How to Tell Your Partner About Hidden Debt

Episode Introduction & News

Steve Rhode: Welcome back to the Get Out of Debt Guy. I’m Steve Rhode, your old authentic Get Out of Debt Guy, and with me as always is Damon Day, the new invigorated Get Out of Debt Guy.

Damon Day: Hello, everyone.

Steve Rhode: Today might be the hardest episode we’ve ever recorded because it’s going to cause you — if you can identify with what we’re going to talk about — to feel maybe a tiny bit uncomfortable. But we have solutions, because we’re talking today about how to talk to your spouse about a financial situation or debt that they don’t know about. This means that there’s somebody in your life who doesn’t know. Maybe it’s your partner or someone you love, who’s been kept in the dark about your financial reality. First off, we don’t judge. This is a safe place. You know somewhere in your gut that this secret just can’t last forever. Today, we’re going to give you a roadmap for having this conversation. Not perfectly and not painlessly, but in a way that gives your relationship the best possible chance.

Steve Rhode: I have this money personality test on getoutofdebt.org where you can go and figure out what your approach to money is. That’s important in these conversations. I also have the Debt Confessional, which is a place where you can go and type, anonymously, your debt fear and get it off your chest. People have told me how much it relieved the pressure. I invite you to take advantage of both of those things.

Damon Day: So they type it in and it’s anonymous. Where does it go?

Steve Rhode: It goes nowhere. It goes between your soul and your psyche is where it goes. People have said some of the most incredible things — open and just directly honest for the very first time. Getting it off your chest and feeling like it’s out there and you’re putting it into words can be a huge step forward in identifying what you’re afraid of.

News: Higher-Income Americans Falling Behind on Payments

Damon Day: This article talks about higher income Americans falling behind on payments. And it goes on to say why — it’s the economy, stupid. Higher income people are not as experienced in hitting the wall and dealing with it. It’s not more shame, not more fear, not more anger. It’s just when it’s new and you’re not used to it and you haven’t found a way to deal with it, it can be catastrophic.

Damon Day: Prices right now are 25% or more higher than they were five years ago. A lot of this is not just reckless spending. A lot of it is just trying to maintain the same lifestyle, not realizing that the lifestyle was getting eroded rapidly through inflation.

Steve Rhode: A lot of our self-esteem is wrapped up in what’s called the bandwagon effect. We identify with a group of people who all live the same sort of things. And then all of a sudden, when it hits the fan and you have to dial that back, you just feel terrible.

Damon Day: They find themselves spending five, six, seven thousand dollars a month just servicing debt. And then they’re pulling down retirement trying to keep everything going. If you’re finding yourself in debt and you’re considering a personal loan to consolidate credit cards or you’re considering pulling money from your 401k, call me first. There are much better strategies than pulling money out of your retirement to try to get back to even — especially if you’re not adjusting your lifestyle at all, because all that’s going to do is put you back in the hole in a couple of years.

Steve Rhode: You can reach Damon at damonday.com. Book a free call with him. No fear, no shame, no judgment.

News: Forbes Advisor’s Paid Content Problem

Steve Rhode: I did an article about CBS News doing the same thing. You’ve got Forbes Advisor — Forbes magazine, the century-old reliable, trustworthy magazine — has a division called Forbes Advisor, which is essentially selling ads and leads and affiliate marketing off the goodwill of the Forbes name.

Steve Rhode: Forbes Advisor has disclaimers — you might have to hunt for them — and they say placement on their site does not constitute an independent assessment of the company. But you’re probably going to land on a page called ‘best debt relief companies’ and they’re ranked one, two, three. They do disclose that the position is influenced by how much the company pays.

Steve Rhode: In a nutshell, you have a whole bunch of ads from debt relief programs that are not obvious ads. They look like articles from Forbes. They’ll have some catchy clickbait headline and then somewhere in there will be buried: ‘Oh, and call XYZ company because they can negotiate your debt lower.’ The whole thing is an ad for a debt settlement company, written to make people think they’re reading a real Forbes story.

