Financial Secrets and Money Mistakes Within A Relationship
One mistake we often see overlooked by individuals is the discussion of money with their partner. We know that money conversations with your partner, whether new or old, can get messy and feel uncomfortable; however, having those discussions is so incredibly important to the wellbeing of your financial life. It has become so common that people let secrecy and financial infidelity get in the way of their relationships that they ultimately derail their financial future as a whole. We have long been discussing the intersection of love and money and how to incorporate communication into your relationship to avoid some of these mistakes.
Let’s take a look at how common financial secrets within a relationship actually are. TD Stories’ seventh annual Love and Money Survey released a survey that noted despite what couples may share about their relationship and comfortability with money, money secrets are at an all time high. This year’s survey polled over 1,400 U.S. individuals who were either married, divorced, or in a serious relationship. The survey found that “In fact, nearly one-third of Americans (32%) are keeping a financial secret from their partner, an 11% increase from 2021. With individuals keeping secrets from their partners, we have seen scenarios in which individuals have pulled loans from their 401(k)’s and unraveled their retirement plan, lived in a house they truly cannot afford, and built up unnecessary and hidden debt. As you can see, these secrets are not worth the financial consequences and sacrificing your financial security and future.
In a previous podcast episode with Music City Pysch’s David Pearl, we discussed how to have transparent, honest, judgment-free, conversations with your partner. These conversations are crucial in establishing a strong and honest foundation for the relationship as a whole. It’s very fascinating that even though most of these respondents answered that they feel comfortable discussing finances with their partner, many of them have no intention of sharing their money secret(s). The survey also found that respondents are prone to “letting things slide” and pushing off these financial conversations instead of having these tensioned conversations.
Given the somewhat shocking data listed above, it seems obvious to state the importance of communication and honesty within a relationship. Whether it’s a big purchase you may be hiding, old student debt you’re embarrassed about, or a secret bank account you are keeping, take a step back to uncover why you feel you need to be secretive about your finances and attempt to find a way to bring it up to your partner. If you find yourself in this position, start small and work towards establishing an open and truthful line of communication with the person you are sharing your life with. For more resources and tips on how to facilitate these conversations, check out our podcast episodes with David Pearl or email us at info@shermanwealth.com with more questions. If you would like to discuss your personal or family financial situation, schedule a complimentary intro-meeting here.