financial education.  Don't just keep rescuing her blindly, or she'll be trained to expect it.  If she doesn't budge then maybe appropriating the finances would be the best option.  That's what I've done with my spouse recently, but the end goal is for us to work in harmony, with trust and understanding.  It generally works better for your spouse to buy in to the process and really understand your values.
« Last Edit: June 24, 2014, 07:42:32 AM by MidwestGal »

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Re: Spouse Maxed Out and Overdrawn, please help!
« Reply #18 on: June 24, 2014, 07:42:58 AM »
Is it feasible to offer to match her debt payments? Is that something you can easily do from abroad, if she gives you online access to her credit card accounts?

It won't stop her from opening new cards behind your back, but if you believe she's being honest about wanting to take care of this, then it could give you the oversight to see her progress and also help at the same time.

The truth is that there is no reason (other than lack of effort/maturity) that she can't pay off her own debt. I am concerned that she doesn't seem to have a real plan. "You pay off my debt and then life will be easier and I'll pay your share of the rent!" isn't a real plan. It's an immediate, easy solution (for her) that involves zero reduction in spending on her part and is very likely to lead to more future debt.

I'm less concerned about the bar hopping, personally (other than that it's expensive and she can't afford it right now). I got married at 20. And if my spouse had been deployed, I'd be at the bars with my friends too. What's she going to do? Sit at home alone while her friends go out? But as with all things - she needs a budget for that, because the costs can easily get out of control.

randymarsh

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Re: Spouse Maxed Out and Overdrawn, please help!
« Reply #19 on: June 24, 2014, 08:00:36 AM »
Two women, 2 men, or one of each, this has warning signs. Everyone's heard a military relationship horror story and they sound similar to what's happening to T-Rex right now: away on deployment and the spouse at home is spending tons of money living it up.

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Re: Spouse Maxed Out and Overdrawn, please help!
« Reply #20 on: June 24, 2014, 08:11:53 AM »
I would make a GIFT of the $500 to balance her checking. Stress that it is a gift, because you love her.

At the same time, surely she is honest enough to know she is bad with money? Say "I will help you get out of this. I'll give advice. We will get through this. But giving you money beyond the $500 won't help you learn."

Good luck.

Also, all of the age excuses, here, really? Being young is no excuse. An EXPLANATION, yes, but not an excuse. Better to grow up earlier rather than later.

dragoncar

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Re: Spouse Maxed Out and Overdrawn, please help!
« Reply #21 on: June 24, 2014, 08:30:02 AM »
My wife had similar debt levels and income.  I paid it off and she made the payments to me.  She just needed a little push towards financial maturity.  The new credit card statement rules make it very easy to show "if you make the min payment, this will be paid off in 50 years for a total of $3 million"

I agree 21 is really young, so I can't fault your dw for being financially immature -- I was at that time too.  She needs handholding... Is there a trusted family friend that can help while your are away?  If it were me, I'd take her offer to pay it off and have her take over rent until things are even.  But not without a watchful eye on her expenses.  I'd also make it clear that failure to maintain positive net worth after you bail her out (not worded that way of corse) would be a serious breach of trust in the relationship.  Maybe she will be more motivated by that than money itself.

HairyUpperLip

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Re: Spouse Maxed Out and Overdrawn, please help!
« Reply #22 on: June 24, 2014, 08:37:42 AM »
Your entire post is sounding extremely loud alarm bells. They got louder and louder the more I read.

Your wife is completely irresponsible. It's not just one little thing. It's the CC and car debt. It's breaking 5 phones. It's the impulse shopping. The bar hopping. The car accident (assuming it was her fault).

She's makes plenty of money to service her debts and pay living expenses. IMO, you're being taken advantage of. She's choosing to spend all her money and then wants you to bail her out.

I hate to be negative, but a 21 year old marrying a 30 year old military man with a stable job makes me suspicious of her intentions. Add in the bar hopping and and I think you could have a disaster on your hands.

I was thinking the same thing, but did not want to say it....

