Back in April, I quoted a U.S. News and World Report article that advised “Mad about money? Avoid a Fight”. I explained that every day, in my bankruptcy law offices around Indiana, my colleagues and I deal with couples who are dealing with each other around money issues.
And, after almost twenty-five years of this, I have to admit I’m still not sure about the “Which came first – the chicken or the egg?” aspect of divorce and bankruptcy. What I’ve often discussed in these Indiana bankruptcy blogs is that divorce is one of the three leading causes of individual bankruptcy (and sometimes of business bankruptcy as well), along with medical expenses and job layoffs.
On the other hand, I’ve been very firm in stating that one of the big myths that constantly needs debunking is that bankruptcy leads to divorce. Actually, filing bankruptcy often works the opposite way, because it relieves all the unbearable marital stress that’s been building up as the couple’s financial situation worsened.
I was very interested in MainStreet Financial Planning President James Ludwick’s money communication tips couples can use to reach a compromise when money conflicts arise. I really think these tips might be helpful for business partners as well as for couples in handling financial matters. In fact, as couples – or partners – go through the bankruptcy process itself, these communication tips could go a long way towards moving away from blame and focusing on the future.
Tip #1: “Money Dates”. Set aside a specific time at least twice a month to talk about spending, saving, debt payments, and changes in plans. Begin each discussion by telling each other what you most appreciate about the other regarding finances.
Tip #2: Each partner should ask a money-astute friend for a personal finance book recommendation to read. Then, partners can share ideas from the books with each other.
Tip #3: Use a free online program to track spending and make a budget.
I’m certainly no psychologist or marriage counselor and. I practice law only as a board certified consumer bankruptcy specialist, not as a divorce attorney. But, over my quarter century in practice, I’ve seen it work again and again as couples go through bankruptcy together. Once the burden of indecision about the financial situation is unloaded, they get back to supporting each other.
Bankruptcy is a legal process, but what it’s really about is moving forward in life.