Published: March 01, 2008 08:41 pm      

Pay up!

‘Til debt do us part’: Debt and marriage: how to survive

Editor’s note: This is the second of a continuing series of stories about getting out of debt and using money wisely.



Statistics for the past seven years show that financial stress is the number one cause of divorce in America, said Bill Arrrowood, financial counsel for Kentucky River Foothills’ Financial Partners program.

Most of that stress comes in the form of credit debt.

“Credit is so available,” he said. “Everyone is wanting to hand you a credit card and no one is asking if you can afford that card.”

The average American newlywed who has borrowed money for school will typically graduate with $15,000 in student loans and their average credit card debt is $9,000, he said.

When it comes to paying off debt, many are approaching it in the wrong way, Arrowood said.

“A log of (recent college graduates) will start trying to invest money in 401ks when it would be best to start attacking their debt,” he said. “They have to change their behavior. Their tendency is to take the highest interest rate, but a lot of times, you get tired of trying to do it and stop. It’s kind of like being on a diet. We recommend that you start with your smallest balance and keep doing it until you beat them all.”

An eight-step financial plan is available for free at www.newlywedfinances.com. The list encourages newly married couples to calculate their credit score, begin saving for retirement, create a monthly cash flow and review life and disability insurance needs to name a few examples.

The site features “A Few Financial Rules of Thumb” that include: saving at least 15 percent of your gross salary for your retirement; making sure that monthly mortgage payments do not exceed one half of your monthly take-home pay; and knowing that if you are paying minimum payments only or having a credit card payment that exceeds 20 percent of the monthly take-home pay, you are carrying too much credit card debt.

Foothills Community Action Partnership’s Financial Partners is a local, 12-week financial class program that teaches married couples how to make the right money decisions and how to achieve financial goals.

The Financial Partners follows the concepts of Dave Ramsey’s Financial Peace University.

In his book “Financial Peace Revisited,” Ramsey begins the chapter on money and marriage with a look at the differences between the way men and women handle money.

“When it comes to money, men tend to take more risks and don’t save for emergencies. Men use money as a scorecard and can struggle with self-esteem when there are financial problems. Women tend to see money more as a security issue so they will gravitate toward the rainy-day fund,” Ramsey writes.” (Page 196)

The program teaches participants how to make a cash-flow plan for each paycheck, how to develop a cash envelope system and how to pay off debt.

Classes are taught by accredited counselors in a one-on-one setting and/or in a group setting and include videos, workbooks and group discussions.

The program is available in Madison and several surrounding counties.

Classes are going on constantly, but it’s best to call ahead and be placed on the waiting list, Arrowood said.

For more information about the program or to be put on the class waiting list, call 624-4116.

Ronica Shannon can be reached at rshannon@richmondregister.com or 623-1669, Ext. 234.