Over 2.7 million Australians are hiding purchases from their partners equating to approximately $1.6 billion each and every year that’s not being disclosed. It’s no wonder that financial stress levels amongst Australians are so high and that arguments over personal finances are one of the leading causes of relationship breakdowns. This week I explore some of the common signs that your partner is hiding purchases from you, what some of the impacts can be and how you can start to take proactive steps as a couple to combat this financial infidelity.
First, let’s explore the warning signs
- New items just pop up in your home
It’s often easier if you’re living together to notice new purchases that seem to pop up around the house. There is nothing wrong with discretionary purchases being made, particularly if you’ve discussed and agreed an amount each month that you each feel comfortable spending on whatever makes you happy, however this can be a real problem if you’re exceeding this limits all too often. If you are noticing random new purchases popping up around your house, be sure to approach the subject delicately as it’s likely that your partner will feel that the purchase is perfectly justified.
- Your partner doesn’t let you see the bills
A common warning sign will be if your partner intercepts the mail such as the credit card bill or bank statement before you get a chance to see it. Whether it’s gambling, spending on nights out or just simply spending more than they should be, your partner hiding the bills from you is a clear warning sign. This is just to say that you shouldn’t have your own bank accounts and agree on discretionary spending amounts for each of you that you don’t need to disclose, but if they’re hiding spending from the joint account or credit card, this needs to come to an end.
- You discover new debts, credit cards or bank accounts
It is all too easy, particularly in Singapore and other parts of Asia, for us as Australian expats to set up a new bank account or sign up for a new credit card quite quickly. If your partner is spending recklessly, signing up for new credit cards, this can not only have a negative impact on your overall savings, but could also create a significant burden when it comes to your partner’s credit score and therefore your joint borrowing capacity. This could lead to being able to borrow less, or being hit with a higher interest rate because the lender views you as a more risky borrower.
- They don’t want to have the ‘finance chat’
I always recommend that couples should be discussing their personal finances at least once per month, but more often if you feel comfortable doing so. If your partner is consistently trying to avoid having the chat about personal finances, this can be a clear warning sign that something is not quite right. This could be because they’re spending more than they should be, have larger debts that they may not have told you about or are just embarrassed about their current state of their personal finances.
- Your partner doesn’t want to speak to an Adviser
If you want to seek advice from a professional financial planner, but your partner consistently refuses to do so, this could in fact be a warning sign that they don’t want to be in a position of disclosing their personal finances in front of you. By speaking with a qualified professional, this can help you get a greater understanding for both partners of exactly what is going on with your personal finances and how you can ensure that they’re aligned to your overall financial goals.
- They can’t seem to explain their low or diminishing credit score
I would recommend that you check your own credit score on a regular basis. Many providers will allow you to do so for free once per year. If you find that your partner’s credit score seems to be declining and they can’t explain why, this could be a red flag that they have greater personal debts that they’re not telling you about, don’t pay off their credit card on time or are regularly applying for new credit cards or other facilities. A low and diminishing credit score can have a significant impact on your overall borrowing capacity.
Now, how do these red flags impact you..?
Financial infidelity can have a wide range of both financial and non-financial impacts on a relationship so it’s impact that you tackle these issues as soon as you find them.
- Your borrowing capacity can take a significant hit
If your partner is regularly applying for new credit cards, carries a high balance on their credit card or fails to make repayments on time, this can have a significant impact on their credit score and therefore your borrowing capacity. Overspending resulting in bank account overdraft facilities being used can also impact your overall credit score. If you’re planning to invest in property in particular, taking negative hits on your credit score can have a significant impact on your ability to secure finance at attractive rates. It’s important to disclose your credit facilities to your partner, and ensure that you both help to motivate each other to pay them down regularly and avoid penalties and negative hits to your credit score.
- Your savings goals aren’t being met
Have you started to wonder why your initial calculations about how much you needed to save and for how long just don’t seem to be being met..? If your calculations were correct, this may be because your partner just isn’t committing to the level of saving that you initially agreed to. Sit down with your partner and review why this is taking place. Perhaps the level of savings that you agreed to just isn’t feasible for one member of the relationship. Whatever the reason, review it as soon as possible and identify a solution before it’s too late.
- The spending addictions become too great
Personal spending for some people can be just as addictive as many other substances. If your partner is taking out new credit cards, hiding the bills from you or simply not disclosing their spending, this can be a red flag for the fact that they’re spending on items that they don’t want you to see. If this spending is on items that are addictive, this could quickly escalate and you could find that your partner has taken on a level of debt that is insurmountable and the only way out is bankruptcy.
What’s the solution..?
The clear solution to financial infidelity is communication. It’s important for many people to have some level of autonomy with regard to spending, so I recommend that you set a limit that each partner is allowed to spend without telling the other each month. If you want to exceed that amount, then sit down and discuss it. If you find that too many of the potential warning signs are popping up, it’s time to sit down with your partner and have the discussion about how their financial infidelity is making you feel and the impact it’s having on your relationship. Don’t leave it until it’s too late.
To Your Financial Success!
Jarrad Brown is an Australian-trained and qualified Fee-Based Financial Planner with Australian Expatriate Group of Global Financial Consultants Pte Ltd providing specialist financial advice and portfolio management services to Australian professionals in Singapore. Jarrad Brown is an Authorised Representative of Global Financial Consultants Pte Ltd – No: 200305462G | MAS License No: FA100035-3
Australian Expatriate Group is a division of Global Financial Consultants in Singapore providing specialist advice to Australians living abroad.
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General Information Only: The information on this site is of a general nature only. It does not take into account your individual financial situation, objectives or needs. You should consider your own financial position and requirements before making a decision.
*Please note that Jarrad Brown is not a tax agent or accountant and none of the content outlined here should be taken as personal advice. You should consult your tax agent and financial adviser to review your current personal finances and financial goals to consider whether this strategy is appropriate for you.