Stop taking all the responsibility for this upon yourself.
Tell her you are sorry to spring this on her but your standard of living will HAVE to go down, as your income has gone down. It's basic math, really! Then ask her to come up with a financial plan and that you will go along with it, so long as paying off the debt is the top priority.
Sorry, but I've never heard anything so ludicrous as to think that you can maintain a certain standard of living and pay debt down at the same time. Unless your income goes up at the same time, this aint gonna happen, kwim?
I too hated to be told how to spend money. Somewhere along the way, I managed to swallow my pride and listen to my H--who obviously had our best interests at heart. In the process, I became more ma-toor as a wife (allowing yourself to take direction from your mate is not all that bad...if he's stronger financially then what was my problem? Only that I wanted what I wanted.) and also learned a lot about managing money. Currently we have a 15 yr mortgage and no debt, except for one car payment. Although recently I have been harboring dreams about buying some real estate to rent, for profit. I am still trying to decide on real estate MOGUL or TYCOON but I need input from Mandksdad, because I understand he recently did this with his wife.
Anyway, I digress. The point is that your wife can learn to be more frugal and work WITH you in paying down the jointly accumulated debt. Be strong and don't let her weasel out of this. She needs to grow and you will actually be impeding this process if you bail her out of the situation.
Good luck with the convo. My best advice is to go in with an open and charitable heart. Be open to hearing her ideas. Try to compromise on issues that you don't really care about. Force her to come up with ideas and don't automatically "fill the space" of the convo if she is not offering any ideas. Let the silence be her guide that you are not going to White Knight her outta this. Involve her in the process as much as possible. If you use figures, keep them at a minimum (ie, our expenses are 10 billion a month and our income is 5 billion a month...I'm interested in getting your input as far as what areas we can cut corners?)
My H used to draw up these elaborate charts and they drove me nuts. I wanted the bottom line..how much were we short and then I could go about thinking of places to curb spending and cover the shortage. This became a way of life for me, I'm happy to say.
Was she on board with your business to begin with? That is the only thing I can think of as to why you would be embarrassed or feel bad about telling her, Help me think of ways to change our financial setup..it isn't working any longer.
