This & That: Rough Relationships Edition
Posted by Gail | Filed under Relationships, This & That
L wrote: How do I get through to my husband the reason we never have money for vacation every year is that he drinks and smokes our vacation away? Last night I sat after watching your show and figured out how much he spends a week/month/yearly on Beer and Cigs its at least $3,000.00 a year. I never thought about adding this up, omg it’s our vacation being drank and smoked. I thought it was the way I was paying our bills just couldn’t figure out where that extra was going. Please help me.
Gail says: Sometimes it takes smack with a two-by-four to get the message across to some people. If your buddy is as thick as a brick and won’t listen to reason, you’ll have to resort to a more concrete approach. Give him the $60 each week and say, “This is your bad-habits money or your share of the vacation money. You decide.” Take the same amount as your own allowance and say, “This is my vacation money. If you don’t have yours saved, I’m going without you.” See how it goes from there. But get ready to pack a bag and take even a short trip on your own. If it’s an empty threat, he’ll just call your bluff.
S wrote: I am single but have been in a relationship and have a mortgage with my boyfriend of 11 years. I think I earn more money than he does and he pays child support. I have zero consumer debt other than the mortgage. He’s never discussed his finances with me. We keep our finances separate at all times, even groceries. I know he’s in debt but do not know how much or even if it’s my business. If I ask him he refuses to tell me anything. I have thought of what would happen if we decided to get married and frankly it scares the heck out of me. If he won’t discuss finances now, I truly believe he never will. I think that unless he is open I would just say no to marriage which really is Ok with me. We do not have a common law where I live but we have been together and basically are happy. Do you feel it is none of my business to know his finances or do I have a legitimate reason to demand to see them. I would gladly let him see all of mine. Sincerely, feeling left out.
Gail says: You describe yourself as “single” but you sure are acting “joined-up”. I do believe that partners should share their financial information. That being said, if you’re not in any danger and you’re comfortable with the way things are then, hey, if it works, right. But just for a moment take a look down the road with me:
What if he is a financial moron and gets himself into serious trouble and asks for help? Would you be able to turn him away and say, “Sorry buddy, you made your bed now lay in it” or would you bale him out?
What if he must declare personal bankruptcy and the asset you own together (your home) becomes a part of the issue?
And what if he does want to get married down the road, would you make it conditional on him telling all? At that point, if the mess is huge, would you dump him?
And what if you get pregnant and need to rely on him and his income? Will you be willing to still be in the dark while he does whatever he does with his money?
Think carefully about how this will affect you. It’s lovely that you’ve managed this far, and you manage forever with no problems. But what if?
Kerri in Regina wrote:
I have seen your show and watched you change people’s lives. My husband and I have over $30k in credit card debt, $195k on a home mortgage (for a house which is now only worth $150k), and two car loans (one will be paid off in June 2011, one will be paid off in Dec. 2012). I am perfectly willing to live on the budget and pay down our debt, but my husband is very resistant. He says that we should just accept that we are in debt now and always will be. This is how his family has always lived. To that end, they expect us to go to parties (at $60 per family for a reunion), a weekend vacation with the family (which will cost us at least $600), and other such activities. My husband won’t say no to them, but it doesn’t seem fair to me! We have a 14-month old daughter and another baby on the way. . . We need to get a handle! Any advice on how to make my husband see the light?
Gail says: I get a lot — A LOT — of letters like yours, asking me for help in getting partners on board. Sweetie, I’m afraid the best I can tell you is that you need to sit down and have a solid heart-to-heart. Perhaps if you did up a debt repayment plan that showed him you could, in fact, be out of debt in x number of months, that would help him imagine something he never thought possible. Go and borrow a copy of my book, Debt-Free Forever, from the library and follow the plan. For sure, if you have another baby on the way, you do need to get a handle on your spending. If you do not believe you can afford these family outings and he insists on going, then let him go on his own. You can cuddle up with the wee one at home, and have a quiet evening or weekend reading or partaking of some other pastime you enjoy. He’ll get to be with his family and you can minimize the impact on the family budget by reducing the costs. If he insists that you also come, tell him you’re willing to do so for this event if he’ll take a pass on the next one.
T wrote: I was jilted and my common law partner moved to another country. I lost a lot of money on the wedding. Since we were planning to move to another country together, I was left with an overnight bag and two cats. I was unemployed, homeless and he took all of our funds leaving me with a large debt, which he helped to accrue. I declared bankruptcy. Now, I am out of the bankruptcy, working a temporary position while looking for full time but I can’t seem to stop dwelling on the fact that I’m forty and have nothing. Can you advise me on what I can do to rebuild my credit as quickly as possible?
Gail says: One reason why I strongly suggest that each partner in a relationship maintain their own financial identity — have separate bank accounts, have separate credit — is because you just never know the workings of another person’s mind. I’m sorry you’ve been through hell.
Since “assets” are good indicators of your credit personality – if you have some you’re a better risk – set up a savings account and start stashing some money away. Both a retirement account and an emergency fund are a good idea. Remember, you can start small. Just START.
Setting up services in your name will also help re-establish your credit ID. Get telephone, cable and utility services in your name. Because you have a crappy credit history, you may need to provide a security deposit. Once you’ve proven your payment track record, you can ask for the deposit back and throw it in your emergency fund.
