My husband has a social security disability and I just retired. He used our savings without my knowledge and lost part of it by making the wrong investment decision.
We own our house and he now wants to use a mortgage of $50,000 to repay his withdrawal. I think this is a bad decision, but he said that this is the purpose of home equity. I just want to know what to do, because I am now at the boiling point of this situation.
No, you won’t build home equity so that there is a piggy bank to raid when you lose money from a bad investment that keeps your wife secret. Follow your instincts, not your husband, when it comes to money. He has shown that he has not made wise financial decisions.
Your husband spent your money without your consent. The fact that you don’t want to take on the mortgage is enough to make me say, no, don’t take on the mortgage. You are the person whose trust has been violated, so when you are trying to recover from this mistake, what you feel comfortable with is more important than your husband’s opinion.
Even if you tell me that you two are equally responsible for losing the money, I will still vote against the mortgage.You may live on a fixed income, so adding a mortgage to your portfolio will force you to tighten Retirement budgetBut I also think that if there is a new mortgage, it will be more difficult to move forward. Every month, you will receive a bill that reminds you of your husband’s stupid way.
Your problem is twofold: you have to figure out how to rebuild your savings after your husband lets you lose $50,000. But your husband also violated your trust. He needs to earn it back.
When it comes to saving, unless you urgently need cash, consider a home equity line of credit (HELOC) instead of a mortgage. This way you can use your home equity when you need it, but you only need to pay interest on the funds actually borrowed. If you use it, you will pay a higher interest rate than a mortgage. However, if you do not need the full amount, at least you will not pay $50,000 in interest in one go.
If you have extra money in your monthly budget, try to rebuild your savings. But your husband needs to withstand as many shocks as possible. If he makes discretionary purchases, he should reduce the scale as much as possible to rebuild your treasury. If he has any precious properties that can generate additional cash, he should consider selling them. This is a problem he created, and he needs to do everything he can to lighten your burden.
Even if you think your husband has made a mistake in his judgment, you need to make sure that there are no other unwelcome surprises waiting to be discovered.
You two need to check the balance of each investment account, bank account, and credit card together so that you can accurately confirm what you have and what you owe. Choose a date each month to check each account together.
If you suspect that there may be other financial secrets, such as debts that you don’t know about, please ask your husband to take out his copy Credit Report exist Annual Credit Report.com. It is free and only takes a few minutes. If this gives you peace of mind, he should be happy to do so.
You and your husband need to agree on how to make major financial decisions in the future. Working together to develop a budget that includes the categories of supplementary savings is the key.
But I also suggest setting a threshold so that both of you promise to tell each other when you withdraw or spend more than a certain amount. For example, not only can you agree to abide by the budget, you can also inform the other party before withdrawing or charging more than $300. When you check each account together every month, you can abide by this agreement with each other. It is much easier to make wrong financial decisions when you think your spouse is not paying attention.
Hope this is the first time your husband keeps you secret. But tell him clearly that this will be the last time. It’s time for him to do some work to win your trust back.
Robin Hartill is Penny Hoarder’s certified financial planner and senior author.Send your tough money questions to [email protected].