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Debt Management Advice

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  • fatlittlepig fatlittlepig 
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    Status: Physician
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    Joined: 01/26/2017

    The debt situation is not great but it’s not catastrophic. Declare war on the credit card debt. What is she spending money on? Good luck man.

    #220938 Reply
    Avatar jz 
    Participant
    Status: Physician
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    Joined: 01/09/2016

    Some wives treat husbands like a mule……….a rented mule.

    #220942 Reply
    Avatar hightower 
    Participant
    Status: Physician
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    Joined: 12/07/2016

    What is stopping you from sending large payments to your debts each month?  Is she actually spending thousands of dollars too much each month?  Where is your money going exactly? That might help shed some light on the problem.  Is it possible to look at what you spent last month, for instance, and list it out?

    #220961 Reply
    Liked by artemis
    Zaphod Zaphod 
    Participant
    Status: Physician, Small Business Owner
    Posts: 6180
    Joined: 01/12/2016

    Thanks all for responses.

    Rough numbers: 2018 my AGI was 349k.  She made about 15k as per diem RN.  My 403b is maxed to get 4% match and my company contributes a decent amount to a 457f. I have access to a 457b pre-tax that I didn’t know I could use, so I have not been contributing.  Current debts are student loan of 199k at 6.5% on IDR (original was 225k), mortgage of 260k left of 330k at 3.1% 15 year fixed, 25k on my car (0%), 40k on her car (0%), 20k 403b loan, 13k IRS debt, 17k family loan, and 70k credit cards (all over 20%).  I am focusing on credit cards and IRS right now.  IRS debt incurred because our company did not withhold any taxes from her income, and I had too many withholdings, and they did not tax my student loan match (20K per year) appropriately.  This year they taxed my match correctly, they are taxing her income (not working much this year), and I have 0 withholdings.  I am tracking to make sure they are taxing appropriately.  I have hired an accountant for this year as well.  If I had her on board, we could clear debts pretty fast. We are currently only on my income because of an ankle surgery for her that went awry. She is probably out at least 6 more weeks (she developed a surgical infection and is on IV antibiotics at home right now).  Our out of pocket maximum is met for the year thankfully.  Medical costs this year have been big, but I’ve stayed current.

    We have started in counseling.  I’m not entirely sure how helpful the counselor has been so far.  She is focusing on working on our communication techniques and has not really gotten into the “details” as she calls it.  In the meantime, we have had more fights about money, so I’m assuming it’s a matter of time that it will come up.  I’m planning to bring it up today when we meet.  This is our second counselor we have tried.

     

    I would love to do Dave Ramsey.  I think our situation is perfect for his plan (but I’ll avoid his investing advice). I have already found an FPU class in town.  She initially was interested, but since then he has become a cuss word in the house.  At this point, I would love some sort of Dave-ish compromise, and I’m hoping that enough sustained pressure and she will meet me halfway.  I’m probably not willing to go as extreme as pulling money from the checking account.  I think doing that would fracture the marriage beyond repair.  I’d almost rather go bankrupt than risk that.

     

     

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    Focus only on the credit card debt. IRS debt is going to be much lower rate, and so is principal. Focus on the most important thing. Credit is the only concern at this time.

    Can you do a 0% transfer to a different card? 20% on 70k freaks me out.

    #220973 Reply
    Zaphod Zaphod 
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    We have started in counseling. I’m not entirely sure how helpful the counselor has been so far. She is focusing on working on our communication techniques and has not really gotten into the “details” as she calls it. In the meantime, we have had more fights about money, so I’m assuming it’s a matter of time that it will come up. I’m planning to bring it up today when we meet. This is our second counselor we have tried.

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    Look. I’ll just be very frank since Im sure you dont want to get divorced and have bigger issues. Details arent important right now. If you cant effectively communicate or always make the other person angry in your approach you are destined to failure. You’re inpatient and arent even listening to the counselor, slow it down.

    First realize money is likely one of the top reasons for marital discord and divorce. Usually resentment gets going in between those, so its your job to stop things from escalating.

    You can do this by listening to both the counselor and your spouse and try to hear what theyre saying and where theyre coming from. She should do the same. If you cant get this part down, nothing else matters cuz the ending is already written, just timing is unknown.

    I will assume for the sake of argument you want this to work and no one is truly really bad and a detriment. In some cases things cant be fixed, but most probably just need some understanding and compromise.

