Will a payroll advance help fuel secret financial struggles?
If you’re hiding your spouse’s use of payday loans, it’s only a matter of time before your money problems are revealed unless you make a few changes. The quick cash advance may have solved that urgent problem, but the cost of the loan can potentially hurt other demands once the payment date arrives. How can you lie about debt problems when you’re not the only one earning or spending? It does not constitute a solid financial base.
Lying about debt in general happens more often than you think. Someone splurges and tries to cover it up knowing their spouse may not approve. In fact, these lies are passed on to financial advisors. Hiding debt out of shame or even living in denial will not help anyone make a positive debt situation. Debtors must come to terms with the amount owed to secured payroll creditors or lenders to create a plan to rectify or prevent damage.
You may want your image to represent a “basic” state, but if you’re shopping for new clothes or going out to dinner, you’re far from it. No extra means no extra. If you have a spouse who uses and hides, how long will it be before the other person finds out? What plan could your financial advisor create for you when you don’t have the most accurate numbers to work with? If you suffer from a spending addiction of any kind, you’ll need to get to the root of that problem before you can focus on the financial side. Very often, addictions are connected to deeper emotional disturbances. Withdrawing credit cards is not a cure.
People will find ways to get money to feed addictions. Online payday loans and pawn shops are just two examples of easy-to-access cash. How can you explain the expense of finance charges or missing household items? You can hide things from your financial advisor, but it’s not so easy with your spouse.
Managing income with cost of living expenses is a priority within a good budget. Your advisor may create an “other” category for you to use at your discretion. This amount will depend on the ability of your income to cover cost of living payments and work to reduce debt. If your spending budget is smaller than you’d like, you’ll need to pay off that debt to free up more. You’d be surprised at how many ‘other’ categories they can contain when there’s no income earmarked for bad debt income. Your mortgage, student loans, or even interest on car payments are not considered bad, as these expenses help life. Credit card or alternative lender debt is bad. The longer you keep debt unpaid, the more income you’ll waste on interest. Now is the time to face the reality of your financial decisions.
Sit down with your spouse and put all the cards on the table, even if your spouse doesn’t help manage the books. Where does your money go? Go through bank statements and debt statements. What costs are considered necessary and find out why the debt is so high. If credit card debt is high due to medical costs, you may want to seek advice on how to limit the problem. Instead of using credit cards to pay your doctor’s fees, you may want to talk to the billing office and work out a payment plan directly through them. Not only will you be able to save with a lower interest rate, but the debt will not count as negative with the credit bureaus. Credit utilization rates are calculated using credit card debt, not a doctor’s office. Whatever you do, be sure to stay current with the plan created by the billing office as you would any other bill.
When both parties are on the same page, a financial advisor’s plan will work better. You can help each other spend less, get rid of debt, and prepare for future emergencies.
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