Communicating your finances

CNN recently aired a report (view it here) about couples lying to each other about their debt. One of the persons interviewed runs a blog www.dollarbuydollar.com and says he hid his debt from his spouse - a debt of over $70,000. I thought I would make a few comments about this report.

The problem, according to CNN, affects about a third of American couples. This is certainly no small number, and I believe it indicates an urgent need to address this. Certainly no marriage can last without full and open honesty. Money is at the top of the list when it comes to the causes of divorce, and any dishonesty in that area would in my opinion be absolutely devastating to the couple's trust.

In our marriage I am the one who generally runs the finances. I track our spending, income, and usually pay the bills. I also write everything down and keep it in a printable report that I share with my wife on a regular basis. Usually this is just once a month. I also run our credit reports once a year, you can get them for free at www.annualcreditreport.com (I would like to take a moment to mention that annualcreditreport.com is a Federal-backed site and the only place to get your free annual report as granted to you by law, other sites such as freecreditreport.com - which you may see advertised - is not actually a free report. There is no reason to sign up for monitoring unless you are already a victim of identity theft and no reason to pay for your report, however you do have to pay for your scores and they will run you about $8 per score. It also does not affect your credit score to pull your own report/score).

Going over your credit reports not only makes good financial sense, but it virtually eliminates the possibility of a spouse hiding debt from one another. As one of the callers told CNN she was 6 months late on one of her bills. Even a 30 day late payment would show up on a credit report and certainly any unusually high debt balances would result in a low score.

It is very simple: be honest and open with your spouse, and do not be afraid to communicate about your finances. At the very least, handling an out of control spending problem or a hidden debt would be far easier with the love and support of your spouse.