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Chris LoCurto

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February 20, 2012

Money, Can You Really Agree With Your Spouse In Business?

February 20, 2012 | By | 12 Comments">12 Comments

Money problems are the number one cause of fights inside a marriage. Some studies show that 57% of the fights inside of a marriage are over money.

So if it’s that bad at home, what happens when a couple works together with the business finances? Well, here’s a very common question from one of our fans:

My husband and his father are running a small real estate management company. My husband hired me to start managing the finances/keeping the books for them beginning in September 2010. After working with their finances for several months now, I see that there is a substantial amount of credit card debt.

I have tried to explain to my husband that I need to apply the principle of the “debt-snowball” to this debt instead of continuing to make several minimum monthly payments that are several hundreds of dollars each. My husband argues with me about this stating that this will destroy the company’s credit rating, etc.

This is the same argument he made with me when I started FPU and told him we needed to start the debt-snowball on our personal credit card debt. In that case, he finally stopped arguing with me and let me go ahead. In terms of the small business, he is being a bit more difficult. I need to be able to show him the specific answer that the debt-snowball is applied in the same manner in a small company like theirs, as it is in personal finance. Please help!

The debt question is one that I get A LOT in EntreLeadership. So many leaders think that people can’t run a business without debt. So inevitably, during my event I will ask how many people are running their business debt free. It’s usually about 30% of the attendees. If people can’t run a business without debt, then how are so many doing it?

There are a few things to consider:

  • What does God say? – The Bible is very clear on the issue of debt. DON’T DO IT! In fact, Proverbs says that if you have gone into debt, get out as quickly as you possibly can. Nowhere in the Bible will you find God blessing someone with debt. Nor do you see Him separating out personal and business. He doesn’t differentiate.
  • It gives me options – Actually, I am a firm believer that debt robs you of your options. When your money is tied up paying off debt, you’re not able to take advantage of situations when they come up. On top of that, you are potentially holding God back from doing some of the things He want to do in His business. (It is His, right?) I have seen plenty of God situations that people weren’t able to capitalize on because they were bound by debt. Going into debt is saying that you know better than God on the speed of growth you should have.
  • But my credit score! – There is only one thing that you need a credit score/rating for – to go into debt. That’s it. It’s there to help you get into more trouble. If you have cash, you don’t need a rating. Besides, you get MUCH better deals when you pay companies with cash. Especially in a time when so many companies are not getting their receivables collected for months on end. Go ahead and destroy the credit rating, it’s not helping you.
  • Proverbs 31 – Who can find a virtuous wife? Her worth is far above rubies. Her husbands heart trusts safely in her; so he will have no lack of gain. Dude, listen to your wife! She’s onto something. Women have a sense of discernment that us guys just don’t have. And like fools, so many guys don’t listen to them when it comes to business. This is a mistake. God has wired them differently than us. Drop the pride and ask for her opinion. You’ll be surprised at how much money, time, and nose bleeds it will save you.

Question: What ways have you experienced this in your life?

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  • http://www.debtbreakaway.com/ safiya

    Admirable work,  well said, Thanks for sharing this great info.
    Keep up the good work……..

  • http://specializingintheimpossible.wordpress.com/ Laura Johnson

    The debt situation that was described is very similar to part of what I found myself in at my last job. My boss had gotten so carried away with charging, etc., it affect everything… I could get him into huge legal trouble if I wanted to :( Saddest thing was, seeing how it damaged his marriage and how his kids are learning his habits.
    If only people cared to learn!

    • http://www.ChrisLoCurto.com Chris LoCurto

      I think that’s the issue. They either don’t want to, or REALLY don’t understand that they need to. Craz.

  • http://uma-maheswaran.blogspot.com/ Uma Maheswaran S

    Though I am single, I can tell you that your advice on “Proverbs 31” was head on. I have seen in many households, husbands not listening to their wives when it comes to decision making. Ego comes in their way.

    It is very rare to find a husband listening to wife when it comes to business matters.

    • http://www.ChrisLoCurto.com Chris LoCurto

      Sad isn’t it?

  • WalkingstickDesign

    For my wife and I, it all comes down to a shared goal and vision for our future. Once we agree on the why (so we can one day live and work in our dream home), the what (living and staying debt free) becomes crystal clear. Great post Chris :)

    • http://www.ChrisLoCurto.com Chris LoCurto

      Great planning!

  • Lily_Kreitinger

    I painfully watched as my dad lost everything he had … twice! First time was personal credit card debt during a crazy economic crisis in Mexico in the 1990s where everyone lost everything to ridiculous credit card interest rates. The second time was when he started a small business and went all out instead of starting small. Prior to that he was accounts payable and receivable director for a major global corporation. We used to say that he could handle millions in the corporate accounts and could not handle thousands in his own checking account. My big lesson from living through that with my family is: DEBT IS A NO-NO! My mom suffered through it with him, trying to talk him into making better money decisions. Our faith and the love we had for each other held the family together, but the impact of the stress on my dad’s health proved to be fatal a few years later. Guys, listen to your wife, kids, friends, partners, neighbors, when we tell you there are better ways to succeed in business than to go into crazy debt. We want you to be successful and ultimately we want you to be around!!

    • http://www.ChrisLoCurto.com Chris LoCurto

      “We used to say that he could handle millions in the corporate accounts and could not handle thousands in his own checking account.” Wow! Powerful!!

  • http://www.ginasmom.com ginasmom

    I see it a lot in my community where the men just want to be “the man” and take care of their families (Good motivation), but they end up going about it all wrong(Wrong execution). They rush into borrowing, and end up owing more than things are worth, and in the process end up destroying their marriages, their business, their lives.

    I truly believe, God gave women, the famous sixth sence especially when it comes to money, truly to be there for men:)

    Men, please listen, especially since this is coming from somebody in your camp (Chris), who has obviously learned the secret to life. Listen to us, we are happy, you are successful and happy, making us even happier….!. It’s a win-win situation all around.

  • http://about.me/jonedlin Jon Edlin

    Love that you added the Proverbs 31 verse! Right on!

    • http://www.ChrisLoCurto.com Chris LoCurto

      Wurd!