Episode introduction and news
Steve Rhode: Welcome back to the Get Out of Debt guy. I’m Steve Rhode, your old authentic Get Out of Debt Guy, and with me as always is Damon Day, the new, beefed-up Get Out of Debt Guy.
Damon Day: Hello everyone.
Steve Rhode: Today might be the hardest episode we’ve ever recorded because it might make you, if you can relate to what we’re going to talk about, feel just a little bit uncomfortable. But we have solutions, because today we are talking about how to talk to your partner about a financial situation or debts that they know nothing about. This means there is someone in your life who doesn’t know. Maybe it’s your partner or someone you love who remains in the dark about your financial reality. First of all, we don’t judge. This is a safe place. You know somewhere in your gut that this secret can’t last forever. Today we are going to give you a step-by-step plan for having this conversation. Not perfect and not painless, but in a way that gives your relationship the best possible chances.
Steve Rhode: I have this money personality test at getoutofdebt.org where you can go and find out what your approach to money is. That is important in these conversations. I also have the Debt Confession, a place where you can anonymously type in your debt fears and get them off your chest. People have told me how much it eased the pressure. I invite you to take advantage of both things.
Damon Day: So they type it in and it’s anonymous. Where is it going?
Steve Rhode: It’s not going anywhere. It goes between your soul and your psyche, that’s where it goes. People have said some of the most incredible things: openly and simply honestly for the first time. Getting it off your chest and feeling like it’s there and putting it into words can be a huge step forward in identifying what you’re afraid of.
News: Higher-income Americans are falling behind on payments
Damon Day: This article is about higher-income Americans who are behind on payments. And it goes on to say why: it’s the economy, stupid. People with higher incomes don’t have as much experience hitting the wall and dealing with it. It is no more shame, no more fear, no more anger. It’s just when it’s new and you’re not used to it and you haven’t found a way to deal with it, it can be catastrophic.
Damon Day: Prices are now 25% or more higher than five years ago. A lot of this isn’t just reckless spending. A lot of it is just trying to maintain the same lifestyle, without realizing that the lifestyle was quickly being eroded by inflation.
Steve Rhode: Much of our self-esteem is caught up in what’s called the bandwagon effect. We identify with a group of people who all live the same life. And then all of a sudden, when it hits the fan and you have to turn it back, you just feel terrible.
Damon Day: They find themselves spending five, six, seven thousand dollars a month paying off debt. And then they cut their pensions to keep everything going. If you are in debt and are considering a personal loan to consolidate credit cards, or if you are considering taking money out of your 401k, call me first. There are much better strategies than taking money out of your pension and trying to get it back on track – especially if you don’t change your lifestyle at all, because all that will do is put you back in the hole in a few years.
Steve Rhode: You can reach Damon at damonday.com. Book a free consultation with him. No fear, no shame, no judgment.
News: Forbes Advisor’s problem with paid content
Steve Rhode: I wrote an article on CBS News that did the same thing. You’ve got Forbes Advisor – Forbes magazine, the age-old trusted, reliable magazine – has a division called Forbes Advisor, which essentially sells ads, leads and affiliate marketing through the goodwill of the Forbes name.
Steve Rhode: Forbes Advisor has disclaimers – you may want to look for them – and they say that inclusion on their site does not constitute an independent review of the company. But you’ll probably land on a page called “best debt relief companies” and they’ll be ranked first, second, third. They do disclose that the position is influenced by how much the company pays.
Steve Rhode: Basically, you have a whole bunch of ads from debt relief programs that aren’t obvious ads. They look like articles from Forbes. They’ll have a catchy clickbait headline and be buried in there somewhere: “Oh, and call XYZ company because they can negotiate your debt.” The whole thing is an advertisement for a debt settlement company, written to make people think they are reading a real Forbes story.
Damon Day: People hear the word “nonprofit” and think it is free, just like a publicly funded entity. That is 100% not true. Nonprofits are not how you run your business; it is your tax status. The only difference is how much money Uncle Sam gets.
Steve Rhode: In the debt world I don’t care how much they make. It’s about the quality of the advice they give. Credit counseling groups will protect you from other programs because sometimes debt settlement is the right approach. And sometimes bankruptcy is the first thing you think about.
The main topic: how to tell your partner about hidden debts
Steve Rhode: Financial secrets destroy you. When you think about how much energy it takes to hide this secret from your spouse or partner, whoever, it is simply untenable. It will just continue to weigh you down. The longer the secret continues, the more pressure and the bigger the explosion at the end can be. Secrets create distance, even if the other person doesn’t know what’s going on.
Steve Rhode: You can’t implement a real solution while perpetuating the lie. You don’t have to rush to tell your spouse or partner, but talk to someone about it first.
Steve Rhode: Timing is really crucial. The time to blurt out that you are experiencing this financial pressure is not during a fight. And not just before going to sleep. Not at the supermarket. The best time is when you are both calm and rested; at least you have the chance to be heard.
Damon Day: It is always best to approach them with what is going on, but also show them what the solution is. Because if you go to them without a solution, keep this in mind: you have been thinking and worrying about this for months, probably years. Imagine dumping it cold on your partner’s lap and expecting them to wrap their head around it and not panic because there is no solution. If you go to them with the solution in hand, they can get to that point of acceptance much faster.
Steve Rhode: These are the key phrases to include in your conversation: “I take responsibility. I should have told you earlier. I am determined to solve this together. Let’s do this together.’ You don’t have to blame anyone else. You don’t have to minimize. You don’t have to make excuses.
Damon day: In most cases, you both dance together. There are plenty of accusations. It doesn’t matter how you got to where you are now. What is important is what will you do together in the future?
Steve Rhode: I had a deck built on the back of my house, and when something went wrong, the owner called me and said, ‘Steve, I take full responsibility. This is my fault. I will do whatever it takes to fix it.” And it immediately deflated me. Stepping forward by taking responsibility and providing solutions instead of just a problem – that changes everything.
What to expect after the conversation
Steve Rhode: You work like a saint, take responsibility and start the conversation. And it doesn’t immediately become a fairy tale. There may be some anger – and that’s fair. Let them be angry. Let them get hurt. Let them get icy for a while. But you are strong. You have a plan and they come along. I’ve seen more relationships fail because they didn’t deal with it before they had to sell the house.
Steve Rhode: A gentleman came to me who was so ashamed of his debts that he could not propose to his girlfriend. They had been together for seven years. She gave him an ultimatum: unless he could be open about his finances, she would leave him. She left him. He could never overcome his shame to have that conversation. He lost the love of his life because he couldn’t talk about it.
Damon day: The thing you fear will happen if you have this conversation, but in the end it will happen – but with a much bigger explosion. As if a process server is knocking on the door. Not the way you want your partner to find out.
Damon day: Give them space to process it. Don’t just say, “Here’s what’s going on, here’s the solution, are we good?” You have to give them time. Make them the partner in solving this problem, not a bystander. The relationship you have after this conversation is more honest than the relationship you had before.
Steve Rhode: Sometimes the debt secrets stem from gambling or substance abuse – and then it’s a much bigger conversation. But it’s important that you get to a point where you can have that conversation, because if they come together with their partner and say, ‘This is what’s going on, but this is what I want to do’ – then more often than not it doesn’t work out.
Steve Rhode: The secret you have kept protects no one. It’s just delaying and making the fire bigger. It isolates you and erodes your relationship. The conversation will be difficult. But what comes next – the honesty, the partnership, the shared problem-solving – is so much better than where you are now. You can do this. Damon and I both believe in you.
#partner #hidden #debts