Suzanne Barlyn
A strong financial foundation, however, could have at least minimized the impact of the economy and an unexpected health crisis -- a rule that's true for just about any couple. Perhaps the McMahons could have reined in their spending by talking to each other regularly about their financial goals and habits, instead of talking to Larry King after the debt collectors came calling.
Unfortunately, many couples avoid the conversation, says Brian Day-Lewis, a financial advisor with Lifeline Financial Partners in Tyngsboro, Mass. A lack of communication can lead to financial disarray, he says. Sometimes, spouses or partners just aren't aware of the other's spending -- such as writing checks for children's haircuts or a mulch delivery. In other cases, spouses and partners can be downright dishonest. Day-Lewis says some spouses hide credit card debt from each other. The situation often becomes hostile when the other spouse learns of the problem after the couple is already in a hole. "Then the conversations become serious," says Day-Lewis. "It's not a 'Gee, I spent $1,500 at the mall at Christmastime' problem. Now the situation is 'Gee, I'm $35,000 in credit card debt.' The problem is a whole lot bigger, and the solution is a whole lot uglier." Day-Lewis says to think about your family finances in the same way that you'd contemplate an employment review. Sit down with your spouse or partner at least twice a year and see how you're doing. Determine how much you're bringing in and the money going out. Not sure of the latter? Commit to one month of jotting down your cash expenditures, such as fast food and the kids' piano lessons, on index cards. Then swap the cards, so you can each review where the other is spending cash.
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