These two need to talk about money

  • Article by: CHRIS FARRELL , Special to the Star Tribune
  • Updated: November 5, 2011 - 10:14 PM

A husband's unwillingness to engage with debt and money is a recipe for trouble.

Q I deal with the family finances and therefore all of our credit card debt is in my name. If I die will the debt be forgiven and likewise if my husband dies will I be responsible for all of it?

The rest of the situation is this: My husband has decreed that he will not "worry about" money or debt, therefore I have taken it as my responsibility. We have about $25,000 in credit card debt spread around about a dozen credit cards. Thankfully, our credit scores are good.

PAULA

A Let's deal with the important topic first: Your husband's unwillingness to engage with debt and money. It's a recipe for trouble. His stance may be extreme, but the difference between how you handle money and your spouse isn't unusual. Scholars have tapped into the insights of economics, psychology and marketing to confirm what poets have long known: When it comes to money we're attracted to our opposite.

But the same research also documents that different ways of handling money can eventually divide couples. What both of you need is to gain an intimate understanding of each other's desires and fears about managing money. The rest is financial technicalities.

So, how do you get to a place where there's a healthier conversation about money? One time-tested idea is to hand off the handling money and managing fun every couple of months. No second guessing. No looking over the shoulder. It's up to your partner.

Another habit I like to encourage is the weekly money meeting. It should be short, and it's best to hold it at the same time and the same place every week. It's a good way to prevent money problems from festering. You go over anything financial, and then you go out on a date -- something to look forward to. If it helps to see a marriage counselor to smooth the way toward a more productive conversation about finances I would make the appointment.  

My concern isn't simply the lack of conversation about household finances. You're carrying a lot of credit card debt. The two of you should come up with a budget and a plan for eliminating it.

The answer to the issue of death and credit card debt isn't simple. You are liable if he passes away since the debt is in your name. Whether he's on the financial hook depends on whether the cards are truly individual accounts. If that's the case, he's not liable, although your estate is on the hook. If your husband was a joint account holder -- which is more typical -- he's responsible for the debt.

Chris Farrell is economics editor for "Marketplace Money." Send your questions to cfarrell@mpr.org.

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