Good luck with your marriage and financial situation. Thank you for your service - I'm very thankful to be an American citizen as I was not born here. I have no real advice to offer, I apologize.

iris lily

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Re: Spouse Maxed Out and Overdrawn, please help!
« Reply #23 on: June 24, 2014, 08:52:37 AM »
..$17,500 in debt, no assets and an income of $47,000 is a difficult one.  If you have separate assets and are in a state where your own assets would be completely secure from her debtors, I would suggest bankruptcy for her...

$17,000 isn't much debt to get rid of on a salary of $47,000.  That $47,000 is pretty damn impressive for someone who is 21 years old. I say: no bankruptcy action for her!

AlanStache

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Re: Spouse Maxed Out and Overdrawn, please help!
« Reply #24 on: June 24, 2014, 08:55:27 AM »
T-Rex, might also be good to ask your wife to show you her credit report.  Just to make sure you know about everything.

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Re: Spouse Maxed Out and Overdrawn, please help!
« Reply #25 on: June 24, 2014, 08:55:35 AM »
I hate to be negative, but a 21 year old marrying a 30 year old military man with a stable job makes me suspicious of her intentions. Add in the bar hopping and and I think you could have a disaster on your hands.

Marines marry other Marines all the time, this is quite common.  A Military-Military marriage is a very difficult lifestyle to choose, as it often means much more separation than a typical scenario in which a military member is married to a civilian.  It's very common for this type of stress to lead to depression spending to distract from the difficulty of reality.

I think everyone needs to be very cautious before we go telling someone we've never met that his wife (who we've never met) is up to something nefarious.  This is someone's marriage, and this someone is deployed and putting his life at risk for his country.  Let's not further stress him and compromise his ability to carry out his mission by convincing him that his wife is planning to leave and steal all his money while he's gone. 

We can better serve this gentleman by proposing solutions that protect his wife from total disaster while not enabling her to continue with the frivolous spending and other irresponsible behavior.

Thank you, yes.

OP , thanks for writing here, I hope you find some ideas that you can use.

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Re: Spouse Maxed Out and Overdrawn, please help!
« Reply #26 on: June 24, 2014, 09:16:40 AM »
T-Rex, might also be good to ask your wife to show you her credit report.  Just to make sure you know about everything.

Agreed.

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Re: Spouse Maxed Out and Overdrawn, please help!
« Reply #27 on: June 24, 2014, 09:43:59 AM »
The DW in this scenario is still so young that it shouldn't be terribly surprising that she's making these kinds of mistakes. But there's all sorts of time in front of her to learn and turn things around.

Her income is fine, but there's obviously a spending problem here. I'd like to see steps to fix that before T-Rex kicks in even one nickel of debt relief. One big question I have is "What kind of social circle(s) is she in?" The effect of peers cannot be ignored. If she's hanging out with big spenders . . . then she could be afflicted with Keeping-Up-With-The-Joneses disease.
« Last Edit: June 24, 2014, 09:45:42 AM by slugline »

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Re: Spouse Maxed Out and Overdrawn, please help!
« Reply #28 on: June 24, 2014, 09:49:33 AM »
Mostly I'm looking for a way for her to become self motivated instead of discouraged/scared.
One option which may not yet have been tried would be going to the Navy-Marine Corps Relief Society on base and asking for help putting together a budget.

NMCRS uses a budgeting spreadsheet that automatically taps into the pay tables and allowance databases to start with income, add up the debts & expenses, and come up with a plan.

The reason I'm suggesting it is that the counselors are a neutral third party (outside of her chain of command) who have done this plenty of times in a non-confrontational environment-- and it can be done by her (without you), which avoids the risk of a marital dispute.

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Re: Spouse Maxed Out and Overdrawn, please help!
« Reply #29 on: June 24, 2014, 10:39:25 AM »
..$17,500 in debt, no assets and an income of $47,000 is a difficult one.  If you have separate assets and are in a state where your own assets would be completely secure from her debtors, I would suggest bankruptcy for her...

$17,000 isn't much debt to get rid of on a salary of $47,000.  That $47,000 is pretty damn impressive for someone who is 21 years old. I say: no bankruptcy action for her!

Well, I did also suggest the alternative of getting some advice on making an arrangement with creditors.  But on current information, her spending is out of control, she can't make minimum payments on her debts and she can't keep enough of her (very decent) salary in her account to pay her rent or put food in her mouth.   Plus, she thinks her solution to her problems is a new credit line from her partner to the tune of $6,000.  Previous financial gifts have had no impact, other than to delay her getting to this point.  So really, why would bankruptcy be such a bad idea, provided it doesn't impact financially on the more responsible partner?