    You need to figure out your values and goals and how that informs your day to day. Does the wife drastically spend or you just not value her choices in how its spent? Theres a big difference. I dont value what my wife spends money on most of the time, its garbage to me. I do value my wife though and everything else she does, so some level of “wasteful” (only my opinion of course) spending is totally fine, cuz I want her around. So first you should probably admit that you got in this hole together and its not solely one persons fault, etc…

    I mean you dont owe the IRS money for any other reason than you chose to ignore the obvious. I mean you didnt notice no taxes or think that was odd? Thats basic stuff. Since there is credit card, cars, family, basically all forms of debt I struggle to believe you werent a fully willing participant until you ‘woke up’. I’ve been there. You have to help her wake up but she will do so in her time. You will not be helping her along by trying to disproportionately place blame on her. Even if it is ‘her fault’, you might still get the desired outcome with some tactful conceding of certain things. Often these things become animus and the point of it is long gone in favor of winning and pride. Dont let that get in your way.

     

    Avatar artemis 
    Participant
    Status: Physician
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    Joined: 12/02/2016

    We have started in counseling.  I’m not entirely sure how helpful the counselor has been so far.  She is focusing on working on our communication techniques and has not really gotten into the “details” as she calls it.

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    That’s to be expected.  Communication is at the heart of your problems.

    and I’m hoping that enough sustained pressure and she will meet me halfway. 

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    I don’t think pressure is what will work. Have you heard the fable of the sun and the wind? While not exactly analogous to your situation, I believe your tone may be causing her to push harder against you.

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    This is a very astute observation.  I wonder if your wife feels you are blaming her for your joint financial woes (something she may be feeling especially sensitive to right now, as she’s currently not working due to illness and may be feeling useless because she’s not contributing financially at all at the moment).

    #220985 Reply
    Avatar artemis 
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    Status: Physician
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    Joined: 12/02/2016

    So first you should probably admit that you got in this hole together and its not solely one persons fault, etc…

    I mean you dont owe the IRS money for any other reason than you chose to ignore the obvious. I mean you didnt notice no taxes or think that was odd? Thats basic stuff. Since there is credit card, cars, family, basically all forms of debt I struggle to believe you werent a fully willing participant until you ‘woke up’. I’ve been there. You have to help her wake up but she will do so in her time. You will not be helping her along by trying to disproportionately place blame on her. Even if it is ‘her fault’, you might still get the desired outcome with some tactful conceding of certain things. Often these things become animus and the point of it is long gone in favor of winning and pride. Dont let that get in your way.

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    ^This is very wise advice!  It’s important to stress that this is a joint spending problem, and the blame falls on both shoulders (not simply hers).

    #220986 Reply
    Avatar JBME 
    Participant
    Status: Spouse
    Posts: 526
    Joined: 03/26/2018

    OP-okay your money situation is bad but not catastrophic. Do what others said. Here’s that link Johanna referenced:

    https://www.whitecoatinvestor.com/forums/topic/getting-your-spouse-on-board-with-your-wealth-building-debt-reduction-plan/

    I made a comment in there and also supplied a link, all of which might be helpful to you.

    That said, from what you’ve said I think there are bigger issues right now unrelated to finance. Communication is the root cause of the issue I think, NOT money habits. You need to make progress there first. Might it delay improving money habits by 6-12 months? Maybe. But you need to see the forest through the trees-you need to be strategic and do these bit by bit. Tackle the root cause first and then perhaps lay down a plan for finances. Maybe don’t do an entire plan because that might be overwhelming-instead just communicate baby steps. But again, communication on both sides is likely what needs to get addressed first

    #220998 Reply
    Liked by artemis
    Lordosis Lordosis 
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    Status: Physician
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    Joined: 02/11/2019

    I do not see where all the money is going?  You have a good salary.  Your mortgage is not crazy.  Student loans are not crazy.  Even with the car loans and other debt it still seems like there should be plenty of money around.  Private school/Daycare?  Memberships?  Shopping problems?  Major vacations?

    You have to stop the bleeding and I guess I am not clear where it is coming from with the information given.

    Good luck.

    “Never let your sense of morals prevent you from doing what is right.”

    #221013 Reply
    hatton1 hatton1 
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    Status: Physician
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    Joined: 01/11/2016

    Set up a spreadsheet to track your expenses.  Follow the progress as you pay down these debts.  You can do this.

    #221019 Reply
    Liked by Lordosis, artemis
    Avatar artemis 
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    Status: Physician
    Posts: 591
    Joined: 12/02/2016

    ^^^Good advice.  Step 1 in stopping the financial bleeding is discovering exactly where all the money is going.  Odds are there are some things that can be trimmed which won’t have a big negative effect on your overall lifestyle (what your wife fears) but will free up some money that can be used to pay down those loans faster.

