Unfortunately, people often hand off financial management to their Massachusetts partner when they do not feel confident managing money according to a 2018 survey for the National Endowment for Financial Education which found that 41 percent of Americans who combine finances with their partner said they'd deceived that person or loved ones about finances.
So-called "financial infidelity" - things like holding secret accounts and taking out credit cards without a partner's knowledge - is shockingly common
They may not be doing anything illegal. But they could be doing things like racking up credit card debt or running behind on mortgage payments.
5 Tips to Protect Yourself
How can you protect yourself from financial deceit in your relationship? Experts offer the following five tips:
1. Don't let go of the financial reins. It's not uncommon for couples (married or not) to combine assets, buy property together or open joint accounts. When this happens, however, couples often decide to have one partner be the primary financial person.
One partner might defer to the other due to a lack of confidence in financial literacy or a feeling that the primary breadwinner should take control of financial decisions. Emotional and control issues between the couple can also influence who's heading up their money matters.
Having one partner be in charge of finances isn't a problem. What can cause issues is when the other one doesn't pay attention to what's going on with their money.
Regardless of the amount of money each person contributes, both parties need to be involved in planning, spending and overall financial decision-making.
2. Learn money basics. If one partner is more skilled in this area, it's even more important for the other to gain understanding of the basics of investing, debt and financial planning.
Both parties need to have a basic understanding of the savings, debts and investment portfolio.
There really are no silly questions when it comes to personal finance. If your partner is more knowledgeable than you are, ask to be brought up to speed. It's part of being a team.
3. Don't be shy. A partner may worry that by asking too many questions or raising concerns, it will look like he or she is questioning the partner's judgment or not trusting the person.
Trust isn't automatic; it's earned and built between a couple, says marriage counselors. To build trust, you not only have to open up about your feelings and expectations, but you have to respect the feelings and expectations of the other person.
Insist on getting access to all joint accounts and passwords for all of your partner's accounts. Financial transparency between partners is imperative.
4. Take the time to read and understand financial documents before signing them. Otherwise, your signature may make you financially or legally liable, even if you had no clue what you were signing.
If you don't understand a document and aren't comfortable asking your partner, there are reliable independent sources such as an accountant, financial adviser or lawyer who can review it.
5. Consider having a weekly financial check-in with your partner. You might also want to schedule a yearly, thorough financial wellness check-up with a financial professional.
During your updates, address and update as needed your savings goals, investment strategies, wills and debt management.
Going through your finances yearly with your significant other and a third party may prevent financial issues stemming from naivety, negligence or malicious intent.
Red Flag Warnings
There are a few warning signs of financial infidelity.
For instance, a drastic change in financial behavior is cause for further investigation. A noticeable increase in spending is definitely something to question a partner about.
Also, keep an eye out for a change in demeanor or attitude, especially toward money. Not being open about feelings or expectations surrounding finances, not respecting the partner's view of finances and not sticking to a plan made together are big red flags.
If a partner is suddenly unwilling to share account information, changes account passwords without notification or won't answer your financial questions, there may be cause for concern, too.
All said, the best way to avoid financial deceit in a relationship is to have honest communications with your partner. Your choice of partner is one of the biggest financial decisions you can make.
Should you be in the midst of a divorce or contemplating divorce, contact the Law Offices of Renee Lazar at 978-844-4095 to schedule a FREE one hour no obligation consultation.