Many people aren’t comfortable disclosing information about money, like their net worth, salaries, or not being prepared for a home purchase. In fact, a recent article reveals 32% of Americans in relationships keep financial secrets.
Being silent about harmless details is okay, but some hold dire consequences. For instance, keeping a massive investment loss to yourself can impact your family’s financial and emotional well-being, especially during hospitalization or having a child.
Read on to discover common financial secrets, their risks, and how to handle difficult conversations about money.
Types of Financial Secrets
Honest communication should be part of any relationship — especially money concerns. However, some people prefer hiding financial secrets. The most common ones include hiding debt, hiding assets, and lying about protective measures.
Having debt can be embarrassing for some individuals because it can feel like a failure. However, some details are just not worth keeping to yourself. For example, these instances might negatively impact your relationships in the long run:
Hiding credit card debt from your spouse or partner
Not disclosing massive student loan debt
Keeping personal loans secret
A whopping 40% of Americans admit to committing financial infidelity against their partner. You might think the biggest secrets people keep is something harmful like gambling problems or borrowing money from loan sharks, but they’re not. Hiding assets is the most common financial lie individuals tell, especially secret bank accounts. However, no matter your intentions, telling your partner about your cash, jewelry, and collectibles is ideal.
Lying About Protective Measures
Sometimes, people lie about protective measures, like estate planning, insurance policies, and health coverage. Giving your partner false hope by overstating the value of these contracts is never a good idea. Transparency may seem challenging, but it will protect your loved ones in the future.
Hiding Money Problems Puts Others at Risk
In most cases, partners have different experiences growing up about money secrecy. For this reason, it might be tempting to avoid talking about money altogether. However, money problems can cause friction among couples, so it’s best to be honest about your financial situation. Discussing your financial future, money goals, and combined finances should not be taboo in your relationship.
Financial Secrets Can Negatively Impact Relationships
Can you imagine lying to your partner about massive business and personal debt and then getting sick? Apart from the physical, emotional, mental, and spiritual toll on your spouse, it might also leave you both broke. And that might not be the worst-case scenario.
For some people, such secrets can become deal-breakers. Lying to your partner might be enough reason to leave you. Also, imagine if you pass away and leave all the debt to your partner. They might lose everything you’ve worked hard for together.
Why Being Transparent Pays Off
Financial transparency should begin before marriage, and it’s a continuous process. Once you tie the knot, you should lay out all the cards on the table because your financial habits affect your family. Being open about your financial wins and losses will help your relationship last.
Honesty regarding money matters has many benefits, but the most rewarding ones include building trust and feeling liberated.
Disclosing Secrets Builds Trust
As an individual, you have distinct money beliefs and values that you apply to your finances. However, when you get married, you stop being the sole financial decision-maker in your life. You and your spouse might have different preferences, and these varying views can become a barrier to feeling like one unit.
When you start talking about your secrets, you inspire trust from your partner. They might even talk about their financial burdens with you.
Revealing Financial Secrets Can Be Liberating
Revealing long-held secrets — no matter how detrimental — can be liberating.
Imagine telling your partner about a massive student loan debt. Most likely, your spouse will understand your predicament, become your confidante, and help you overcome your problems. Being transparent might help you realize that it was unnecessary to stress about your money problems on your own for so long.
Talking Money: How To Have Difficult Conversations
The best time to start talking about money is now. The first step is to start talking about money regularly.
No, it doesn’t mean checking each other’s credit card statements for spending lapses. However, it’s okay to discuss things like how much each of you will share monthly for your joint account. The more you normalize talking about healthy financial habits, the less awkward it becomes.
Importance of Estate Planning
Another critical topic to discuss is the importance of estate planning. It is the process of preparing to manage a person’s assets upon death or incapacitation. So, when you pass away or cannot gain income anymore, estate planning dictates how you want to distribute your wealth, including cash, houses, cars, and jewelry.
However, apart from asset distribution, it lets you appoint guardians for your children. Without a clear stipulation, the state will have to rely on an executor’s decisions — which might not mirror your own.
Start Talking About the Future
Living your best life involves having honest conversations with your loved ones — even about difficult topics. If you truly care about your partner and family, it’s best to start talking about the future.
Aside from disclosing information about your bank accounts, investments, and debts, it’s just as essential to talk about an estate plan. Doing so can improve the transparency, preparedness, and peace of mind in your relationship.
At Trust & Will, estate planning is simple, affordable, and inclusive. Just as you have control over your finances, you can also create a plan that fits your needs, life, and legacy.
Build a lawyer-approved customized estate plan now to control your assets and protect your loved ones.
You can create a fully customizable, state-specific Estate Plan from the comfort of your own home in just 20 minutes. Take our free quiz to see where you should get started, or compare our different estate planning options today!
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