In a new national survey, we asked people living with a spouse or partner about their money secrets, hidden bank accounts and undisclosed splurges.
Roughly 1 in 5 Americans who are in a relationship admit they have spent $500 or more without their partner’s knowledge. A smaller number — 6 percent — have taken the subterfuge a step further, leading financial double lives by maintaining hidden checking or savings accounts or using secret credit cards.
We asked questions about couples’ financial secrecy in a national, random telephone survey of 843 American adults who said they were currently living with a spouse or partner (see methodology). If extrapolated out to the general population where 120 million Americans live with spouses or partners and have bank accounts, that means about 7 million Americans have kept those accounts secret, committing financial infidelity.
Hidden accounts are “way more common than people think,” says Paula Langguth Ryan, whose company, Compassionate Mediators, helps negotiate settlements with creditors. Last year, she had a client in Maryland whose husband had opened numerous credit card accounts in her name as well as his, using a post office box to receive and pay bills. She found out about the deception only after the marriage dissolved, when she went to get credit on her own and uncovered judgments against her for unpaid bills.
Much more common, Ryan says, is failing to tell a spouse the true amount of outstanding credit card debt. In one extreme case she dealt with, a husband in Colorado racked up $82,000 in debt on five credit cards in an attempt to save the family business — without telling his wife. The truth usually emerges only after some financial disruption to the family, she says.
Causes for financial infidelity
Paula Levy, a marriage and family therapist in Connecticut who’s also a certified public accountant, says it’s common for couples to keep at least some financial secrets from each other.
“In most cases, the secret is mostly to avoid conflict and to make sure they get what they want,” she says.
Video: Overcoming financial infidelity
Couples don’t need to share every single financial detail of their lives with their partners and having some independence is fine, Levy says. While surveys show that about two-thirds of married couples maintain joint checking accounts, many others prefer to keep separate accounts.
Regardless of the arrangement, problems arise when people omit major financial facts or start hiding or lying about their purchases. “The minute somebody finds out about it, there’s a lack of trust, and that undermines the whole relationship,” she says.
The CreditCards.com survey unearthed other interesting tidbits about relationships and money. For instance:
Are men more secretive? Men are more likely than women to have secret credit cards or bank accounts and to spend big money without telling their partners. Eight percent of men admitted to having had secret accounts, compared with 5 percent of women. Men were almost twice as likely as women to say they spent $500 or more without telling their partners: 26 percent of men, versus just 14 percent of women.
Do youth hide more? Younger people are more likely than older people to say they’ve had hidden accounts or large, secret purchases. A full one-quarter (25 percent) of respondents aged 18-29 say they have made purchases of $500 or more without telling their partners, compared with just 15 percent of those aged 65 and up. Seven percent of those aged 18-49 said they had secret accounts, compared with 4 percent aged 65-plus.
Is big spending acceptable? Many survey participants say they’re tolerant of their partner spending money without telling them. Thirty-one percent of men and 18 percent of women say they would have no problem with their partner spending $500 or more without letting them know.
At the other end of the spectrum, 31 percent of respondents said they think their partners should be able to spend only $100 or less without telling them.
Couples’ key ingredients: honesty, trust
Relationship and financial counselors say there’s no single correct way for couples to approach finances. Some couples have a general sense of financial goals and boundaries, while others have more formal arrangements.
As with any part of a relationship, finances should be based on honesty and trust, mixed with an understanding that compromise is essential, they say. Even simple steps such as setting aside time to discuss finances and life goals can help.
When Wilmington, North Carolina, lawyer Dane Scalise and his wife, Katya, began looking at their credit card statements early in their marriage a couple of years ago, they found that without thinking about it, some of their spending was eating into their savings goals. They agreed to cut back: Dane would limit his purchases to occasional books, Katya could spend up to $150 a month on herself as she pleased without Dane’s preapproval, and they would discuss anything beyond those limits — such as major purchases — to see if they really needed to spend the money.
For instance, before Christmas, Dane found a half-off deal on a new shotgun worth $1,500 that he really wanted. But after discussing the potential purchase with Katya, they agreed their finances were better off without it.
“In order to best defend our money from ourselves, we said, ‘We’re going to set up these parameters, and we’re going to stick to them,'” Scalise says. “We didn’t want to have a disagreement about these things. We said, ‘Let’s come to some agreement on what we can spend money on without having to consult the other person or worry about it.'”
Two years into his marriage, Scalise, 30, says the arrangement has worked out well. He and his wife rarely fight about money, he says.
|5 WAYS TO AVOID FINANCIAL INFIDELITY|
|Just because you don’t have a secret bank account doesn’t mean that you have a healthy financial relationship with your partner. Thomas Nitzsche of ClearPoint Credit Counseling Solutions, a national nonprofit financial counseling service, offers these tips to improve your household finances:|
|1. Consider financial infidelity as serious as any other type, as data show the consequences can be equally grave.|
|2. Be aware of and honest about your financial health. Address problems early and seek help so they do not escalate.|
|3. Regularly discuss the household finances. Make financial decisions as a team and agree on an amount that each can spend “no questions asked” (as long as it fits into the monthly spending plan).|
|4. Create checks and balances by taking joint responsibility or taking turns paying the household bills.|
|5. Agree that all account access will be shared, even if the account is individual (bank, credit, investment and so on).|
Princeton Survey Research Associates International conducted the random telephone survey on behalf of CreditCards.com. Interviews were conducted by landlines and cellphones Jan. 8-11, 2015, of 843 adults who said they were currently living with a spouse, partner or significant other. The results have a margin of error of 4 percentage points.