A cautionary tale from the dark side of marriage highlights the need for financial-wedding-vows and the wisdom of expressed family-finances
by Janet LombardiMs. LOMBARDI has written for salon.com, newsweek.com, Long Island Newsday, and others. She has appeared on Huffington Post live web and been featured as a “money matters” guest on radio. The mother of two grown sons, Janet lives in Rockville Centre, NY. Bankruptcy: A Love Story is her first book. Visit her web site for the “7 Steps to Financial Rebound.”
The cascading wedding dress. The engraved invitations. The “his and her” wedding bands. All beautiful elements leading up to the most special of days: your wedding.
With all the planning, however, have you missed one of the most important considerations in your life: how you and your spouse will address and manage your finances?
Even though my husband and I had been married for over two decades, we had never addressed this important aspect of our lives. Then the bottom fell out. My financial life changed in 2007 when my attorney-husband and I were about to celebrate our 25th wedding anniversary. That’s when the financial statements went missing. I was sure they had come in the mail but I couldn’t find them. Had I misplaced the unopened envelopes? There had been a mix-up surely. This was 2007 and we always received our monthly paper statements in the mail on time.
I needed to check our finances because I was planning an anniversary trip to Sorrento, Italy. The spring would be the perfect time and a complement to our honeymoon in France, where, 25 years earlier, we had driven through the French countryside, learned to sip Armagnac, and enjoyed the finest dinner we’d ever sampled at L’Argent. A trip to Italy would be the perfect bookend to celebrate the life we’d built: our two beautiful sons, our side-hall Colonial on a tree-lined suburban street, our circle of loving friends and family.
Finally, on Monday morning, I dialed my financial advisor expecting to hear why the statements were delayed. Instead my advisor was blunt: “Better ask your husband. Then get yourself a good lawyer, good accountant, and a private eye.” He explained that my husband had been regularly siphoning money from retirement and college accounts. I didn’t know how desperate my husband and our finances had become. I also was about to discover that my husband was being investigated, would eventually be prosecuted for a white-collar crime.
Financial & Emotional Catastrophe
What followed were three years of financial and emotional catastrophe that began with my excavating our finances to discover a mountain of business and personal debt. My husband had been borrowing money wildly, investing in amorphous international business deals, and had whittled his law practice down so severely to very little income. As I described in my memoir, Bankruptcy: A Love Story (Heliotrope Books, June 2017), upon discovering this financial infidelity: “I felt like someone dear had died. I was numb, confused, and rubbery. Something irretrievable had vanished, something more than cash.”
It took months to unravel the finances and years to crawl from the wreckage. Today, however, I am debt-free, own an apartment, bought a new car, saw two sons in college, and live a clean financial life. Although I was not the compulsive debtor in our household, I needed to understand my relationship with money and take responsibility for my own finances.
In my financial recovery, I learned valuable lessons about marriage, finance, and planning.
Here are some:
Deepen your love and understanding of each other by discussing your money values
Someone once said: “if you want to know what you value, look in your checking account.” It’s true. What do you each value? Are you spending money on take-out food, the gym, or retirement savings? You can tell easily what’s important by glancing at the numbers. As a couple, discuss how you each like to spend money. No judgment; just a discussion that will help you learn about each other deeply. Even though my situation was extreme, I still wish my husband and I had started out understanding of our money values. It might’ve kept him from being derailed.
Understand each other’s money origins
How did your family approach spending? And what did your parents teach you through their actions or words? Add to your discussion of money by revealing your family’s attitudes. Some families never discuss money; some argue over it; some treat money like a demon – something to fear and be conquered. Some families have shame about lack of money or their own unworthiness. You’ll learn a lot about each other when you open up about your family’s money attitude.
Choose your new family’s money approach
Will you pool income and savings or keep separate accounts? Discuss your choice in detail. Don’t assume you will keep separate accounts, say, until you’ve discussed the reasons, benefits, and pitfalls. I believe money should be shared, however, despite my experiences of having been burned! I still believe that a couple ought to share, support, discuss spending, and enjoy the goals they’ve set together. You’re a team, not two people out to protect your own goals.
Gain financial awareness
Being well acquainted with your personal finances is the number one step to financial health. Work together to get a snapshot of your financial life by tracking what you spend and noting your income and outflow. Know what your savings levels are and what your debt is. Commit these numbers to the page – use old school pencil and paper, Excel spread sheet, or any number of apps for recording expenses. I record all my expenses throughout the day in my iPhone.
When I go home I add the numbers to a register in Quicken. Each entry corresponds to a category I’ve assigned it, such as Groceries, Breakfast Out, or Clothing. Some people review their monthly credit card statements as a record of spending. Discuss how you want to track your expenses and spending. Don’t leave this up to our spouse and don’t shove aside this important step because you think it takes too much effort. You will be driving your future forward in a healthy way when you get real about spending.
Set a calendar date every month to review your money
Once you’ve established a way to track income and expenses, meet monthly to review how you’re doing. If you’re overspending, you can discuss how and why by looking at your spreadsheet. If you’ve set a financial goal, are you making any progress?
Do you hope to buy a home? Are you paying off student debt? Are you setting money aside for a trip? Your monthly review will keep each of you informed and connected. Be patient with each other and your progress. Celebrate your successes. And admit when you’re uncomfortable or scared.
Each take responsibility for your family’s financial life
Making sure your family’s finances are healthy is a way of taking care of yourself. No one should abdicate the role of money manager to the other. While one person may be the main “money wrangler,” each of you needs to know the bottom line. If your partner doesn’t want to discuss money or doesn’t want you involved in the money management, insist on full disclosure. If it’s not forthcoming, you need to know why. Be persistent. Dishonesty or withholding may indicate a problem. Address it. An unraveling financial problem rarely gets better on its own.
Honor your future!
When you’re a young married, you don’t think retirement will ever come. But it will happen. Just like savings, which should be treated as a monthly “expense,” (pay yourself first!), retirement savings and investing need to be money priorities. So, sign up for that 401K or Roth IRA, so that you are taking care of yourself in your later years. According to bankrate.com, “If you are able to sock away $4,000 a year into a Roth for 40 years, and if it earns 8 percent annually, you’ll be a tax-free millionaire at retirement.”
Enjoy your money
Money is for living! Appreciate what you have and be generous. Money is not only a currency but an exchange of energy. Live a life of abundance and gratitude and the money will flow. ◊