    Remember, this isn’t a sprint, it’s a marathon.  Step one of the race is figuring out exactly where your paycheck is going each month, and making sure that the credit card debt isn’t growing.  Step 2 is figuring out a plan which will allow you to pay the various loans off sequentially (starting with the credit cards, as they are the highest interest) without driving your wife completely crazy.

    #221021 Reply
    Liked by Lordosis
    ddswifey ddswifey 
    Participant
    Status: Spouse
    Posts: 74
    Joined: 04/17/2019

    I’ll echo the sentiment of focus on your communication. My husband is the ONLY breadwinner. I’m the bread-manager =) .        I can say that budget can be like a cuss word to some.  I call it a “money plan”   not a budget.    Maybe right now is a time to just give grace since she’s having the health issues.   I would think that is giving her extra stress and when money gets brought up its just “shut down mode”.

    We used to get tense anytime money was brought up but it was because we weren’t tracking and we had no long term goals….. we were just set in mindless autopilot on our spending and saving. I am the nerd in our family and not a spender. We’ve done FPU and were coordinators at our church as well. If all you do is talk about “cut back cut back cut back” then that’s met with major resistance.         What kind of social circle do you run in?? (ie the ways they spend money)…. That can have an effect on women that men do not usually have. Also, YOu need to consider how she related to money growing up (her family’s take on money).  Those all play into how a person relates to money.

    Its very hard for some( maybe your wife) to realize when things are “on fire” bc you see your neighbors, who she may know makes less than you guys, but living high on the horse.   As Drs (and spouses) its very easy for us to become debt-numb.  Sometimes when I need to say something heavy, I will email my husband about it. That way I can get out all my thoughts, and he has a chance to think it thru before we speak about it.   That may not be the “best” communication, but it works for us. Take her on a date and tell her you have no intentions on cutting your life down to “rice and beans” but that you want XYZ in your future. When we started talking about tangible goals it made getting on that plan much much easier. We said “lets do this so you can retire 10 years earlier, lets live like this so we have total financial freedom, don’t have to worry about money, travel when we want to etc.   Paint a picture with your words… Not just talking about budget numbers.

    I'm here to learn

    jfoxcpacfp jfoxcpacfp 
    Moderator
    Status: Financial Advisor, Accountant, Small Business Owner
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    My husband is the ONLY breadwinner. I’m the bread-manager =) .

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    Clever! I am stealing that to use in client meetings – TY!

    Johanna Fox Turner, CPA, CFP, Fox Wealth Mgmt & Fox CPAs ~
    http://www.fox-cpas.com/for-doctors-only ~ [email protected]

    #221047 Reply
    Liked by ddswifey
    Avatar StarTrekDoc 
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    Status: Physician
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    Joined: 01/15/2017

    Sorry you’re having to struggle through this OP.   It’s hard.   Finances is like raising the middle child — can be very difficult to deal with as parents trying to find the common ground.

    You’ve already ID’d the communication issue and that’s the basis and foundation to tackling the issue.  Just like parenting, it takes both to openly communicate and plan to get the finances of the household right.

    One suggestion has folk have mentioned, the household needs to know what are the incoming income and outgoing expenses.   The easiest is to get an aggregator and I really do like Mint and Personal Capital setup as easy setup and easy review of things to review and 3rd party doing the automated reporting of the news.  That’s a start.

    For existing debt, you may want to consult a debt manager too where they put you on a single payment plan instead of all these bit debts.  This is more for the household than for yourself.  What this does is makes folk make a commitment to pay down debt before incurring further debt.     Another way around that if you meet resistance is to refinance and cash out house equity into 30year;  and payout the IRS and credit card debt — a simple consolidation way that doesn’t involve anything fancy.

    After addressing spending and current debt, the last is planning for the kids.   This actually may be the hook where you can get her attention as the kids sound like an agreed common ground.  Use their future planning needs and do simple math extrapolation of $$$ needed to fund those needs while addressing ongoing expenses and debt.   As you already know ===kids are expensive and can easily double your current debt demand.

    Luckily you have a big shovel and can erase the debt fairly easily if you can get buy-in on the expenses.   The parties involved typically don’t know what they don’t know on expenses until it’s spelled out like what Personal Capital does.

    #221053 Reply
    Avatar FamilyFirst 
    Participant
    Status: Student
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    Joined: 05/19/2017

    I did not read every post, but I did see the WCI post about getting your spouse on board. I figured I would drop the MMM one here as well. Good luck, I’m rooting for you both.

    http://www.mrmoneymustache.com/2012/03/22/selling-the-dream-how-to-make-your-spouse-love-frugality/

    #221055 Reply

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