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Some spouses hide impulse purchases from each other.Aleksandr Elesin;Elesin Aleksandr/iStockPhoto / Getty Images

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Here’s the good news: most spouses say they aren’t keeping financial secrets from each other. Now, for the bad news: in an online survey The Harris Poll conducted in 2023 on behalf of NerdWallet Inc., 14 per cent of Generation Z (ages 18 to 26), 5 per cent of Generation X, and 3 per cent of baby boomers in Canada admit they’ve hidden a purchase from their significant other.

NerdWallet spokesperson Clay Jarvis doesn’t think the generational differences mean Gen Zs are inherently more dishonest. Rather, he posits they’re under more pressure from social media and reality television to add elements of luxury and extravagance to their lives. But, whatever the reason, secret spending has consequences.

“If major purchases are being made without one partner’s knowledge, that can limit a couple’s ability to save for things such as retirement, a child’s education, or a vacation severely,” he says. “It’s also just unhealthy for a relationship, in general. If someone finds out you’ve lied about your finances, they’re going to start wondering what else you might be dishonest about – and if they no longer trust you or your judgment, it’s going to make financial planning that much harder.”

Mr. Jarvis adds that people typically hide the things they can’t control, and that may include lifestyle and impulse spending. The financial planning work an advisor does with clients has the potential to provide more of a sense of control and reduce feelings of shame that can lead to secret spending, he says.

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Tanya Wilson, senior wealth advisor and portfolio manager with Gold Seal Financial Group at Wellington-Altus Private Wealth Inc. in Kelowna and Surrey, B.C., says it’s an advisor’s job to identify financial weaknesses in clients’ situations and, when necessary, to initiate and facilitate difficult conversations. That includes addressing secret spending that threatens a couple’s ability to meet long-term financial goals.

“The most important part of all of this is for everyone in the family to have a voice and to be heard,” she says. “When an individual is not acting honestly, it’s probably because there’s been a lack of communication around finances early in the relationship and there hasn’t been any type of check-in along the way about shared financial goals.”

A written financial plan, incorporating both partners’ objectives and updated regularly, is one way Ms. Wilson wards off secret spending. “Plus, I’m there as a go-between to foster mutual respect rather than there being this environment of negative emotions or accusations if there’s any type of financial infidelity at play.”

Ms. Wilson sees a financial plan as more than defining goals and implementing saving and investment strategies. It’s also about promoting behavioural change, which comes from motivating people by getting them to engage in and be excited by the process.

Varying financial incomes and expenses

Sometimes, especially with couples with very different incomes, she introduces the concept of “living financially separately.” Both partners contribute to current expenses, future goals and a family joint pot in an agreed-upon proportion. Whatever is left stays in each partner’s respective bank account to spend as they wish.

“I’ve seen this strategy save marriages,” Ms. Wilson says.

Another approach she uses is to create an “allowance” for couples. When there is excess cash flow, a set amount is allocated to each partner to spend on whatever they want – “on frivolous things, on things that they might normally hide from their spouse because they don’t want to ask for permission or they don’t want to get into an argument.”

With no need to rationalize or justify that spending, there’s no need to be secretive.

If there’s a spouse in the picture, Susan O’Brien, wealth advisor with the Susan O’Brien Wealth Advisory Group at Richardson Wealth Ltd. in Calgary, won’t take on a client relationship unless it includes both partners. She schedules quarterly meetings for at least the first few years to encourage the night-before conversations couples often have about their finances in advance of those meetings. She also sets a tone of transparency and openness.

“If one of them e-mails me a question, I respond to both of them, so we can’t have any secrets,” she says. “We have to have a trusting relationship. And if that’s not what they want, then we’re not the right team for them.”

Occasionally, Ms. O’Brien will discover that one partner (often a woman) is hiding a bank account or that the other (often a man) hasn’t owned up to a bad investment. In those cases, she tries to find out why. Is the secret bank account the result of a sense of financial insecurity? Was the poor investment return hidden because of embarrassment? When partners learn the reason, they can often accept and move on.

In general, she finds that working with clients on a spending plan leads couples to open up about secret spending and find a joint path forward.

“When we go through spending plans with couples, there’s [sometimes] a huge amount unaccounted for. Nobody can figure out where that money went. We try to get them to spend in line with their values, in line with their goals, [and] we try to get to the psychology of money [to work out] what’s holding you back from being transparent with each other?” Ms. O’Brien says.

“Secrets are secrets because there’s some guilt or shame or lack of trust,” she adds. “People think, ‘I spent too much. I’m a bad person.’ It’s not that you’re a bad person, [but] they do need to be more intentional about it.”

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