Damon Day: People hear the word ‘nonprofit’ and they think it’s free, like a government-funded entity. That is 100% not true. Nonprofit is not the way you run your business — it’s your tax status. The only difference is how much money Uncle Sam gets.

Steve Rhode: In the debt world, it doesn’t matter to me how much they make. It’s the quality of advice they give. Credit counseling groups will shield you from other programs because sometimes debt settlement is the right approach. And sometimes bankruptcy is the first thing you should consider.

The Main Topic: How to Tell Your Partner About Hidden Debt

Steve Rhode: Financial secrets destroy you. If you think about the amount of energy it takes to hide this secret from your spouse or partner, whoever — it’s just unsustainable. It’ll just continue to weigh you down. The longer the secret goes on, the more pressure, and the bigger explosion there could be at the end. Secrets create distance even when the other person doesn’t know what’s wrong.

Steve Rhode: You cannot implement a real solution while maintaining the lie. You don’t have to rush to tell your spouse or partner, but talk it through with somebody first.

Steve Rhode: Timing is really critical. The moment to blurt out that you’ve got this financial pressure is not during a fight. And not right before bed. Not at the grocery store. Best time is when you’re both calm and rested — at least you’ve got a chance to be heard.

Damon Day: It’s always best to approach them with what’s going on — but also show them what the solution is. Because if you go to them without a solution, keep this in mind: you’ve been thinking about this and stressing about this for months, probably years. Imagine dumping it cold into your spouse’s lap and expecting them to have their head wrapped around it and not be freaked out because there is no solution. If you go to them with the solution in hand, they can get to that acceptance point a lot quicker.

Steve Rhode: Here are the key phrases to take into your conversation: ‘I take responsibility. I should have told you sooner. I’m committed to fixing this together. Let’s do this together.’ You don’t need to blame anybody else. You don’t need to minimize. You don’t need to make excuses.

Damon Day: In most cases, it’s both of you dancing together. There’s plenty of blame to go around. It doesn’t matter how you got to where you’re at that much. What matters is what are you going to do together moving forward?

Steve Rhode: I was having a deck built on the back of my house, and when something went wrong, the owner called me and said: ‘Steve, I take full responsibility. This is my fault. I will do whatever it takes to fix it.’ And it just instantly deflated me. Coming forward taking responsibility and bringing solutions rather than just a problem — that changes everything.

What to Expect After the Conversation

Steve Rhode: You’re going to go like a saint and take responsibility and you’re going to have the conversation. And it’s not going to be an immediate fairy tale. There might be some anger — and that’s fair. Let them be angry. Let them be hurt. Let them be frosty for a little bit. But you stand strong. You have a plan, and they will come around. I have seen more relationships fall apart because they didn’t deal with it before they had to sell the house.

Steve Rhode: I had a gentleman come to me who was so ashamed about his debt that he couldn’t ask his girlfriend to marry him. They’d been together for seven years. She gave him an ultimatum: unless he could be open about his finances, she was going to leave him. She left him. He never could get over his shame to have that conversation. He lost the love of his life over not being able to talk about it.

Damon Day: The thing that you’re afraid is going to happen if you have this conversation ends up happening anyway — but in a much bigger explosion. Like a process server knocking on the door. Not the way you want your spouse to find out.

Damon Day: Give them space to process it. Don’t just say, ‘Here’s what’s going on, here’s the solution, are we good?’ You’ve got to give them time. Make them the partner in solving this problem, not a bystander. The relationship you have after this conversation is more honest than the one you had before it.

Steve Rhode: Sometimes the debt secrets stem from gambling or substance abuse — and then it’s a much bigger conversation. But it’s important that you get to a point where you can have that conversation, because when they get together with their spouse and say ‘this is what’s going on, but here’s what I’m committed to doing’ — more often than not, it works out.

Steve Rhode: The secret you’ve been keeping isn’t protecting anyone. It’s just postponing and making the fire bigger. It’s isolating you and eroding your relationship. The conversation will be hard. But what comes after — the honesty, the partnership, the shared problem solving — is so much better than where you are right now. You can do this. Damon and I both believe in you.