Separating Finances When You Are Separating

The following is a guest post by Angie Picardo, a staff writer for NerdWallet, a personal finance website dedicated to helping consumers. If you would like to write an article for Money Q&A, please visit our Guest Posting Guidelines page. Today, it is almost rare to know people who’ve never been divorced. However, just because we are more familiar with divorce does not mean we are well equipped to handle divorce finances. How can those separating separate finances in a healthy, respectful, and responsible way? Here are some key steps to consider. First of all, keeping emotions from influencing financial decisions is an important first step. Of course, while this may sound like a “duh,” many people know what can happen in the heat of … Read more

Reader’s Question: Handling Finances In Marriage With A Reluctant Spouse

Handling Finances In Marriage

Here is the next installment in our the Reader’s Questions Series which highlight questions emailed to me by you, the readers of Money Q&A.

Be sure to find out at the end of this article how you can receive a free copy of Dave Ramsey’s book, The Total Money Makeover if your money question is chosen to be featured on a future week’s blog post.

If you’re not familiar with Dave Ramsey’s book, you should run right out and get it. It is one of my top ten best personal finance books that everyone should read. Now….on to our reader’s question. Kathleen emailed me a question about handling finances in marriage…

How do you convince a reluctant spouse to talk about finances, savings, and investing when you are up to your eyeballs in debt? What is the best way of handling finances in marriage with a reluctant spouse?

A Little Bit Of The Back Story

Handling Finances In Marriage With A Reluctant SpouseHere are a few more details from Kathleen’s email to me. She has been married 2.5 year, and she can’t get him to start a joint savings account. He keeps saying they do not have enough money at the end of each month to start saving. Kathleen also said that the couple also has no sort of savings, no emergency fund, etc. Nothing!

And, every time she brings it up, her husband says that they have student loans and car loans to pay back, and they can’t afford to start a savings account, open a credit union account, or even get a secured credit card.

She ends her email by saying that she knows that the couple needs a savings plan and an emergency fund, but she does not know how to convince her husband. So, what is the best way of handling finances in marriage with a reluctant spouse?

Saving, Investing, AND Paying Off Debt

There are many different schools of thought about paying off debt and investing at the same time. Many people like Dave Ramsey says that you should focus on debt repayment immediately after you have an initial emergency fund of $1,000 set up and before any investing takes places.

So, my number one piece of advice for Kathleen is to get her emergency fund set up as soon as possible before anything else. You will never be able to get out of the cycle of debt without a backstop of savings that you can go to when the car breaks down or the kids are sick. It is imperative that you have that initial emergency fund. Dave Ramsey has found that $1,000 handles 99% of most true emergencies that people have.

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