The immediate answer is that (possibly on the condition that she goes and gets financial advice on how to deal with her debts) her partner pays the rent this month and passes enough money across to keep her fed until her next payday (via Western Union, so it doesn't have to go towards the overdraft).  Provided there is enough in the next payday for her to make minimum payments on her debts and pay for rent and food for the month, she has the potential to be OK.  If not, then a creditors arrangement or bankruptcy are the way to go - and the main harm in that is in her creditors not getting all the money they are owed.

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Re: Spouse Maxed Out and Overdrawn, please help!
« Reply #30 on: June 24, 2014, 11:44:04 AM »
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Your entire post is sounding extremely loud alarm bells. They got louder and louder the more I read.

Your wife is completely irresponsible. It's not just one little thing. It's the CC and car debt. It's breaking 5 phones. It's the impulse shopping. The bar hopping. The car accident (assuming it was her fault).

She's makes plenty of money to service her debts and pay living expenses. IMO, you're being taken advantage of. She's choosing to spend all her money and then wants you to bail her out.


I hate to say this, but I have to agree.  The 5 smartphones thing is crazy....do you know for a fact that her smartphones are all broken, or is she using this as an excuse to get more money? 

I would be very, very, very cautious going forward.  I hope I am wrong, and she is just genuinely immature and can't handle money. 

1) Take over any bills that affect your credit.
2) Make sure the checking is not overdrawn.
3) Don't pay the rest of the debt off but help her make a very structured plan on how to pay it.
4) Have her pull her credit report.

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Re: Spouse Maxed Out and Overdrawn, please help!
« Reply #31 on: June 24, 2014, 12:11:49 PM »
If you can pay the rent directly (instead of sending her money to pay it) I would do the opposite of her suggestion. You pay the full rent and she can concentrate on the debt. This protects you and lets her fix her issues. She's young, in a new and stressful situation, and doesn't have the knowledge yet of how to handle it all but since she got this far in the hole and seems stressed about it maybe it's the wake up call she needs to get that knowledge.

I was thinking about this too. But really, the OP's wife has a pretty bad track record regarding debt. There's no good reason to expect that she will use the extra available cash flow to actually pay more than the minimum payments. And it puts the OP in a position, yet again, of coming home after paying the rent for several months, only to find that the debt is worse or no better.

While the dollar amount would be less than just paying the debt outright, the emotional betrayal is no better if it fails.

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Re: Spouse Maxed Out and Overdrawn, please help!
« Reply #32 on: June 24, 2014, 01:13:13 PM »
I suggest paying off the debt with her promise to take control of the situation.    No offense but 21 is still a girl in this modern age.   Mix that with a decent paycheck and easily obtained credit and you have a recipe for trouble in the hands of an immature person.    If she can't understand the situation: she's married and you 2 need to agree upon finances then I really don't know what to say

Maybe take control of both finances in a combined checking and savings.    Then go over a monthly budget.   Combined you make great money and don't have that much debt at all.   Show her this and show her what saving and investing can do for both of you. 

In a nutshell.....she needs to grow up :)

No offense but this answer is asinine...she absolutely is an adult and should claim all responsibility for the sorry situation she and her husband are in. Her husband is in harms way. He is "old enough". She has access to all the info that is needed to take care of this situation and see that it never happens again. I hate when people make believe they are not adults.
Tell your wife to grow up and get her shit together.

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Re: Spouse Maxed Out and Overdrawn, please help!
« Reply #33 on: June 24, 2014, 01:42:58 PM »
In psych class I learned that people are more likely to accept ownership and follow through if they are a part of coming up up with the solution.  So...put the onus on her to suggest a plan to you that holds her accountable without risking that she'll continue her habits.  Ask her how you know she's going to do things differently this time around.

Things to consider:
- A legal loan to her, where you charge her a (lesser) interest.  Make sure it's actually legally binding.
- Creating a budget and documenting it
- Seeing a budget counselor

Note: In at least some states, you have a legal obligation to support your spouse.  Not that you seem to want her to flounder, but just an FYI.

