Aug 26, 2024
In just two years, Jill saw her marriage devolve into what Dave Ramsey described as “hell on Earth.”
Calling in to The Ramsey Show from Las Vegas, Nevada, she described how she recently discovered that her husband gambled away their home equity line of credit (HELOC) worth $100,000 and racked up credit card debt worth $20,000.
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“I'm on the verge of wanting to divorce my husband,” she admitted. The rise in gambling addictions coupled with financial infidelity is ruining family finances across America. Here’s how to identify the financial infidelity and work towards alleviating the stress of hidden debt.
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.
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“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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Vishesh Raisinghani is a financial journalist covering personal finance, investing and the global economy. He's also the founder of Sharpe Ascension Inc., a content marketing agency focused on investment firms. His work has appeared in Moneywise, Yahoo Finance!, Motley Fool, Seeking Alpha, Mergers & Acquisitions Magazine and Piggybank.
