Most people have a few secrets from their significant other. Some are benign like the chocolate stash you have hidden for "emergencies," or that you secretly love This Is Us and watch it alone after your partner goes to sleep.
Other secrets can do real damage to a relationship. Financial secrets fall into that category, though there are different degrees of severity. It's one thing to understate how much that new leather coat cost or gloss over exactly how much you spent on dinner. It's another thing entirely to have hidden bank accounts, debt your partner does not know about, or other big-ticket financial secrets.
A major financial secret can take down a relationship by undermining trust. Despite that, about one in five Americans (18%) are not transparent with their partners when it comes to their finances, according to a new study by The Ascent.
When should you share?
Partners who share finances and expenses should talk about their budget. One important thing to agree on is what level of expenditure requires the approval or at least awareness of the other person. Men and women had slightly different takes as to what level of spending should trigger a notification or a joint decision.
Men felt that a purchase of $261 or more requires letting your partner know, while women thought the number should be $227. Men believe that any purchase hitting $498 or more should require joint approval, while women set the bar a little lower at $427.
In reality, where to set this bar and when transparency is needed depends greatly upon each couple's financial situation. If you're well off, have little debt, and lots of disposable income, then you may have a much higher threshold for needing to talk to your partner about spending.
Some couples also take the approach of not co-mingling all of their finances. Each partner might put a certain percentage of income into an account for joint expenses and have total freedom over the rest of their money.
The system isn't important. Talking about your finances and being open, honest, and transparent is.
What should you do?
Talking about money can be uncomfortable, but it's important. A couple needs to jointly agree on priorities in order to manage their finances. For example, is paying off student loans a priority? Do you plan to buy a house? Does one of you have better credit than the other?
Be open and lay all your cards on the table. Make compromises and make sure each partner gets a say, even if one produces more (or all) of the income.
Not being transparent about your finances is a fancy way to say you lie to your partner. Lies get exposed and that's generally not good for a relationship.
As soon as possible, sit down as a couple, lay out your income and expenses, and then try to make a budget. Get help from an expert if needed and identify both short-term and long-term goals. It's possible to save for a house, a vacation, and retirement all at the same time if you have a plan (and a lot of discipline).
Once you start the discussion, keep it going, and agree on rules like when the other person needs to know about a purchase. Make changes as you go through life and work as a team to accomplish your goals.