First, the background:
Three years ago I quit my high-paying job to start a business, which I financed with a home equity line of credit. The business is finally doing reasonably well (knock on wood). It’s been about 6 months since I’ve had to borrow any money and in fact I’ve started paying down the $85,000 I borrowed against the house.
My wife earns a lot less than me and in fact is now unemployed. She also takes care of our two children. The way we handle the finances is that I pay all of the monthly household bills (cars, utilities, mortgage, taxes, insurance etc.). I also give her $430/wk to spend on groceries, clothes for the children etc. I have no idea how she spends this money, which is by design. Since I am a cheap person, she doesn’t like me questioning her expenditures. So the deal was that I would give her a fixed amount of money every week and that would be that.
A little over a year ago, she told me that she had run up about 6 thousand dollars in credit card debt and she didn’t know how to pay it. After a lot of fighting and arguing, I agreed to raise her weekly allowance retroactively. (At the time, it had been $370/wk). This gave her a few thousand dollars to pay down her credit cards. We also agreed that if she got into trouble with her credit cards again, I would not bail her out.
Well, guess what. A few weeks ago she tells me that she now has $8000 in credit card debt and she needs my help. Of course I am furious. And I just don’t know what to do.
The truth is that my business has been doing pretty well lately and I could afford to bail her out, but I don’t trust her not to do the same thing again and again. Also, even if business continues to be good (which is by no means guaranteed), it will take a few years to pay off our home equity line of credit. And then I want to start saving for our kids’ college.
She feels that it’s unfair that I borrow money to spend on my own things and object to her doing the same. However, it seems to me that borrowing money to start a business is very different from using credit cards to buy clothes, haircuts, and takeout food.
Also, she refuses to let me look at her credit card statements. (I told her she was free to inspect my books, bank statements, credit card statements, etc.)
So the question is, what the hell do I do? Obviously any solution that requires me to trust her to act responsibly is unlikely to work.