And regarding the fact that she's 21 - you know, people will continue to act like a child as long as they are treated like one.  If there is no reason/incentive to step up to act like an adult, the 21 yo will turn 22, 23, 24, with no better habits and discipline than before.  At age 21, I graduated from college and paid my own expenses, living within my means, paying off the college loans I took out.  That's in part because my parents expected it of me.

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Re: Spouse Maxed Out and Overdrawn, please help!
« Reply #34 on: June 24, 2014, 01:56:54 PM »
Wrote up something long and drawn out, but felt it might hijack, so I'm reducing here:

When I was your spouse's age, I made many of the same mistakes (for me, add in a larger car loan, student loan, and cc debt>>annual income). It was immature and super dumb. It was also terrifying and embarrassing. I was so scared to make the wrong move that I did nothing for several years beyond paying minimums.

I'm pig-headed and independent and was moreso when I was younger. Quick fixes/windfalls wouldn't have helped me and they may not help your wife. Being told I was dumb and irresponsible also didn't help because it just made me resentful of the messenger.  The only thing that worked for me was growing the hell up and digging myself out (selling the car, moving to a LCOLA and getting a better job). Once I figured out how much I paid in interest over the years, I swore to never pay CC interest again (which, duh, was EXACTLY what my dad had been saying to do all along).

Practical advice:

-You pay the rent and she has to figure out the rest until you're home. Once you're back, figure out if you want to work on a plan together to dig her out or if this is something she needs to do herself.  I really think the lesson sticks better if she digs herself out.
-I think setting her up with resources for financial education is a good idea. But it may not stick just yet.  21 is young, especially if she's had meals and housing provided for her up until recently.
-Do you guys have phone insurance plans!? I hope so.



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Re: Spouse Maxed Out and Overdrawn, please help!
« Reply #35 on: June 24, 2014, 02:17:26 PM »
Full disclosure:

I paid my debt. Gave my fiancÚ $6000 of my easily accessible savings to put towards his debt. Mainly because I knew if I kept it, I'd spend it. Also because we're combining finances and I want to help him pay his student loan down.

Then, I went and spent $1000 I didn't have. Asked for him to take $1000 off his line of credit / student loan... So that I could pay my visa. We did that, but damn - sure made me realize how people can maintain bad habits with other people bailing them out all the time.

I share this story to show that every situation is different... And that it is very easy to NOT learn from your mistakes. I'm striving to make sure I don't end up that way.

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Re: Spouse Maxed Out and Overdrawn, please help!
« Reply #36 on: June 24, 2014, 04:44:22 PM »
I suggest paying off the debt with her promise to take control of the situation.    No offense but 21 is still a girl in this modern age.   Mix that with a decent paycheck and easily obtained credit and you have a recipe for trouble in the hands of an immature person.    If she can't understand the situation: she's married and you 2 need to agree upon finances then I really don't know what to say

Maybe take control of both finances in a combined checking and savings.    Then go over a monthly budget.   Combined you make great money and don't have that much debt at all.   Show her this and show her what saving and investing can do for both of you. 

In a nutshell.....she needs to grow up :)

No offense but this answer is asinine...she absolutely is an adult and should claim all responsibility for the sorry situation she and her husband are in. Her husband is in harms way. He is "old enough". She has access to all the info that is needed to take care of this situation and see that it never happens again. I hate when people make believe they are not adults.
Tell your wife to grow up and get her shit together.

I know very few 21 year olds who are mature enough to handle and grasp the concepts discussed on this forum/blog....let alone marriage.  (Sorry OP)   I mean its nice to think so but its just not true.     So in that sense, no, I don't believe most 21 year olds are adults.....I certainly wasn't  LOL

Since this couple is married and their debt is tied, I think one of them needs  to step up to the plate and take control of the situation quickly.   Its certainly not going to be her Im afraid.   
« Last Edit: June 24, 2014, 04:47:12 PM by surfhb »

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Re: Spouse Maxed Out and Overdrawn, please help!
« Reply #37 on: June 24, 2014, 06:27:36 PM »
There are a lot of good suggestions - I am in the camp where you pay the rent, and she learns to handle her debt. Don't completely bail her out, like others have said, she is unlikely to change her behavior in this case (little to no consequence).  Someone mentioned some resources you may both have access to through the military - use those, especially if they are free/cheap.
I know plenty of mature 21year olds, granted, she may be in an unusually stressful situation, but that is not an excuse. It is a sung that she needs to develop better coping skills.  Really.  Life doesn't really get less stressful, but you can learn to handle it better.
Good luck with whatever course you take in this, I hope it all works out.

