This is a difficult topic to cover. I’ve hesitated each time I have attempted to write this article over the last six months. First I thought that by writing this article everyone would assume that I was talking about my own partner (which I am not). Then I hesitated because of the sensitive and personal nature of this topic (note: I am not a relationship expert). However, I have decided to push all of this aside and attempt to navigate this delicate issue because of several reader emails I have received asking for help.
At the axis point where money and relationships cross there are emotions, varying opinions, trust issues, and much more. Whether your finances are combined or separated, money and the use of money will play an important role in your relationship. People have different priorities, different spending habits, different wants, and different goals. This means that there must be a lot of compromise in a relationship. But what if one person refuses to compromise and, worse yet, has such a spending problem that he/she undermines the financial security of a household? Perhaps it is time to think about some options to limit the damage.
Financially Limiting Your Partner
When I talk about financially limiting a partner, I am not talking about doing so because of some impulse spending, or because of a difference in opinion on the amount of savings. These situations could cause a rift between you and your partner but they probably do not warrant such drastic moves. The situation that could necessitate such a drastic move is when one person is literally taking down your family into the wastelands of financial ruin. You can’t pay your bills, you are not saving a penny towards your future, they have committed financial infidelity, or you are leaking so badly that you have repeatedly asked others for loans in order to pay off the collectors. This is when such a drastic move might make sense.
Options to Mitigate the Bleeding
If you are at this point, then you probably are very uncomfortable already. But invoking these options below could make you much more uncomfortable. On top of this, you will need (or probably should seek) the permission of your partner in order to put these options into action. Most likely this is going to cause a heated argument, so be prepared. No one likes to have their independence taken away (one of the perks of being an adult), even if it could be for the best of the household.
- Limit Spending to Prepaid Cards: You can cut up all of the credit/debit cards and go on a prepaid card diet. Load a prepaid gift card each month with the amount that has been budgeted for your partner to spend (you could have one card for everything, or different cards for different categories of spending). When the money is gone, hopefully the spending will cease until it’s time to reload.
- Stop Overdraft Fees on the Checking Account: The Federal Reserve Board introduced new rules in 2009 that “prohibit financial institutions from charging consumers fees for paying overdrafts on automated teller machine (ATM) and one-time debit card transactions, unless a consumer consents, or opts in, to the overdraft service for those types of transactions.” In other words, if you do not opt-in to your bank’s overdraft protection program, then your outside transactions will be denied should the funds not be available. This could create embarrassment for you and frustration on the part of people trying to debit against your account, but it will ensure that you do not incur overdraft fees from your bank. It will also stop anyone from continuing to spend on the account once all of the funds are gone.
- Open a Separate Savings Account: In order to sock away some money for your household and future needs, you can always open a savings account under just your name. This is, of course, very sneaky behavior and is a physical manifestation of distrust in a relationship.
- Consistently Check Your Credit Report: If you suspect that your partner is opening up credit accounts using your information or in a secretive manner and hiding debt from the household, then you should sign up for a service where you can keep monthly tabs on your credit report. This way you will at least know of new and/or overdue accounts before large financial damage is done (unless it is too late).
These are all very tough and very personal options to think about taking. They might not be the solution, but they could mitigate financial damage until another solution can be found.
Have you ever found yourself in this position, or know of others who have? What steps did you take, and what was the result?