Is money keeping you together or tearing you apart? A recent survey by the National Endowment for Financial Education found that, 40% of all adults in a committed relationship admitted to lying to their partner about their spending habits and 68% said they hide purchases from their partners. The survey conducted by Harris interactive examined overall trust issues within couples who are combining or have combined their finances in a current or past relationship and described the types of financial deception - from hiding money, purchases and bank accounts to lying about the amount of debt owed or money earned.
Financial Infidelity occurs when you keep a secret about money. Whether it's how you spend it, how you save it or how it makes you feel when you use it in a particular way. Here are some signs and tips to help regarding your discussions around money:
Do you lie about purchases or daily spending? Half of all adults said they have hidden a minor purchase from their partner or spouse. This could be the new dress we stuff into the back of the closet and then insist we've had it for years. But small lies often compound over time to become larger and more harmful deceptions so consider an agreement where each individual controls an agreed upon amount of discretionary spending which they are allowed to spend however they please. Any amounts over these agreed upon limits are discussed and negotiated within the context of family goals and household resources.
Do you know what bank accounts, investments, retirement and life insurance you and your partner hold? Last year a Fidelity study stated that on average only 35% of couples jointly develop a plan for retirement and only 17% have complete confidence in their spouse to manage the finances if they were to die. Identifying and sharing your individual and joint financial resources is critical to maintaining balance with your family's needs, lifestyle goals and security. Make time to assess how you are doing financially and talk about your values and your future together. Plan out your joint goals for the next 5 years such as: buying a home - financing college - an anniversary trip. Agree on your priorities, timeframes, and costs and discuss how you are going to fund your shared goals.
Do you believe that the person who makes more money should have more power and control over how it is spent? In the survey conducted by Harris, 57% of respondents felt that money is used as a means of control in their relationship. Keeping score with money only guarantees a build up of resentment. Household contributions are not just monetary and it's important to keep a relationship on equal footing. Look at income and expenses from a household perspective rather than an individual one. Agree to share your finances on a regular basis and work as a team to discuss money in the context of your shared goals and values.
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Source: National Endowment for Financial Education "Three in ten Americans admit to financial deception with partners"
The information provided is general in nature and may not apply to your personal investment situation. Individuals should consult with their chosen financial professional before making any decisions. Investment services are offered through Wells Fargo Advisors, LLC member SIPC.
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