I Just Discovered My Wife's $25,000 Secret Debt

(soft music) Brought to you by the EveryDollar app. Start budgeting for free today. - My wife and I bought our first home a little over a year ago and he was reaching out because it just rates of, you know, kind of gone down and we talked about possible refinance in the future. And he did a soft credit pull and those kind of running me through options. And I come to realize that my wife is in about $24,000 of credit card debt that I was naively unaware about. I knew she had some debt but I didn't know that had where there was four cards, three of them that are about 99% maxed, almost maxed out. - Wow. - Well you say naively, why didn't she tell you? - I'm not 100% sure. - How long have you guys been married? - It's, well, it will be 15 years. It's April. - And how long has this debt been laying around? - Some of it, you know, five years or so and I guess was not aware that it was that bad. I don't think it was that bad. But I think it's just one of these things where she's just using the card and doesn't really think of the repercussions. Again, I'm not 100% sure, but I've been trying to, I've been trying to, I've been trying to, - This is beyond like I'm casually using a card. If you've maxed out three credit cards without telling your spouse, this is straight up financial infidelity. - Well do you guys, do you combine your money or are you guys doing the separate deal? - We've been doing separate. It's just obviously what I thought would work best and we just, you know, I, I, the majority, I income, Fred Winner and I cover mortgage, I cover a card, I cover most of the bills, I let her do, I don't handle, yeah. - Ensuring, or, you know. - Well, I mean, you got, you kind of have set yourself up because unfortunately what happens in an environment where you don't have full transparency, which is we don't have things combined. Therefore, you have your world, I have my world. Like you said, maybe you do the insurance, I do the mortgage, right? It does set up this idea that I can kind of do my own thing over here and as long, in her mind, as far as it doesn't affect you, we're square. And then that sets you up to have the same thing. So that's the danger, George, both of the George's, I'm talking to you right now, that's the danger. - Taylor, George. - When you silo your money. - Yeah, when you silo your money. Have you confronted her about what was, where all this money was spent and why she did this without telling you? - I just, we recently bit it and, you know, and it was, like I said, so we had, you know, I guess she put my daughter's braces on one of them. She had some help, she did a number of years ago where she had to get some stuff and she put, or, you know, for the pay of medical expenses and she was using one of those to do that. So she's not buying Louis bags, you know, she's not out here. - No, no, no, no, no, no. - Okay, well that's good. That's the good upside. - More noble purchases, I guess. I still want to see the credit card statements and fully understand what was going on here. - Yeah, I started going through them yesterday and then she even did some cash advances. I'm like, that's the last thing you ever want to do on credit cards because, you know, one of the monthly payments is like $242. And I'm like, 30 of that is. Have you guys had the conversation that we don't engage in debt? Has that been something that you guys have said to each other that this is feeling not only that it's something that she kept from you, but it's also crossing a values line for you or have you never had that conversation? - This is an ad for better help. One of the most important things I've ever done in my life as a husband, as a dad, as a community member, as a neighbor is to finally break down and go see a therapist. It's not just for major traumas, it's for anyone wanting better mental and emotional health and peace. If you're thinking about trying therapy, try my friends at BetterHelp. BetterHelp is 100% online, so it's affordable and it's convenient. Visit betterhelp.com/ramsy for 10% off your first month. - Or have you never had that conversation? - Well, it's something where she knows that I've been working on because I had terrible credit, you know, maybe six, seven years ago in the low 500s, I couldn't even get a $500 credit card from my bank. And now, over the last years or a few years, I've learned how to play the credit game, learn how to, what to do with it, not to buy things, just because, you know, if I don't have the cash, I had to kind of learn a hard way, but at that same bank that wouldn't give me a $500 credit card. Now I have a $46,000 credit card with them. And I don't, I maybe owe $1000 on it. - Here's the problem. - For some part. Here's where the confusion is. There's a lot of confusion in this. And I hear what you're saying, and it now is crystal clear to me. So there's two or three issues here. Number one, like what we already said, the money is siloed. So because of that, there is just going to be a level of secrecy. So that's thing one, and you both have created that environment. Thing two is, there isn't a clear stance on debt in your relationship. It sounds like it's, if it's this kind of debt, it's okay, but if it-- - If it helps our credit score, then maybe. - Uh-huh. And so I think that's created, that's the second problem is there's just not a clear stance on what does that mean. And then the third thing is, yeah, there is a lack of communication. There is something there that she didn't feel like she could tell you. Even something like braces, hey, I have to use this money for our children's braces. So there's a communication there, or some sort of lack of trust that, I don't feel like I can come to you with this, or I don't feel like I can share this. So these are three main issues. And I, hearing the call, George, what I would suggest is, if you can take a level of ownership in this too, and then you can come to her and say, you know what, we've gotten off on the wrong track, like both of us. And I see my part in this, and I want to change what I'm doing today, and I hope that you're here with me because we can't keep going like this. I want you to know that I trust you. I want our finances to be together. And what I'm finding right now is, I was focused on debt, and I kind of was a hypocrite because I was saying my debt was okay, but yours wasn't. And I think honestly going forward, we just need to say that debt has not been good for our relationship, and going forward, I don't want to engage on it. I don't know about you, but this is what I want to talk to you about. And that's how I would approach this. - Yeah, no, I love that. That's in the conversation I had last night when I said, I was like, regardless of the year debt is my debt. I have like $4,000 in debt, I told her, and I'm thinking, oh, we just finally got a tax return for the first time in like two years because I'm making more money than I've made in the past. So having to adjust for things like that, we had to owed the last two years, but you know, having that share money, taking that out and being on top of the finances, or we got like, you know, $4,500, and we were like, okay, cool, maybe we can use the pay down credit card debt, thinking ours is roughly around the same, not realizing hers was as much as it was. - Yeah, so what's her total consumer debt now? - Yeah, it's up 30,000 between the both of us. - Okay, how much do you have in across checking and savings? Liquid. - Like, leftover or just currently right now? - Currently. - I have about $2,300 right now, and my debt is up here, mortgage and it'll look paid. - Okay, I would likely pause in this refinance because it's gonna cost you two to five percent below, and I don't know that you're gonna break even anytime soon, so this might be a down the line thing. Right now, the focus is just attacking this debt with the debt snowball. That's the easy advice. It just tackle it as if it was Y'all's debt, and smallest credit card goes first, minimum payments on the rest. The hard part is gonna be resetting your marriage and financial life, and her rebuilding trust, and the way to do that is a micro commitment every day to be a person who is trustworthy, and that's gonna involve transparency and accountability, and having a joint account, and we know the plan, and freezing both of your credit, freeze all the accounts so that nobody could open debt in your name, including you. Make it really hard, add the friction there, so that we're not tempted. And if you do all of those things and get on a budget, there's definitely hope here. We can get out of this pretty fast. - Okay, well, a question with the snowball is, because like I said, most of them, they're all around the same. They're all like 6400, 6300, 6600, and I'm looking at it. - Yeah, so what I would do then is, I would do them in order, if it's 6400, you know, if the 6300 one is the smallest one, do that one first, and then do the 6400 one, and then do the 6600 one. So when you do the debt snowball everybody, what we're doing here is we're listing the debts smallest to largest by balance, not by monthly payment, not by interest rate, it truly is by balance. And when you do that, you get those small wins quickly. You feel that rush of dopamine, you feel like, "Hey, I did something and you want to go to the next one." And it really is proven to be the best method to pay off your debt quickly, and that's what's gonna work for George too. - Create your free every dollar budget today, the simplest way to budget for your life.