I left my husband with $3 in my account after he racked up $40K in debt on Pokemon cards. How can I protect my finances?
Syedfahadghazanfar/Shutterstock Money problems can put serious strain on any relationship, especially when one partner’s spending habits start affecting the entire household. Imagine Ashley, for example. Ashley’s husband, Jay, has a Pokémon card collection that has gone from a casual hobby to a financial crisis. The couple had been married for 10 years when she learned…
Money problems can put serious strain on any relationship, especially when one partner’s spending habits start affecting the entire household.
Imagine Ashley, for example. Ashley’s husband, Jay, has a Pokémon card collection that has gone from a casual hobby to a financial crisis. The couple had been married for 10 years when she learned Jay had accumulated about $40,000 in credit card debt.
Must Read
The discovery forced them to refinance their home, raising their mortgage payment from about $750 a month to $1,060.
Jay told Ashley he wanted to fix his reckless spending. He closed his credit card and even agreed to try therapy, but Ashley says he stopped going after one week. Meanwhile, the purchases didn’t stop.
In the eight months that followed, Ashley says Jay spent more than $8,000 on Pokémon cards. At the same time, they had no savings left and Jay’s bank account was overdrawn.
Then Ashley lost her job, one she’d held for almost 12 years. She had been bringing in about $5,000 more per year than Jay and losing that paycheck put even more pressure on the household. Her savings account balance is at $3.
When Jay recently came home with two more packs of Pokémon cards, Ashley knew she couldn’t continue living this way. She’s now moving forward with a divorce, has spoken with a realtor and plans to put the house on the market.
For Ashley, the next challenge is figuring out how to rebuild after years of financial strain — starting with just $3 in savings.
How to separate finances with little savings
Ashley is going to have some tough financial decisions to make in the weeks ahead.
The first one is protecting the money she does have. If her finances are still connected to Jay’s, she may want to open a bank account in her own name and make sure any income or benefits she receives are deposited there.
“Separate all financial accounts as much as possible and do not share access to them,” Lili Vasileff, a CFP and certified divorce financial analyst, told Moneywise. She also recommends changing passwords on financial accounts if a spouse has access and putting instructions in writing with financial institutions about how joint accounts can be accessed.
Ashley will also need a clear picture of what she can afford on her current income. That means looking at the bills that keep a household running — the mortgage or rent, utilities, groceries, transportation, insurance, medical expenses — and figuring out what has to be paid first.
Vasileff also said people preparing for divorce should know exactly what it costs them to live, identify all sources of income and make a list of all assets and debts, including who legally owns each one and the current value.
Read More: Are you paying too much for car insurance? Here are 3 clever ways to slash your monthly bill
This is not the time to worry about things like retirement contributions or building a large emergency fund. For someone starting with only a few dollars in savings, the immediate focus is staying current on essential bills and avoiding taking on more debt.
Ashley may also want to look into any assistance programs for which she may be eligible while she searches for work. Depending on her situation, that could include disability resources, unemployment benefits or other programs designed to help cover basic expenses.
Once her income is more stable, she can start thinking about saving again, even if that begins with a small amount.
That kind of cushion matters because many households are only one surprise expense away from financial trouble. The Federal Reserve found that 59% of adults (1) experienced at least one major unexpected expense in the previous year, while 16% said they had not paid all of their bills in the prior month.
For Ashley, the goal right now isn’t fixing everything at once. It’s making sure the financial problems that led to the divorce don’t follow her into the next stage of her life.
What happens to debt when you get divorced
Ashley will also need to make sure Jay’s spending doesn’t create more financial problems for her after the divorce.
What happens to the debt depends on where they live, whose name is attached to the accounts and how their divorce agreement divides marital finances.
She’ll need to collect the financial records that show where things stand right now. That includes the mortgage documents, bank statements, credit card bills, tax returns, retirement account statements and any loan paperwork.
The accounts they share will need attention, too. Joint credit cards or lines of credit can become a problem if new charges continue while the divorce is being finalized.
Vasileff recommends making sure a spouse does not take on new debt or use your access to credit during the divorce process. She also suggests running credit reports frequently and making sure both spouses review them.
Ashley may also want to review her credit report to make sure she knows which accounts are connected to her name.
The home will be another major piece of the puzzle. Since Ashley plans to sell the house, she’ll need to know how the mortgage, sale proceeds and any remaining debts will be handled as part of the divorce. A divorce attorney or certified divorce financial analyst can help explain what applies based on the laws where she lives.
“Do not relinquish control or responsibility for your own financial well-being to someone else,” Vasileff told Moneywise. She recommends prioritizing financial goals, creating a roadmap and getting professional help when needed so people are prepared to make informed decisions.
The money already spent won’t be recovered, but separating the accounts and understanding the remaining debt can help Ashley avoid more financial surprises later.
You May Also Like
Join 250,000+ readers and get Moneywise’s best stories and exclusive interviews first — clear insights curated and delivered weekly. Subscribe now.
Article Sources
We rely only on vetted sources and credible third-party reporting. For details, see ourethics and guidelines.
U.S. Federal Reserve (1).
This article originally appeared on Moneywise.com under the title: I left my husband with $3 in my account after he racked up $40K in debt on Pokemon cards. How can I protect my finances?
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
To provide the best experiences, we use technologies like cookies to store and/or access device information. Consenting to these technologies will allow us to process data such as browsing behavior or unique IDs on this site. Not consenting or withdrawing consent, may adversely affect certain features and functions.
Functional
Always active
The technical storage or access is strictly necessary for the legitimate purpose of enabling the use of a specific service explicitly requested by the subscriber or user, or for the sole purpose of carrying out the transmission of a communication over an electronic communications network.
Preferences
The technical storage or access is necessary for the legitimate purpose of storing preferences that are not requested by the subscriber or user.
Statistics
The technical storage or access that is used exclusively for statistical purposes.The technical storage or access that is used exclusively for anonymous statistical purposes. Without a subpoena, voluntary compliance on the part of your Internet Service Provider, or additional records from a third party, information stored or retrieved for this purpose alone cannot usually be used to identify you.
Marketing
The technical storage or access is required to create user profiles to send advertising, or to track the user on a website or across several websites for similar marketing purposes.
