Financial infidelity
Jill said her husband kept her in the dark about the family’s finances for at least two years. It took him just five months to blow through the $100,000 HELOC he convinced her to sign up for in December. After that, he proceeded to take cash advances from multiple credit cards to fund his addiction to slot machines.
Keeping secrets about money or debt from loved ones is what experts call “financial infidelity”. In a recent survey by Bankrate, 42% of Americans admitted to it. Of those who responded, 30% said they made purchases their spouse or partner wouldn’t approve of, while 23% had secret debt.
This pattern of behavior could have a lasting impact on relationships. Jill said the interest rates on all the credit card debt range from 23% to 29% while the HELOC is set at 9%. This means their monthly housing costs have now shot up from $1,000 to $3,200. This precarious situation has made her consider leaving her husband and raising their three-year-old child alone.
“He conned me into getting the HELOC so that he could have access to cash and he burned through it really quickly,” she admitted.
Ramsey confirmed her suspicion that this is grounds for divorce. He said he believes her husband must take drastic steps to salvage the marriage at this stage, including professional help to tackle his gambling addiction.
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Gambling addiction
Roughly 1% of America’s adult population is impacted by gambling disorder — a compulsive need to gamble despite the consequences, according to the National Council on Problem Gambling. Another 5 to 8 million (2-3%) adults have mild or moderate gambling problems. The council estimated that the total social cost of this mental health crisis is $14 billion annually.
“We've worked with addicts for 30 years,” Ramsey said. “We are not addiction specialists but I'm afraid I've watched them a long long time.” He said he sees further financial destruction ahead unless Jill’s husband can get professional help to deal with the issue. He must also relinquish control over the family finances.
Unfortunately, Jill said her husband is resisting therapy. If this continues, Ramsey added she must prepare for a divorce, give up her life as a stay-at-home-mom and restart her career.
“‘I'm going to work on it myself’ is the famous lie of every addict,” Ramsey said. But this is the end of the road for Jill if her husband doesn’t change.
According to Los Angeles-based law firm Emily Rubenstein Law, to overcome financial infidelity, you need to identify the common red flags, such as one partner becoming obsessive about getting the mail, or overly concerned about financial hardship.
Spouses or partners need to communicate honestly, have shared goals, stick to a budget and if worse comes to worst, there are counselors who can help facilitate the conversation.
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