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Re: Spouse Maxed Out and Overdrawn, please help!
« Reply #38 on: June 24, 2014, 07:03:09 PM »
At 21, and apparently not had good financial training, she has made some bad decisions. So be it. There are plenty of years ahead to grow and make good decisions. But, you will want to start with a clear idea of the playing field, which does include things like credit reports, etc. If you are asking it of her, you should be willing to show yours too.

Ultimately, the interest in having her financial house in good shape is in the interest of your shared life together being better as partners, and that you are excited about the potential in that future. Paint a picture of the beacon on the hill and the steps to get there. You can also ask for her input on how to get to where you want to be a year from now not just at the end of the next paycheck. Get her involved in thinking about it. Make her feel like a partner in the solution not a truant student.  It is also fair to communicate to her that her actions affect you and cause you stress.

Good luck!

T-Rex

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Re: Spouse Maxed Out and Overdrawn, please help!
« Reply #39 on: June 25, 2014, 12:34:50 AM »
Your entire post is sounding extremely loud alarm bells. They got louder and louder the more I read.

Your wife is completely irresponsible. It's not just one little thing. It's the CC and car debt. It's breaking 5 phones. It's the impulse shopping. The bar hopping. The car accident (assuming it was her fault).

She's makes plenty of money to service her debts and pay living expenses. IMO, you're being taken advantage of. She's choosing to spend all her money and then wants you to bail her out.

I hate to be negative, but a 21 year old marrying a 30 year old military man with a stable job makes me suspicious of her intentions. Add in the bar hopping and and I think you could have a disaster on your hands.

I think I know what you're thinking... the jobless civilian wife. It's not super relevant, but we are both female and military. Right now, she pays slightly more rent than I do including all the bills that go along with running a household. The reason I paid for all household expenses before is that she used to make barely above minimum wage (with the exact same debt) and I was already living on my own, paying for my own stuff. She has made a big step toward responsibility and had a giant income increase simultaneously, but isn't managing it well. I don't feel exploited at all.

I was trying to solicit advice on how to make broken phones less financially punishing, since her job requires her to climb into tall trucks and jump on and off them multiple times a day it is inevitable until she changes careers.

T-Rex

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Re: Spouse Maxed Out and Overdrawn, please help!
« Reply #40 on: June 25, 2014, 12:44:10 AM »
I think it would kill me if she ever ran up that kind of debt again. 
[...]
Mostly I'm looking for a way for her to become self motivated instead of discouraged/scared.

Ouch!  What a terrible situation. Hearing things like this is one of the things that makes me terrified of the idea of shared finances. I guess the only good thing about it is that you do have separate finances.

We recognize that we are on completely different pages as far as ability/experience on that subject. I think the main reason it's kept separate is so that we have my stability & she can learn. I could run the household on my own because I never run up my card, but it is fair for us to both contribute now that she makes enough to live.

Quote
I kind of like MayDay's suggestion of matching what she manages to pay off (after you get back from deployment and can really get a good feel of the situation). There's a chance it could help her learn the consequences of her spending and how to repair what she's done without leaving her feeling like she's got no help or support from you. She also gets the satisfaction of digging out of the hole she made for herself.  If you just pay off her credit cards again, I suspect the only thing she'll learn is that you are there to bail her out when things get bad.

At the beginning of deployment I was pondering proposing matching her payments and tested it here & got majorly shot down, haha. I still think it would be a big motivator and make her less intimidated.

Quote
PPS. Condoms buddy. Even if she's on birth control, you don't want to risk bringing kids into this until things are under control and have been for quite a while. (I'm thinking years...) For better or for worse, whether it's getting out of debt and building up a nice cushy stash together or throwing in the towel and parting ways, it'll be easier without kids. She's young.  You guys have loads of time.

