Secret Spending: If You Hide Purchases From Your Partner, You’re Not Alone
It always starts innocently enough. Man, woman, young, old, we’ve probably all made an impulse online purchase then stashed in it the closet, or spent more than we’d like to admit on that unforgettable music festival.
We’re all entitled to a guilty pleasure on occasion—it’s your money and you’ll spend it as you please. But secret purchases that weigh heavily on your consciousness could be a cause for financial insecurity and relationship strife. Nearly one in four millennials have hidden purchases from their partner, and 32 percent admit they’re prone to excessive or frivolous spending, according to a Northwestern Mutual study. And it’s not just small impulse buys; 19 percent of poll responders on CreditCards.com said they had spent more than $500 without telling their spouse or partner.
The stresses of secret spending have real impact—but if you’re guilty as charged, you’re not alone. Opening the lines of financial communication is crucial with anyone with whom you share expenses, but younger people with less wiggle room in their budgets can especially benefit from honesty serving as the only financial policy.
Why we spend in secret
Have you ever cut off the tags of a new sweater as if it’s been in your wardrobe for ages? It’s these types of behaviors that can cause financial anxiety.
“Some couples still don’t talk about [money]. It depends on the level of your relationship, your relationship with money and how you were brought up,” says Jessica Moorhouse, personal finance expert and host of the “Mo’ Money” podcast. “We’re afraid of how our partner will react. It’s easier to ask for forgiveness than permission.”
Money makes people feel vulnerable, almost naked, explains Moorhouse, noting the false link between net worth and self-worth “We’re afraid of being judged because we have debt,” she says. Or perhaps you don’t want to admit to your other half—much less yourself—that you’re spending on designer duds instead of funding your 401k.
But when kept in check, maybe it’s no big deal that you never disclosed that much-needed mani-pedi-facial or cool new headphones. In fact, in a survey by Ameriprise Financial, 59 percent of couples said they don’t tell their significant other about something they don’t consider to be a large purchase. Many Americans spend money without telling their partners—though most agreed that anything over $400 needs to be discussed.
The money talk
It’s normal to have differences in opinion on how to spend and save. But it’s healthy to get—and stay—on a similar financial page as your partner, Moorhouse recommends a monthly spending meeting to evaluate the state of your finances.
“Monthly family finance meetings aren’t as scary or dreadful as they seem. You can even start to look forward to them! What are your financial goals? Have you met any? Do they make sense? Can we remove one and replace it with new life goals like wedding planning or home purchases?” she explains.
“Build a budget and compare results over the month: Did you meet, exceed or miss your financial targets? Have you paid down some debt, have you grown your net worth?”
Discuss what finances you will combine and what you’ll keep separate, as well as any other guidelines—such as, how much can you spend without consulting your partner? What items do you both deem necessities or no-brainers, and what do you consider a splurge?
Work with your partner to develop a sound spending plan; aim for a 50-30-20 ratio of living expenses (50 percent), savings (30 percent) and “wants” (20 percent), which allows you to scratch any impulsive itches while keeping focus on the future. No more need to hide those shopping bags.
Disclosure: HSBC commissioned this article. The views and opinions expressed do not necessarily reflect the views and opinions of HSBC.