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How willing are we to talk about money? Many of us are perfectly willing to talk a lot about others' money: the cost of government programs, the cost of living, our personal taxes, and public policy on taxing business profits.
What we don’t talk about is our personal money.
Imagine announcing your salary, net worth, or credit card debt at a public gathering or posting it on social media. What feelings come up? It would be normal to experience emotions like humiliation, panic, or shame. Those feelings may be so overwhelming that you disassociate and feel nothing. Talking about our personal money is not supported by our society; it’s considered something that just isn’t done.
On the other hand, we tend to expect couples to be completely open with each other when it comes to money. In most cases, that expectation is reasonable and useful. Keeping financial secrets within a marriage can adversely affect the relationship for three out of four marriages, according to a survey by the National Endowment for Financial Education cited in a CNBC article by Jessica Dickler published February 12, 2020.
The article also cited a survey from CreditCards.com that found 44% of couples keep secrets from each other around money, most often "spending more than they feel their significant other would be comfortable with." It's also common to feel a need to hide debt from a partner. "To justify those money secrets, 36% cited the need for privacy or the desire to control their own finances, 27% said the issue never came up and 26% said they are embarrassed about the way they handle money."
Any secret around money that you would feel ashamed to have your partner discover is an example of financial infidelity. Yet respecting one another’s privacy and autonomy is also important. Distinguishing between secrecy and privacy can be complicated for any couple and even more so for those in non-traditional families or second marriages.
One option that works well for many couples is for each partner to have an equal personal allowance to spend in any way they wish. Whatever the amount that fits the family budget, having this separate money to spend on themselves is important. This money is clearly private.
Other situations are less clear. At times, limits on a partner's knowledge constitute privacy rather than secrecy. Consider these examples:
The couple has agreed to keep their income and assets separate and has established a method of sharing the expenses that are their joint responsibility.
One spouse owns a separate business with which the other spouse is not involved. It’s reasonable for the non-owner spouse to be kept informed of the business’s earnings, significant changes or problems, and the like. The details of its day-to-day affairs aren’t necessarily the non-owner’s concern.
Spouses in a second marriage have children from previous marriages and have brought separate assets into the marriage.
In any of these examples, it’s not possible to define a one-size-fits-all boundary between privacy and secrecy. Each couple needs to draw that boundary for themselves, depending on their circumstances.
The key to deciding whether to treat a money issue as secrecy or privacy is the reason behind the decision. If you don’t have a lot of energy around the matter one way or another, it’s probably a privacy issue. If you would feel embarrassed, ashamed, or otherwise uncomfortable with your spouse knowing something, it’s a potentially destructive secret.
There’s a simple way to judge: if you really, really don’t want to talk about it, talking about it is probably exactly what you need to do.
Rick Kahler, MS, CFP®, CFT-I™, ChFC, CCIM, is founder of Kahler Financial Group, a Rapid City, SD-based fee-only Registered Investment Advisor.
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Advisor Perspectives welcomes guest contributions. The views presented here do not necessarily represent those of Advisor Perspectives.
