I take it that you're still there trying to work things out. Now is the time to take full financial control regardless of the begging, crying, tantrums and the "if you really loved me you would trust me" crap. You got bills? Do automatic payments straight out of your account. If you have a joint account... close it. Work out how much money you and your wife can have for pocket money each week and split it evenly. Most supermarkets in my country have their own store cards, put grocery money on that each payday and that's it. Make sure that you make out a shopping list and get a receipt, staple it onto the list and then file it and you keep it in a lock box. If you have a cheque book... cancel it. If you have a credit card... cancel it and cut it up. Fuel for the car? Get vouches. The only cash she touches is her own pocket money. YOU HANDLE ALL MONETARY ISSUES. She agrees to it or you go!

I know you have kids, but what are they learning right now? Bad habits from both parents that they will take into adulthood.

The number one reason marriages break up is not because of infidelity but because of money. The biggest reason for monetary problems is lack of respect for it's power. Your wife doesn't respect it. If you took $20 dollars worth of magazines that she buys then ripped them up, it would be no great loss. But if you took that same amount in the form of a $20 note and told her to cut it up, she'd be horrified and say no. She doesn't associate "things" as money. But you know better and she obviously hasn't learnt that. Somewhere she has learnt that bad behaviour or she is filling an emotional need. You can break a habit and learn new ones and you can get help from a psychologist to help her deal with issues. If she wants money to spend, then she needs to get a job to help pay off debt, put into savings and then the rest is hers.

If she finds away to "touch your/family" money again, then you need to take something she really loves and either sell it/give it to charity/destroy it. Get her to agree to it first. She'll probably go "fine" and agree. Firstly, she's thinking that she will be able to stick to her guns, then if she can't, she can talk you out of getting rid of the item. Make sure she picks the item and make sure it's expensive. She sounds as if she's the type of person who has lacked serious consequences as she's grown up. Life lessons are designed to make you grow and sometimes Tough Love is the greatest teacher.

You need to form a binding agreement with your wife as to how you plan to save your marriage. And you need to set a date. eg Oct 18th 2010. But most importantly, it's you who needs to stick to it. She's used to being able to get around you with the money problems and therefore has no major repurcussions to make her tow the line. If you really want a healthy marriage, you must learn to stop enabling her ability to fuel her habit, and she must learn respect for money, for you and what she stands to lose. And should it come down to the wire and she has not fulfilled her obligations to you and your family, then lose she must.