The Carr Report: Until ‘DEBT’ do us part

by Damon Carr, For New Pittsburgh Courier

“I solemnly take thee to be my lawfully wedded spouse. For better or for worse, For RICHER OR POORER, through sickness and good health, until DEATH do us part.”

Today, the divorce rate is an alarming 51 percent. Meaning, one out of every two marriages ends in divorce. Of those divorces, nearly 80 percent cite financial problems as the leading cause. Irreconcilable differences or can’t reconcile the budget? We’ll call it irreconcilable differences.

This suggests that people are willing to reconcile their differences during the sick times including alcohol abuse, drug addiction, diabetes, heart failure, cancer, strokes, and other ailments. People are willing to reconcile their differences during the worst times: including lying, cheating, stealing, verbal and physical abuse.

But when it comes to the poor, financially strapped, and broke times, nearly 80 percent say it’s time to call it quits. I’m reminded of one of my aunt’s often repeated quotes, “A man can’t turn me on when he’s sitting there and my gas, light, phone, or cable is about to be turned off.”

The ill effects on finances as a result of divorce due to child support, alimony, reduction in income, and/or an unwillingness to relinquish a two-income marital lifestyle on a newly unwedded single person’s budget often further devastates the finances. This can lead to other negative events such as depression, foreclosure, and repossession. This can wreak havoc on both husband and wife. It can also have a negative impact on the children. Lastly, it can create unwanted baggage carried into a new relationship.

In my view, the poor times don’t necessarily mean a time when incomes are at poverty levels—for the divorce rate includes high-income earners. I think that the poor times represent times where the bulk, if not all, of your paychecks are committed to paying bills and debts. Regardless of how much you earn, if there’s little to no money left after paying bills, you’re financially poor. So, unless you sacrifice paying certain bills, it is hard for you to enjoy the simple pleasures of life.

Being financially strapped robs you of your ability to save money, your dignity, and your security blanket. How can one feel secure when it is a struggle to maintain adequate food, clothing, shelter and other necessities? How can one feel secure when every time an unexpected event or unexpected expense comes up, it sets you back financially? How can one feel prideful when, regardless of how hard they work, they can’t seem to get ahead? How can one feel financially sound when they have very little saved for their future?

Being insecure about the necessities of life, not being able to enjoy life’s simple pleasures, not being able to get forward traction and momentum financially, not being able to consistently save money, and not knowing how to get out of debt will create a heightened level of stress. This high degree of stress coupled with the inability to reconcile their priorities, goals, and financial differences are the core reasons why financial problems are the leading cause of divorces.

Nobody plans to fail, they just fail to plan

Marriage is perhaps the biggest and definitely the most impactful decision we make as adults. Yet, unless it’s required by state or encouraged by loved ones, we marry without having premarital counsel and we divorce without ever talking to a marriage counselor. Many of us live our lives and make big financial decisions the same way. No counsel. We figure it out at the expense of trial and error. Too often we live for today with little regard for tomorrow. We commit ourselves to big payments and long-term debts before we’ve demonstrated an ability to save one dollar. We move as if we’re certain that our jobs and health are secured forever more. Every great architectural structure begins with a blueprint. Every journey begins with a map. Likewise, every financially sound marriage should begin with a plan. If money fights are the leading cause of divorce, getting on the same page financially before jumping the broom will help you prevent sweeping your marriage under the rug.

Lack of communication

In many cases, there tends to be a lack of communication about finances. One spouse may be withdrawing money from the account or racking up credit card charges without the other spouse knowing. One spouse may take on additional expenses without their spouse’s consent. Some married couples tend to hide money from each other. Lack of communication with your spouse about money is the same as financial infidelity. Sooner or later, checks will start to bounce and you will be charged late fees and bounced check fees. Sooner or later, hidden expenses will rear its ugly head. Consult with your spouse about various expenditures. Too often we think we are hiding money—and in the end, it can cost us more money and worse, our marriage. In order for you and your spouse to be on the same page financially, communication is a must!

Less is more

His and her car notes have done more damage to married couples’ budgets than any other expense. Remember the more car notes you have, the less disposable income you have to apply toward other financial obligations and goals. Your goal is to own a home, have kids, save for your future, and have a life, right? Now that you share last names and bedrooms, time to share in the idea of one car note at a time. You can have two cars. It’s the two car payments you don’t need. Even better if you work towards having no car payment. It’s possible. It will simply require you to hold on to your cars a few years longer. It’s prioritizing upgrading your disposable income and upgrading your married life over upgrading in cars every 2 to 3 years. As husband and wife, you are one. You can apply this same mindset to other financial obligations. Think about it. Do you really want to tap both husband and wife incomes to the max?

Ignorance

Money doesn’t come with instructions. It does not matter how much you make. Without a proper understanding of your finances, it is very easy to get caught up with excessive expenses. You will find that some couples do not know how much income is coming into the household, nor do they know how much money is being spent monthly. Many people sign leases, student loans, car notes, mortgages, insurance, investments without ever reading the document and never fully understanding the terms. When dealing with finance, ignorance isn’t bliss. What you don’t know can bankrupt you. It’s always best to investigate before you invest in anything. It’s imperative that both husband and wife understand what’s going on with the money, for it is both of you that reap the rewards of sound money management. Conversely, both of you reap the agony and regret of bad money management.

Take control of your finances before your finances take control of you and your marriage.

(Damon Carr, Money Coach can be reached at 412-216-1013 or visit his website @www.damonmoneycoach.com.)

 

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