A 2014 poll of over 2,000 US adults from the National Endowment for Financial Education (NEFE) and Harris Interactive found that 64% of people in relationships have combined finances.
It also found that of these respondents, a third had lied to their spouse or partner about money, while another third said their partners had lied to them.
An alarming 76% of those who had experienced these deceptions said it affected the relationship, from loss of trust, to arguments and even divorce.
Combining money and deception in cases of “financial infidelity” doesn’t lead to good things — but it clearly isn’t uncommon.
Some of the most damaging lies are:
1. Lying about how much money you make.
“Oh, I’m not sure if I’m getting a bonus this year.”
Refusing to share is just as dishonest as giving an inaccurate figure.
“If you marry someone, regardless of whether you put all your money into one account or separate accounts, you need to know how much is in the total bucket,” explains Valerie Rind, author of “Gold Diggers and Deadbeat Dads: True Stories of Friends, Family, and Financial Ruin.” “How do you do your budget if you have no idea what end of the spectrum your spouse is at?”
The bigger problem: “If the person doesn’t want to tell you, that’s a red flag right there,” Rind explains. “You have to be having those kinds of conversations if you’re going to be married to someone.”
2. Lying about how you earn money.
“This extra cash? The company just started counting any hours after 6 p.m. as overtime.”
Are you earning money through a salary? Second job? Occasional freelance work? Investments? Off-track betting?
OK, you might not be tiptoeing into the ring of earning money from illicit, illegal, or irresponsible choices, but lying about where the money comes from has two problems no matter what form the lie takes:
- First of all, it leaves your partner or spouse unable to to correctly estimate how much money there should be, and unable to notice any missing cash. For that reason, it’s closely tied to lying about how much money you’re making and can be just as damaging — if you’re dishonest about how you’re earning money, it’s easier to lie about how much you have.
- Second, it can make a real mess of your taxes. Especially if you’re signing your name to a joint return, you’ll want to know for what, exactly, you’re legally responsible.
The bigger problem: It’s possible this kind of lie can cover up something much bigger. “If someone is doing something illicit and dealing drugs, you’d want to know,” Rind cautions. “If they’re gambling, it can be a serious addiction.”
3. Lying about your debt.
“I have a few student loans, but it’s nothing to worry about.”
Money you put toward debt is money that can’t be used elsewhere, for you or your partner. Lies about debt can range from whether you have any, to how much, to how long you have to pay, to whether you’re making the payments regularly.
“If you’re tying your horse to someone else’s wagon, you need to know not only what’s coming in, but what’s going out,” says Rind. “If someone has a payoff plan, how long is that going to take? You’re going to need a separate line in the budget for payments, and is that for two years or ten years?”
The bigger problem: A person’s debt can give some insight into how they handle money. “You want to know how a person got into debt in the first place,” cautions Rind. “Was it overspending? Was it a phase where they weren’t used to managing their own money? Or is it part of an ongoing problem? You need to know how somebody runs their finances because that totally affects the whole picture.”
4. Lying about the things you buy.
“This old thing?”
The poll from NEFE and Harris Interactive found that 17% of respondents had hid a purchase from a spouse. Compared to lying about your income or your debt, it may seem pretty harmless, but according to Rind, this is a gateway lie: Once you tell it, you’re on the path to trouble.
“If you know you’re going to be criticised, it’s easier not to tell the other person — that seems to be the logic,” says Rind.
The problem tomorrow: “That can backfire when you wear the new clothing or whatever you’ve purchased and the spouse says, ‘Oh is that new?’ and it leads to another lie and becomes a whole pattern,” she continues. “That’s the problem with lies: You tell one and it kind of ends up leading to another, and that’s the real insidious problem.”
5. Lying about loaning money to friends and family.
“Yeah, the conversation went OK. I told her we just couldn’t afford to help them out right now.”
Beyond the fact that you can’t stand the idea of lending money to your partner’s sister and they feel similarly about your cousins, the problem with lying about loaning money without your partner’s go-ahead is pretty basic.
The bigger problem: “This one is tied in with lying about what you buy: People don’t want to be criticised, they don’t want their partners to say, ‘Why did you do that? We’re never going to see that money again!'” Rind explains.
“But that’s your spending money,” she continues. “It affects the budget.”
6. Lying about having bank accounts your spouse didn’t or doesn’t know about.
“No, this is from an account that I closed years ago.”
Having private, solo bank accounts is one thing. Having secret bank accounts is another.
In the NEFE survey, 5% of respondents admitted to hiding an account from their partner, and 7% said they had been the one ignorant of a partner’s account.
The bigger problem: More problematic than the account’s existence, Rind says, is the reason you have it in the first place.
“Are you foreseeing a problem if you have to have a secret account?” she asks. “Do you have it in the back of your mind that your relationship isn’t going to work out, so you need exit funds? Are you afraid your spouse is going to want to spend that money?”