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How to Tell a Loved One You're In Debt

Open dialogue is the key to a clean conscience - if you've strayed financially from a spouse or loved one.

Bring up the word "infidelity" at a dinner party or on a psychiatrist's couch, and you're likely to see the conversation veer off to issues regarding the libido.

But there may be an even more insidious form of infidelity that packs just as much punch as the romantic kind, and can just as easily break up a family.

It's financial infidelity and it's running rampant these days.

A new study by the debt management company CESI shows that 80% of married couples spend money behind their spouse's back - and don't tell them about the purchase. Another 18.5% of the 200 survey respondents included in the study have opened a credit card without their partner's knowledge.

In addition, 38% of survey respondents who do practice financial infidelity say they fear that, if found out, their marriages would disintegrate into separation and subsequently divorce.

Why do so many people hide debt and spending issues from their loved ones? Primarily (and this goes for not only married couples, but for family members, too) individuals don't like conflict. Not only do they fear that being exposed would end valued relationships, they just don't want to get into an argument over their profligate spending habits. Another reason loved ones hide their financials? If it's the primary financial provider of the family that's hiding the debt issues, he or she may be embarrassed, and afraid that they may no longer be viewed as the "big, trusted earner".

Part of it is insecurity, too. In a 2005 survey of 1,000 men and women, Money Magazine concluded that 71% of study participants lied about money. Psychologist, deception expert and study contributor Robert Feldman of the University of Massachusetts said, "People lie because they need to present themselves as competent and worthy. Money is one key way people feel they are valued."

Okay, lying about money to a spouse or loved one is a problem - now what's the solution? We have taken a thorough look at the data, and offer the following tips on talking to loved ones about money, debt and spending.

Be honest with yourself - Nobody can change a toxic situation into a healthy one without admitting they have a problem first. It's not as hard as you think. Recognizing you have a problem doesn't make you a bad person, but failing to take productive steps to redeem yourself is another story. It's best to acknowledge the reality of your situation before you go forward.

Be above board - Opening up and laying your cards out on the table isn't easy if you've been hiding spending and debt, but it's the key first step to coming clean. To get the process rolling, share all of your bills, bank account statements, and credit card receipts. That way all the information is out in the open and you can proceed with a clean slate.

Talk about cash versus credit - The best way to track spending is by keeping a close eye on your bank account and your credit cards. Agree up front with your loved one that you'll set aside one hour per week to review credit card purchases (you'll need to sign up on your credit card company's website to track ongoing purchases) and bank account withdrawals. It's a lot harder to hide a spending spree when the information is laid out for both of you to see in the harsh light of a bank account or credit card statement.

If your spouse or family member brings up "red flags" - be honest - If you have a history of making only the minimum payment on your credit card, or claiming you only use your credit card to earn rewards points, understand that such behavior may signal a "red flag" to your partner. Be prepared to explain how you use credit, and how you usually pay it back. Expect your spouse to do the same. Once the air is clear, you can more easily decide on proper limits on credit card use and repayment strategies.

Make a debt repayment plan - If your financial infidelity has led to serious debt problems, you'll need to discuss a debt repayment plan with your spouse - one that should include a debt relief counselor and one that takes concrete steps to build a budget. As a good faith gesture to your loved one, you can offer to work overtime, or to take a second job to generate some extra income and to help alleviate your debt burden. Make sure to get buy-in from your partner (and vice versa) before taking any direct action.

Offer to get professional help - If you've been hiding debt from a spouse or family member, come clean and offer to get some professional help to resolve the issue. It's important that, as the person who accumulated the debt, you take the first step to contact a debt relief agency (A CareOne Debt Relief Plan is a good option) or a financial advisor. This shows your partner that you are committed to solving the problem and finding ways to work together as a team to beat back debt.

Financial infidelity is a serious trust issue - one that could sow the seeds for marital and family discord for years to come. Get ahead of the problem by speaking honestly with your spouse and/or family members, and developing an agreed-upon plan to confront your spending problems before they sink your relationship.

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