Cheating

When Dorothy and I got hitched, back when phones had wires, only sailors or criminals wore tats and man buns hadn’t yet been invented, we combined our money. We had none, so it didn’t take long. One joint bank account. One credit card account with two cards.

The pattern – combining funds and assets – never changed. Over time as we accumulated more, bought houses, made investments, started businesses, got old – there was never doubt. We were an economic unit. Transparency brought trust.

Why were we like that?

Maybe because we married youngish (21). Perhaps because we were uni students with zero reserves and no assets or steady income. Or it could have been the times. Our parents didn’t keep financial secrets from each other, so why would we? Just a Boomer thing, maybe?

Beats me. But it worked. And over the past years, as I’ve been thrust into the marital meltdown of many clients whose money I manage, it seems financial trust among couples is a collapsing thing. One thorn comes when someone gets an inheritance and hordes it from their partner. Usually it’s a woman. At that moment the union frays a little.

Why people agree to get married, intertwine their lives and have families without ever fully sharing finances is a mystery. In our society it seems money is more personal and cherished than your body. You surrender control of it more reluctantly. Often, never.

In a world of challenges, with inflation, higher rates, stupid real estate values, debt and risk, surviving and achieving goals is hard enough when you work with your partner. So how much harder are you making it when you don’t?

But that’s the case. Especially among the young. Poor kids. Don’t they know?

Since Americans count stuff like this, we have a report on how many actually keep financial secrets from their partners. Overall, a shocking number – four in ten – have committed financial infidelity. Currently 12% have a secret credit card. An equal number spend more than their partner would allow, and don’t tell. One in ten have hidden debt and almost two in ten have a clandestine chequing or savings account.

That’s consistent with my experience in talking with reams of people about their situation. Most people south of 50 don’t quite know how much their spouse earns, what kind (if any) pension plan they’re working on, what’s in their partner’s RRSP or on their credit card balance. It makes it impossible for them, together, to know what future retirement income will be, or how best to gain financial freedom and stability. So, too many never do.

As stated, the younger the couple the more the secrets. No wonder they’re so pissy.

An awesome 63% of Zs and a majority (54%) of Mills keep financial secrets from their spouses and partners. (Only one in three GenXers commit the same crimes.) The irony is that most people (at least according to this Bankrate.com survey) think that financial cheating is at least as bad as personal physical infidelity. Of the 52% believing this, four in ten say keeping a secret credit card, for example, is equally wrong as diddling your neighbour. And 12% say it’s worse.

A simple way of ensuring transparency and trust, of course, is just combining financial accounts. Having one chequing account for household costs, one savings account you both feed, or a joint investment account to prevent overlap, duplication and inefficiency, is a good base. The wrinklies seem to understand this a lot more than the kiddos, as this chart summarizes.

How to tackle infidelity: combine finances

Source: Bankrate.com

So why would couples maintain separate accounts?

After all, it makes planning almost impossible when you have no visibility into your partner’s situation. Chances are you’re increasing risk and lowering returns by having conflicting or overlapping assets. Ditto for missing important ways of slicing taxes, like with a spousal RRS or spousal loan. Looking after each other and your family is far harder without a joint investment account, complementary wills, shared assets or coordinated insurance. In this weird time, how do you possibly save enough to buy real estate without sharing financial details and growing money faster together?

Like, why? Are you hedging your marital bets in case the union fails. A personal stash to tide you over when the union implodes? Does it ever occur this lack of trust and faith may morph into a separation? And if you harbour such doubts about the person you’ve selected as a life partner, did you chose badly?.

If so, stay single. In the end, it’s cheaper.

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