Financial secrets: What guilty purchases are you hiding from your other half?

Suzie, a young nurse I’d been advising for a couple of years, was wracked with guilt. Blushing, she showed me the things she’d been hiding from her husband: Shopping receipts for acoustic noise canceling headphones ($150), a bundle of hot yoga classes ($199) and tickets to an open-air concert ($250). A laundry list of little luxuries, all bought for a price that would have made him wince. Little white lies of omission, at worst, yet she felt disproportionately ashamed. Not because of the overspending so much as the secrecy.
I persuaded Suzie to bring her husband along to our next consultation, where she would have the opportunity to come clean about her furtive buying habits—and encourage him to be open about his guilty secrets, too. Financial openness rests on four pillars that I like to refer to as the big DISS: Debt, Income, Spending and Savings. Being transparent about all four is key, I believe, to a happy marriage. And here’s why:
Debts – Before tying the knot, couples are more likely to ask each other about their romantic history than about their credit history, yet both can be relevant to your decision as to whether or not to say “I do.” After all, past behavior is a good predictor of future conduct. Whether your potential spouse-to-be shoulders massive debt is more crucial, especially since they may need to dip into your household income to pay it off. Even if you join together in debt-free matrimony, one spouse might rack up credit card debts on their own, in a way that directly affects the other party. And when it comes to divvying up assets in a divorce, the liabilities you incur may be treated the same way as the assets you acquire while married: In other words, jointly owned. That’s why you owe your other half total transparency about your unpaid student loans, credit card balance and other liabilities which undermine your household assets.
Income – Not every married couple files their taxes jointly, and separate bank accounts can be healthy. However, when one spouse fails to be upfront about their sources of income out of fear, a sense of privacy or plain embarrassment, it can lead to distrust and division. Depending on the state you live in, your household earnings may be divided 50/50 in case of divorce. As a happily married couple, you should have a conversation about how to fairly enjoy the money coming in.
Spending – Do you want your spouse to know about all your guilty purchases? There are two schools of thought on this. One says that, as a marital unit, every dollar must be accounted for on the marital balance sheet. So, if I buy an overpriced sandwich using money from my own checking account, funded by a paycheck that I alone earned, am I somehow squandering my husband’s money, too? Our household income consists of both my income and his. As a family we have financial obligations, to supporting our parents, making our home more comfortable, and funding our children’s education. Ergo, I have an ethical obligation to share every shameful transaction history with him. Another school of thought recognizes that strictly speaking, what’s mine is his, but keeping track of every last dime is the reductio ad absurdum of spending transparency. In the interest of saving time and petty point-scoring, it’s far better to agree on a discretionary budget for both of you, so you can indulge your individual whims without the guilt. A household budget plan can be drawn and redrawn to allow for guilty pleasures and little luxuries, separate from saving goals, so they never compete with one another.
Savings - Do you know how much your spouse has in their 401(k)? Some spouses prefer not to disclose how much they built up in savings while single, or even how much they are contributing to their retirement plans while married. However, contributions to 401(k) plans and IRAs may count as marital property, in the eyes of the law. The plan is to build a life together, to retire as a couple, so there needs to be a basic openness and honesty between life partners, in savings as in other areas.
It’s not always easy squaring your individual needs with those of your spouse, children, and extended family. Maintaining your own bank account, sources of income and savings is not only possible—it’s necessary. While you are stronger as a married or family unit, you should never lose your financial independence. After all, you never know what might happen down the road. The key to keeping your relationship strong, however, is a constant, mutual honesty about your financial selves, messy and embarrassing as they are.
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April 15, 2019