Apply for a secured credit card. Ask your bank how it works. Usually you need to leave on deposit two times the credit limit. So to get a credit card with a $500 limit, you will need to put $1,000 on deposit with the credit card company or bank. Make sure you know how long it’ll be before you can get the money on deposit back so you can plan how you’ll reallocate that money (to retirement savings or your emergency fund).
Gas or department store credit cards are often easier to get and can be good ways to re-establish credit. You MUST pay your bills in full and on time because the interest rates on these cards are often astronomical. As long as you don’t carry a balance it makes no difference what the interest rate is. Use these cards wisely and they can be a great toe-hold back into credit.
Once you’re on you way, apply for an installment loan. An RRSP loan is the perfect way to do this since this loan, while not officially collateralized, might as well be. What it does mean is the interest rate won’t be horrendous. Only borrow as much as you can afford to repay in six months. Don’t let them talk you into more. Once the six months are up, use the amount you were using to repay the loan as your monthly retirement savings contribution. Now you’ve gone from catching up to being proactive about saving and helped your credit history too.
August 30, 2012 at 5:20 am
Regarding the secured credit card advice: we applied for secured credit cards a few years ago (Capital One) after financial troubles, and we did not have to put double the credit limit. My husband put down $300 to get a $300 limit but they only required me to put down $75 to get a $750 limit.
August 30, 2012 at 9:26 am
Wow. On behalf of my gender, I apologize. It seems it’s still too often the case that the man is a financial chowderhead and the wife is the one trying to keep it all together. It’s still like that beatles song, Lady Madonna (children at your feet, wondering how you’re ever going to make ends meet). We’re not all like that.
August 30, 2012 at 9:54 am
Geoff-of course all men aren’t like that! Sad to say that women do their fair share of overspending-look at the majority of the Princesses (female!) I think women just tend to reach out for help to people like Gail, where men will ofte try to go it alone, so their concerns are represented on these forums. Regardless fo your gender, Gail offers some excellent lessons regarding relationships and money!
August 30, 2012 at 11:27 am
My husband and I did the secured Capital One thing too but we ditched them after 2 years when we found out that they do NOT transfer these to regular unsecured cards even with a perfect payment history of using and paying in full every month never carrying a balance – you have to apply for a new card. So we closed the secured cards and got our deposits back ($300 for me and $75 for him) rather than each paying the $59 annual fee again and then later sadly learned we lost all the associated credit history along with it so we had to start rebuilding our credit all over again. It is a WAY better plan to go for the card through your bank, even if requiring a bigger deposit.
August 31, 2012 at 12:27 am
Hi Gail,
I just love your show and watch it religiously. You are such a smart lady.
I just recently got married to an amazing man who is great with money. At the beginning of our relationship, I opened up slowly about my debt which due to a serious of circumstances beyond my control, put me in the position I was in (being laid off, illness etc). I am happy to say with the guidance of my hubby and your guidance, I`m well on my way to being debt free.
I started out having a debt load of $25,000 (overdraft, credit card, student loans etc).
I just made a new budget today in fact, and I will be totally DEBT FREE in 3 more paychecks! I just wanted to take this opportunity to thank you for sharing your knowledge. And I also wanted to say that I am now taking responsibility and charge of my money and being more cautious and mindful of whether I need a certain item or not.
One quick question, I have a high interest savings account, a Tax-Free Savings account and I just opened up an RRSP called the `World`s Best RRSP`with no minimum balance and an interest rate of 0.50%. Do you also recommend shares, stocks, bonds? If so, which ones and how do you get started in a smart way where there is not a lot of risk?
Thanks!
August 31, 2012 at 7:59 am
Thank you for the eye-opener about Capital One. I too signed up for a secured card, and they told me that after a period of time had passed with great history, I would get my deposit back. Seven years later and I still have no deposit returned to me, but they turned my $300 secured card into a $5500 card! I am glad to know that once this card is paid off, I will seek my bank’s advice on a new card before closing down my Capital One card or else all of it would be for nothing. It’s a good way to start building but they sure suck you in with false promises. Gail I love your show and your advice, I try to follow it but I drop the ball sometimes. It’s hard being a single parent single income household but you are motivating!
August 31, 2012 at 2:26 pm
Maybe it’s just me, but the last letter from ‘T’ I don’t see as a downer – it’s inspirational. They’ve been through both financial and emotional catastrophe and didn’t get knocked out. They seem to be back on their feet and moving forward.
They just need to realize that it’s not ‘they have nothing’ but rather ‘they’re starting with nothing’. Starting at 40 isn’t as great as starting at 25, but one can recover. Budget, save, invest, and you’ll be fine.
Gail even wrote a book on this called “It’s never too late:”
http://www.harpercollins.ca/book/index.aspx?isbn=9781554688685
September 2, 2012 at 5:21 pm
For L: If you live in Ontario the gov’t will pay for the smoking cessation medication Chantix. You should discuss with your Dr before using, and a prescription is required. I’m uncertain if you need to be on assistance or be at a certain income level to receive it for free. I tried, and couldn’t get it for no cost. But I know of many ppl who have used it to great success.
September 4, 2012 at 3:55 pm
Dear S: You should definitely say “No,” and run like hell. He refuses to tell you what he owes?! What if you were dating a guy who refused to tell you what he did for a living? Would you be a little suspicious? What if he refused to tell you whether he’d been married before? Refused to tell you whether he’d been to jail? …You just can’t have that sort of a wall in *any* relationship with any topic.