This was how I took control of my financial life many years ago. If it helps you get control of your finances and your life, great. If you find my methods distasteful, fuck you in advance.
About 5 years before the end of my first marriage, 30 years ago, I started having trouble paying all of the bills. Credit card balances were climbing fast, and, the savings accounts were declining.
Digging through my finances I found that my (now) ex-wife, was spending a lot of money. Among other things, she bought very expensive gifts for the kids and others that I was not aware of. Substantial sums were for drug/alcohol items.
Edit #1: I tried to discuss the finances with my wife and find ways to get things under control. While she agreed to improve, her actions were just more of the same. It became clear that she was never going to help. This would never get better unless I took charge of it.
My goal was TOTAL control of everything financial. With this in mind these were my steps.
Make a list of all income items, their source and the ownership.
Make a list of all Assets; house, bank and savings accounts, CD’s, etc, and the ownership
Make a list of all debts, and the ownership of the debt.
Understand the rules of ownership that affect the assets and liabilities you want to control.
The simple rule is that any asset that is in your name only, is controlled by you. Additionally, joint assets, though not totally owned by you, are under your control. For example, you can empty a joint bank account without your spouses signature.
The rules for debt are very similar. If a debt, like a credit card is in her name only, which is fairly rare, you can’t do anything with it. However, if it is (a) your card or debt, or (b) your card or debt and she has use of it (not joint), or (c) a joint card or debt; in all of these cases you can close the account, or, close it to new charges. Remember to check for home equity lines of credit, as these often lie dormant.
TIP: If you have an employer retirement plan, such as a 401k, 403b, 457 plan, spousal approval is required if you withdraw or borrow from the plan. If trying to withdraw funds during a divorce, you still need her signature. Guys have had to pay ransom to their soon-to-be-ex to get their own money.
Open a Post Office Box. You will use this address for every NEW account that you set up. Just don’t use a private personal mail box like FedEx. It is harder to forward mail to and from this type of box.
Apply for a new card in only your name.
Open a new checking account in your name only, and order checks for it. Ordering checks is important as there are many things that you cannot do with starter checks.
Open a brokerage account in your name.
Prepare letters to every debt you have authority over. The letter should say to close the cards to NEW purchases immediately., and, that you will continue to pay the balances .
Prepare the same letter to the bank for any bank loans or open equity lines of credit on real estate.
Prepare a letter to each credit reporting agency requesting a credit freeze
Tell the wife there was a breach on your checking account and she needs to get her paychecks sent to a new account the bank is setting up for you. If she has somehow found out it was not a joint account, tell her that the bank wanted to get the account set up ASAP and they were going to add her later.
Stop all automatic payments to and from the old joint checking account and move them to the new checking account.
Change your paychecks to the new bank account.
Go to the bank and close the joint (household) checking account and deposit the proceeds in my new checking account.
Close all the joint savings and CD accounts and reopen them in your name
Close the joint brokerage account and move the proceeds to your new brokerage account.
Mail the letters to the credit cards, bank debt accounts and credit agencies via certified mail.
Have the Post Office forward ALL of the home address mail to the new POBox.
Step Five; The Reveal
I gathered all of the kids and wife and said:
We are spending more than is coming in. I have no intention of working until I am 90 years old, when I make plenty of money. As a result, I am taking complete charge of our finances, and, I expect your complete cooperation. I have closed all of the charge accounts. I have closed the household accounts. All of the remaining accounts are now in my name. You cannot access any of them.
I will provide you (wife) with cash for the household expenses, gas grocery etc. This will be $300 per week for now. Keep the receipts of your purchases. I will use those receipts to replenish the fund weekly. We can review this fund each week.
When additional items are needed, I will provide additional cash as requested. If, for example, I give you $500 for clothing for the kids, I must see the purchases, and receipts, for approval. Make no mistake, extravagant items, or items that I do not approve of, will be returned immediately.
One of the things that amazed me, was that there were still three more charge accounts that I did not know about. The wife also managed to open two new charge accounts in the first week. Because of the forwarding of the mail to the POBox, I got to see those statements, and, close them.
Another thing I learned was how much she was abusing drugs and alcohol. It was amazing the level of it. I visited the 3 closest liquor stores, and found she had two “in house” charge accounts. Closed them.
After it was all tallied, the credit cards exceeded $100,000 balance. The home equity line of credit was maxed out.
In short order I had plenty of cash on hand. I paid off the credit cards in just over a year.
I never let go of any of the control after that. I was tested with failure to provide receipts and trying to hide purchases and other things. Once the pattern was established of zero tolerance, it worked well.
One of the up-sides of this was getting the kids to model their new clothes and show the new stuff they got. It was a very pleasant activity that we all started to look forward to. Looking back, that this was so enjoyable, highlights what a shitty atmosphere it was for all of us back then.
Avoid joint assets, joint liabilities and joint agreements, such as leases, and, business ownership or debt. Any asset that is joint, is a gift to her as she the the ability to take it all, legally. Any debt that is joint, is a gift her, because if she refuses to pay, you will be legally obligated to pay it.
Co-signing is MUCH Worse than a Joint Liability. Co-signing on any debt offers you 100% exposure to the debt, and, unlike a joint debt, offers you absolutely no ownership rights. The trap that so many miss is when you co-sign certain types of student loan applications for your kids.
Today and Forward
Today I am in my 60's and retired from actively seeking income. I retired from the financial services industry. As a private wealth manager, I managed over $200 million of client investments. When I sold my practice, I retired. My net worth is several million and zero debt, including no mortgage for many years.
NEVER in this second marriage, was there any question about who was in charge of the finances, or who made the financial decisions. I consult with her, but I always decide.
There is only one joint bank account, and, I work under the assumption that it is a gift to her.
The only other joint asset is the paid for house, and, I assume it is a gift to her.
For many years she paid the bills, but this was more of a bookkeeper function than actually making any decisions. I always checked to see what she was doing.
My frame, when it comes to finances is, was, and always will be, absolute total control.
Edit#2: It is important to realize that this whole situation I was coming from behind here because of my own failures to lead. These failures were:
*1 Not taking responsibility for the family finances in the first place.
*2 Dumping that responsibility on my spouse.
*3 Not checking on, overseeing, supervising my spouses handling of the money.
*4 Although I already knew she had alcohol issues, I did not pay attention to how much that problem had grown.
*5 Jeopardizing my children’ college funding and their future.
*6 Jeopardizing my financial future and retirement.