Welcome to The Money Coach, a Times of Malta column where readers can ask questions about life’s money issues. Send your questions about personal finances, inheritance, gifting or other personal finance topics to [email protected].
Dear Luca,
I am a doctor with a comfortable income, facing a situation that has left me both betrayed and perplexed.
I made a bad investment which set our family back financially but was definitely not disastrous.
But I’ve recently discovered that my wife reacted to the news by using credit cards and buy-now-pay-later schemes to rack up around €15,000 in debt.
She did this to hoard cash, not to spend frivolously. Instead of using the income I provided, she opted to use debt to cover our expenses, allowing her to save more cash. My wife did this to boost our liquid savings, believing that the family’s financial foundation needed a stronger emergency fund to weather any unforeseen crisis.
I learnt about this secret debt as we sought to refinance our home loan. I thought that would help us reduce our monthly payments and ease our financial burden. Instead, the discovery of this new debt severely impacted our refinancing application, complicating our financial situation further.
This revelation has deeply shaken the trust between us. We’ve had counselling to discuss the emotional and relational aspects of this breach, but the heart of the matter relates financial mismanagement. This debt, intended as a misguided safety net, is now a significant concern for our financial stability.
How do I manage and repay this debt while also navigating the complex personal emotions involved? How can my wife and I work together to overcome this financial challenge in a way that heals our relationship and secures our financial future? What steps should we take to ensure open and honest communication about our finances, preventing such missteps from happening again?
Your guidance would be greatly appreciated.
Betrayed but Hopeful Husband
Luca responds:
It’s clear you’re dealing with a significant breach of trust, not just in your relationship, but in your financial partnership as well.
First and foremost, it’s crucial to recognise the broader context of your financial dynamics, including the initial bad investment you mentioned.
How did you communicate this event to your wife? Did you inform her promptly and transparently, or was it something she discovered only after the consequences became apparent? The way in which she learnt of the investment could have significantly influenced her reaction and her subsequent decision to accrue debt.
It’s also crucial to recognise the intention behind your wife’s actions. As you pointed out, she accrued €15,000 in debt because of a deep-seated fear for your family’s financial security.
By paying for expenses via these debts instead of using the income you provided, she aimed to hoard as much cash as possible, believing this would fortify your emergency fund in the face of perceived financial instability. This approach, while flawed, underscores a significant communication gap between you two, especially concerning financial matters.
It seems there was a disconnect in the way you told your wife about your bad investment and the way she received that information. Your assurances might not have fully allayed her fears, prompting her to take drastic measures in secret.
The fact that this debt has also jeopardised your ability to secure better terms for your home loan further complicates matters. It not only highlights the financial repercussions of her actions but also the need for a more transparent and open financial dialogue between you.
Reflect on your communication patterns. Have there been instances where you might not have shared as openly as you thought, or where your wife might have felt her concerns were not adequately addressed? Understanding each other’s perspectives and fears is crucial for moving forward. To rebuild trust and manage this newly accrued debt, consider the following steps:
- Financial Transparency: Commit to regular, open discussions about your finances, ensuring that all decisions and concerns are shared transparently.
- Professional Guidance: Engage with a financial advisor or coach who can help you both navigate debt management and develop strategies to strengthen your financial foundation.
- Rebuilding Trust: Trust is rebuilt through consistent and small steps. Setting and achieving financial goals together can help rebuild this trust.
- Understanding and Forgiveness: It’s essential to work towards understanding each other’s fears and motivations. Forgiveness will be a critical component in healing your relationship and moving forward.
This situation is a poignant reminder that financial health in a marriage is deeply intertwined with communication, trust, and shared objectives. By addressing these underlying issues, you’re not just tackling a financial challenge but also strengthening your bond for the long term.
Luca is the founder of the Money Coaching Hub. Email him your financial questions at [email protected]
Disclaimer: This column is intended to provide general information on various topics related to personal finance. The information provided is for educational purposes only and should not be construed as personalised financial advice for your specific situation. Financial decisions are highly individual and can vary greatly based on your unique circumstances, goals, and risk tolerance. The author of this column is not authorised to provide financial advice. Before making any financial decisions, it is recommended to seek professional financial advice from an authorised financial advisor.