LOL my sperm count is nonexistent, I'm a lady. We are both going to go to college after this. Don't worry, it's paid for by the GI Bill.

T-Rex

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Re: Spouse Maxed Out and Overdrawn, please help!
« Reply #41 on: June 25, 2014, 12:57:07 AM »
Ramsey's Financial Peace University could be a good solution

I will look into that.

Quote
Also--and sorry to be devil's advocate here, I hope this is not even a remote possibility--why does she want that debt paid off "all at once"? If you pay off the debt immediately from around the globe, she could just walk away from the rent and leave you.

I don't think that's a factor at all. Looking at her numbers, I can tell interest has rendered her contributions toward debt ineffective. I'm pretty sure she is worried about the number creeping up again. We are also trying to get a house when we get out so getting out of debt is a concern. Running away is a shitty option for us military folks, when it puts you back in moldy barracks getting your rooms and uniforms inspected by angry Marines.

Quote
Given your situation, her recent history, and the fact that you already have separate assets/accounts, I would work out a plan that has her paying her own debt, even if over a period of interest-bearing time, and help her manage the bills (with your financial support) that would only benefit her if she remained in your home until you return.

I have also been working on a little spreadsheet for her just for that. Thinking about having her set up automatic payments so she doesn't want to buy cool t-shirts and cocktails or whatever everybody is enjoying at home!

T-Rex

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Re: Spouse Maxed Out and Overdrawn, please help!
« Reply #42 on: June 25, 2014, 01:52:28 AM »
Is it feasible to offer to match her debt payments? Is that something you can easily do from abroad, if she gives you online access to her credit card accounts?

It won't stop her from opening new cards behind your back, but if you believe she's being honest about wanting to take care of this, then it could give you the oversight to see her progress and also help at the same time.

I think it might work. I know she won't open another card, she is scared of extra debt and doesn't believe in having more cards.

Quote
The truth is that there is no reason (other than lack of effort/maturity) that she can't pay off her own debt. I am concerned that she doesn't seem to have a real plan. "You pay off my debt and then life will be easier and I'll pay your share of the rent!" isn't a real plan. It's an immediate, easy solution (for her) that involves zero reduction in spending on her part and is very likely to lead to more future debt.

I agree. The problem is that she doesn't know why things happen or how to fix them. I think the reason she asked me to pay the card instead of the rent is because she is intimidated by the debt, even if the payment was the exact same number as the increased payment toward rent. If I did have to contribute more, I think it would be more healthy for her to pay a least some of her debt directly so she sees the effect & isn't scared anymore.

Quote
I'm less concerned about the bar hopping, personally (other than that it's expensive and she can't afford it right now). I got married at 20. And if my spouse had been deployed, I'd be at the bars with my friends too. What's she going to do? Sit at home alone while her friends go out? But as with all things - she needs a budget for that, because the costs can easily get out of control.

I am not too worried about it, it is pretty normal for us to go out sometimes. It does mean that she has access to more places to spend money, like 21+ bars and events that usually mark up everything for profit. So, I wonder if that contributes to her not knowing where her money goes.

T-Rex

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Re: Spouse Maxed Out and Overdrawn, please help!
« Reply #43 on: June 25, 2014, 04:01:34 AM »
One big question I have is "What kind of social circle(s) is she in?" The effect of peers cannot be ignored. If she's hanging out with big spenders . . . then she could be afflicted with Keeping-Up-With-The-Joneses disease.

Unfortunately it is common for military & younger people to be in at least as bad of financial condition as her.


I hate to say this, but I have to agree.  The 5 smartphones thing is crazy....do you know for a fact that her smartphones are all broken, or is she using this as an excuse to get more money? 

I would be very, very, very cautious going forward.  I hope I am wrong, and she is just genuinely immature and can't handle money. 

1) Take over any bills that affect your credit.
2) Make sure the checking is not overdrawn.
3) Don't pay the rest of the debt off but help her make a very structured plan on how to pay it.
4) Have her pull her credit report.

