Is secretly spending money the same as cheating on your partner? Depends who you ask...
I was interviewed for a Newsweek article last month about financial infidelity and whether I thought it was a huge problem. What does it mean about your relationship if one of the partners has a secret credit card or hides their debt? What does it say when you buy something then go home and hide it?
As a financial planner, I look at finances on a household level. I want to know where each person banks, where each person shops, where each person invests. And yet, I'm surprised when I meet couples who keep everything separate and don't share this information with each other.
They're not wrong. There's no wrong and right way to run your finances but there's reason to be honest and open. Our assets and liabilities reveal a lot about who we are as individuals. These accounts demonstrate our anxieties, our fears, our hopes and our priorities.
When you fall in love and decide to merge your lives, you're building trust in one another. Trust that you will take care of each other, provide for each other, and support each other. How can you create this trust and still keep your finances completely private?
The best way to embark upon a trusting relationship is to share your accounts, combine your spending but be willing to maintain your independence on issues that matter the most.
In practical terms:
Keep a 'House Account' for combined expenses and a 'Slush Fund' for personal spending.
The 'Slush Fund' is a few hundred or a few thousand dollars depending on your spending. It's for gifts, impulse purchases or fun things that you don't think your partner should pay for. It's private, you don't need to ask permission or clear the purchase with your partner beforehand.
You and your partner trust each other to use the slush fund responsibly and not abuse it. You trust each other to share the bulk of the household expenses paid through the House Account.
Ideally, this intentional planning means both partners feel respected as individuals and don't feel compelled to sneak around in the future.
Starting a new phase as a couple? Looking to improve your household finances? This is a great time to create a solid financial plan!