Have you ever lied to your significant other about money or spending? It could have been just a little lie about the how much you spent, or maybe the actual balance on your credit card. Chances are you’ve told one of those little white lies about your finances at least once in your life. While it may have seemed innocent enough to you at the time, the reality of lying about your finances can have much bigger implications not only on your finances, but your relationships, too.
The key to a healthy relationship is open, honest communication with your partner. This honesty is most important when it comes to your finances. Although you may be inclined for many reasons not to share your spending and actual debt with your partner, know that you are not alone with these issues. Here are the top five money lies I’ve encountered in my practice over the years.
1. How Much You Make
By over-inflating your salary and income as a way of puffing up your desirability to a potential partner, you could be in for quite a rude awakening when they find out what you really make. In reality, you’re really only putting your relationship at risk. Lying about how much you make will only encourage you to live outside your means. This is a quick and easy way to put yourself deep in debt and start any relationship on the wrong foot.
2. How Much Money You Spend
So many clients come to me and tell me that their partner has no idea about their debt. If you’re hiding packages in the car or bringing them in when your partner is not around, this is part of that lie. Today more people keep their finances separate from their partner’s and pool an amount for shared expenses. As a result, this lie allows you to hide or not share your spending with your partner. Sure, you might tell your partner that you have a significant income and you pay your bills, but have you told them that the majority of it is going toward your massive credit card debt or your pocketbook obsession? Being open with how much money you spend is just as important as being open with how much money you make.
3. What You Spend Your Money On
Perhaps you do this because you think your partner won’t understand your obsession with shoes or sports teams. In reality, not discussing where your money is going because you think the issue isn’t worth getting into can lead to big problems. This is so common among my clients who have no money at the end of the month and have no idea why when they make decent salaries. Not knowing where your money goes means it’s spent haphazardly on things that may not be necessities.
We all have our “things.” While these aren’t good habits, it’s important to be open about your financial spending habits early on in the relationship. Together, you and your partner might be able to even work together to rid yourself of your poor habit, or make your spending more manageable — or you might find that the spending habits are not ones you can live with long-term. This is better known sooner rather than later.
4. How Much You’re Saving
With this lie, it’s often that you’re not putting enough away. Sure, you think you’re saving, but once the money is in the bank you spend it and can’t understand why the balance doesn’t grow. I know, you have justified this lack of spending because you believe you needed the money for something important, but your savings is not meant to be an ATM machine. Saving is for long-term goals and big-ticket items.
Not telling a partner you dipped into savings or you cut your monthly savings deposit is not honest. Lying to your partner about being prepared to handle a financial hardship (one of you losing your job, for example) or saving adequately for retirement can be incredibly damaging to your relationship. If you’re having trouble setting aside enough money each month for your emergency or retirement fund, try to find a way to budget the savings. Again, consider talking to your partner and working together to identify ways to get the savings back on track.
5. Your Investments
Whether it’s loaning money to a friend to help their startup or making some risky moves with your stock portfolio, making investments without talking to your partner first is a huge no-no. In cases where you’ll be moving a lot of money around, it’s important to talk with your partner first. Even if it looks like a sure thing, not telling your partner means you’re not being honest with your investing and the expectations your partner may have with this money.
I had a client who didn’t have the money to make a payment on a debt, which he was sued for, because he had loaned someone the money instead. He hadn’t told his wife, and he didn’t want us to tell her, either. Loaning someone money under these circumstances — when you have limited income yourself, and not telling your significant other — will lead to nothing short of a precarious position when they find out.
Lying about money only serves to breed animosity between partners and erode trust. It also creates undue stress on the person who is lying. While your lie might bring you some comfort today, it’s only making what could be a simple financial fix into a much larger and more complicated issue.
Make a regular date to sit down and go over your finances, discuss your goals and air your concerns. Gather your financial statements and pull your credit reports and scores (you can get a credit report summary for free on Credit.com). It isn’t necessarily an easy discussion to start, but the sooner you learn to feel comfortable speaking openly about money with your loved ones, the better off you’ll be.
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