She is immature... She genuinely has never been on her own. Checking IS overdrawn (backed up by a "line of credit") And she does actually break the phones, but has never profited from it, it's just a drain on her bank account and a huge hassle to get another one (always used, at least). It is bad, but not scary bad. All her bad choices have only affected her pocket, aside from a couple times I bailed out her checking.
« Last Edit: June 25, 2014, 04:03:26 AM by T-Rex »

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Re: Spouse Maxed Out and Overdrawn, please help!
« Reply #44 on: June 25, 2014, 04:03:36 AM »
I was trying to solicit advice on how to make broken phones less financially punishing, since her job requires her to climb into tall trucks and jump on and off them multiple times a day it is inevitable until she changes careers.

Get a fucking good case.

https://www.lunatik.com.

Or get stupid cheap phones.

T-Rex

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Re: Spouse Maxed Out and Overdrawn, please help!
« Reply #45 on: June 25, 2014, 04:07:07 AM »
..$17,500 in debt, no assets and an income of $47,000 is a difficult one.  If you have separate assets and are in a state where your own assets would be completely secure from her debtors, I would suggest bankruptcy for her...

$17,000 isn't much debt to get rid of on a salary of $47,000.  That $47,000 is pretty damn impressive for someone who is 21 years old. I say: no bankruptcy action for her!

Yes, I just sent her a spreadsheet of what she needs to allot to debts to be positive net worth with an emergency fund in a year. It is far from impossible.

T-Rex

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Re: Spouse Maxed Out and Overdrawn, please help!
« Reply #46 on: June 25, 2014, 05:25:09 AM »
Mostly I'm looking for a way for her to become self motivated instead of discouraged/scared.
One option which may not yet have been tried would be going to the Navy-Marine Corps Relief Society on base and asking for help putting together a budget.

NMCRS uses a budgeting spreadsheet that automatically taps into the pay tables and allowance databases to start with income, add up the debts & expenses, and come up with a plan.

The reason I'm suggesting it is that the counselors are a neutral third party (outside of her chain of command) who have done this plenty of times in a non-confrontational environment-- and it can be done by her (without you), which avoids the risk of a marital dispute.

Well, she has gone to them before. She's had financial planners tell her what to do and write it all out, but that didn't work. I wonder if it's because she couldn't picture the goal, or what. I have asked her what she talked about with her financial counselor. He seems to talk about things she cannot relate with, like making a million dollars in real estate. So I've tried to frame it as achieving the goal of EASing and not worrying about money anymore.

When we talked she said needed me to be there, so I'm assuming she thinks I have the solution. Here's what I've done:

-I explained the end goal
-Made a simple chart w/ minimum monthly payments
-Offered to match any CC payment at or above the minimum that would get her to "Zero Debt w/ E-Fund"
-Also offered the alternative of her sending me the money for those goals so I can just manage it for her if she is too overwhelmed by the idea (at least until I come home and get to talk to her every day.)
-One catch: she has to order her credit reports.

I also sent her this MMM article since it explains prioritizing debt in a funny simple way.
« Last Edit: June 25, 2014, 05:29:35 AM by T-Rex »

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Re: Spouse Maxed Out and Overdrawn, please help!
« Reply #47 on: June 25, 2014, 08:50:42 AM »
According to my calculations, she can do it with a few hundred left over each month.

Thanks for all the advice! Hopefully in one year, I will be sharing both our stories in the celebrations thread.

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Re: Spouse Maxed Out and Overdrawn, please help!
« Reply #48 on: June 25, 2014, 11:19:30 AM »
According to my calculations, she can do it with a few hundred left over each month.

Thanks for all the advice! Hopefully in one year, I will be sharing both our stories in the celebrations thread.

Good luck! About a decade ago my partner helped me bootstrap my way out of debt. The moment that really afforded a permanent behavior change was the first month out of debt, realizing that hey, now I just have the money that used to be going to pay off the old debt. For that to moment to work, the debt payments need to be something that burns a little -- you've gotta feel the money slipping away each month -- so I think your plan of matching the debt payments is pretty cool.

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Re: Spouse Maxed Out and Overdrawn, please help!
« Reply #49 on: June 25, 2014, 12:45:14 PM »
T-Rex,

Lots of great advice so far.  One I will echo is for each of you to have an allowance you get each month to spend however you want.  This was really important to getting my wife onboard and I enjoy having money I can spend on hobbies, eating out occasionally etc. 

I think this is especially important when you are going month after month just paying off debt.