Nearly one in four Americans are keeping money-related secrets from their partners, according to a recent survey by Bankrate. That could mean hiding anything from a spending splurge to having a secret credit card, bank account or debt. For millennials and Gen Zers, financial infidelity is even more common. Nearly two-thirds of Gen Zers and more than half of millennials in married or live-in relationships admit to having kept a financial secret from their current partner at some point, compared with 29% of Gen Xers and baby boomers.
Having it Both Ways
While less than 20% of Gen X and boomer couples keep their finances separate, 43% of Gen Z and 31% of millennial couples maintain separate finances, according to Bankrate. Even if you prefer having separate accounts, consider setting up “yours, mine and ours” accounts, says Ted Rossman, senior industry analyst for Bankrate.
Under this arrangement, each partner has some money—either a percentage of each paycheck or a certain dollar amount—that is theirs alone. In addition, the couple sets up a joint account for shared expenses, such as housing costs. Beyond that, both partners agree to discuss any withdrawals from the joint account that exceed a set amount. For example, any purchase over $200 from the “ours” account needs to be discussed first. The parameters you choose will vary depending on your budget and your preferences. This method of sharing and separating simultaneously is especially popular among Gen Zers and millennials, Rossman says.
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Alternatively, if you’d rather keep all of your finances separate, consider divvying up expenses in terms of spending categories. For example, one partner might cover housing costs (such as mortgage or rent), while the other covers groceries and utilities. You may also want to allocate expenses based on each of your salaries.
Let’s Talk
There’s still a fair amount of stigma and shame when it comes to the subject of debt. Most people would rather discuss their weight, religion, or political views than talk about how much money they owe, according to a survey from CreditCards.com. But even if you choose to have separate accounts, your finances will be affected by the amount of debt you bring into the relationship. Your secret debt may be discovered when you and your partner apply for a car loan, a mortgage, or even an apartment rental because, in those situations, both parties’ credit reports are often checked.
It may also be difficult to talk about spending. “I think budgeting is really stressful for couples, and I think part of the reason for that is that everyone comes to the relationship with a different experience with money, and everyone handles that experience differently,” says Sam Gorelick, managing financial planner for Brunch & Budget, a financial coaching and planning firm.
When discussing spending with your partner, she says, avoid framing the conversation in a way that suggests you’re criticizing the other person’s spending habits or looking over their shoulder. Focus instead on asking yourselves what you want to accomplish together, such as buying a house, having a child, or saving for your child’s education.
For my partner and me, communicating early and often about our finances has proved to be key to maintaining sound financial habits. When we have something to discuss, we often pair the task with an activity, such as going for a walk or out for a coffee, which makes it a little more fun. Gorelick recommends setting up a regular time to discuss finances and suggests keeping the discussions short and sweet.
“When you spend 45 minutes to an hour talking about finances together, things get more emotional regardless of how you feel about all of it,” she says. If you keep it short, she adds, you can usually keep the conversation civil and productive.
For budgeting tips and other money management tools, check out apps designed for couples, such as Honeydue (www.honeydue.com) and Qapital (www.qapital.com).
