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IRISH INDEPENDENT
SINEAD RYAN
25th February 2023
An affair can mark the end of the most robust relationship, but what if, instead of a lover, your partner has been unfaithful with your money?
Financial Infidelity is a growing problem and one which can be just as hard to recover from as a straying spouse.
According to research earlier this month by Forbes, 38pc have lied to a partner about their finances, with the majority doing so about a purchase they didn’t disclose, or a hidden debt or credit card. While 70pc reported that someone saying they have more money than they actually do is worse than someone saying they have less than they do.
Among Irish people, a survey in recent years revealed one in 10 had a secret bank account.
Clinical psychotherapist Stephanie Regan, presenter of the Tough Love podcast, says: “Rather like any infidelity, there is an initial shock and a struggle to believe what has happened, often then followed by anger as the reality of the situation sinks in more clearly – the extent of the debt or the problem – followed by an adjustment, where reality is dealt with and decisions on what is to be done are considered.
“Finding out that your partner or spouse has been doing this without your knowledge or awareness is a huge breach of the trust and bond spoken or otherwise that is implicit to a steady committed relationship. There is usually a phase of 'micro reveals' as the truth emerges piece by piece but it is important to recognise negative patterns that point to bigger issues when they appear,” she adds.
It can be difficult to discuss heavy topics like finances while in the throes of love and Irish people are notoriously shy when it comes to talking about what they earn. We prefer to trust, hope and dream of a future together, but when you’re getting serious, it’s time to get serious about money.
Joint accounts
You might have promised all your worldly goods to each other at the altar, but when it comes to joint accounts, it’s a good idea to remain a little circumspect.
Kieran McAuliffe, director at financial planners Provest says: “Many couples keep joint accounts for paying mortgages, household bills or saving for a family holiday whilst at the same time maintaining personal accounts for their discretionary spending. Each month they will each contribute a certain amount from their personal accounts to this joint account with the rest to spend at their discretion. By doing this, couples avoid the thought of having to ask permission when buying a luxury item for themselves.”
Many couples keep joint accounts for paying mortgages, household bills or saving for a family holiday
Budgeting all household bills into one account contributed to in proportion to what each spouse earns is a great idea, along with joint savings and investments for specific goals like a new car or holiday. Then you get to ‘keep’ the rest for yourself and as long as you both agree, spend it on whatever you like.
“But if one partner has, say, family obligations, such as child support from a prior marriage or relationship, a separate account could help keep those obligations outside of your joint budget. The absence of a personal account may lead to you resenting having to contribute to these expenses that are not your responsibility,” adds Mr McAuliffe.
Money date
Being honest and open about not just your finances, but your financial goals for the future is the bedrock of a relationship, especially when kids come along.
You need to be on the same page for household spending, savings and what money is your own, and shared. If one partner earns significantly more than the other, than what autonomy does the lesser earner have to spend?
Having a regular ‘money date’ just to check in with each other is a great idea. How much is in the various savings and investments? What bills are owing? How will we pay for X or Y?
Protecting yourself
There are steps you can take to ensure you don’t suddenly find yourself at risk of financial loss by your partner.
Only take out joint loans for agreed purposes. In the event of unpaid debts and insolvency measures, debts are individual, says personal insolvency practitioner Mitchell O’Brien.
“Arrangements are ‘personal’ insolvency and not ‘couples’ insolvency. Mr can apply for a debt resolution without Mrs if Mrs is solvent in her own right and able to meet her own financial commitments as and when they fall due, and vice versa.”
Gambling and other forms of addiction are an obvious reason to keep bank accounts separate from your partner, says Mr McAuliffe.
“It might be worth considering asking your bank if they can remove their access to joint accounts. Also, make sure they don’t have access to a large amount of money without your knowledge, through re-mortgaging your home or taking out a loan.”
If your partner has an addiction, it is vital that in the event of your death, provision is made for your children. A will, especially if there are children involved, is a necessity.
Using an independent financial advisor for the big stuff – such as investments and pensions – can be a buffer zone against potential disagreement.