How to prevent financial secrets in a relationship

how to prevent financial secrets in a relationship(1)



Unfortunately if you are married debt is a family affair and if there are any financial secrets hiding in your closet you still may be on the hook for them.

“My spouse secretly racked up credit card debt.” How many times have we heard that scenario, over and over again?

A guy I know went through this relationship changing scenario with his now ex-wife. He got married shortly after University to the woman of his dreams.

She was a happy, smart woman whom he had lots of fun with and they connected well, they were in love. On the outside it seemed like she had her stuff together. I met her a few times and she was always pleasant.

Over the years they bought a house and worked their way up the corporate ladder. It was in 2012 when his wife lost her job due to downsizing that everything went downhill for them, and fast. She struggled to find a new job in her field of work that year but as far as he knew she was still looking for work.

They had less and less money to keep their huge house running so they had to sell it and rent which upset his wife. After all of those years earning an excellent income they should have had something to show for it other than a house, but that wasn’t the case.

I often thought they were well-off but now we all know that wasn’t the case either.

She argued with him saying that he should have taken better care of their finances so that should never of happened. This is WHY it’s so important to establish responsibilities with finance when you get married. It was clear she was blaming him for all the financial mistakes that had happened in the relationship.

  • Were they even tracking their finances or budgeting? 

I asked him this question when I was helping him pack and he told me that he didn’t have time so he left it all to chance. He paid the bills as they came in and that was that.

Not so smart but he’s not alone in the money battle because many families are in the same boat. Some don’t even have time to take care of themselves with demanding jobs or kids ruling the time that they do have at home.

His wife was very embarrassed about selling the house and didn’t know what to tell her snooty friends (his words not mine although I toned it down a bit for the blog.) His thoughts were, “Who cares what they think.”

Clearly it’s no one’s business why you do what you do in a relationship but when people came asking she made up stories just to get them off her back. She didn’t want them to think we were having relationship problems or that we were house poor, he said.


The secret was out of the bag


I’m pretty sure I pushed some financial buttons in our earlier conversation because the next day he was sorting out piles of bills and bank statement after bank statement at his desk while I was moving boxes.

He called me over to have a look at something he found in a black folder buried at the bottom of the office closet. I had a quick glance at it as I realized it had to do with their finances, then looked up at him and said, “You owe a nice chunk of money to these credit card companies.”

After some phone calls he found out that his wife had 2 credit cards maxed to the tune of $25,000 that he had no idea about. How could she keep secrets from me, he said out loud. My eyes were likely popping out at the sockets I’m sure as I didn’t know what to say.

I really wanted to say, “If you were managing your money you may have seen irregular data in your budget and annual reports, but I didn’t. Sometimes shutting your mouth is the best thing to do.

Finances should be treated like a business and a thorough financial statement analysis has been credited to saving more than one business from going under. A monthly or yearly budget report would do just the same.

It does help though to see any areas that need improving as the year progresses rather than at the end. Although they did get bank statements he said all their banking was now done online as far as he knew.

He was already in shock so I didn’t want to cause him any stress with my babbling mouth. He works hard and felt deceived by his wife not telling him about this debt let alone opening credit cards in his name.

He had no plans dealing with identity theft because it’s just not something he would do to his wife. How many of you get those pre-approved credit card applications in the mail? We do all the time and I shred them.

It’s easy to fill them out and soon enough you have a credit card in your hands as long as you know the important data. To make it even easier to spend money on the card all you have to do is tap a credit card and your purchase is approved.

Even worse, online shopping has taken the world by storm. An active credit card is all you need.

Sad, but true.

Red Flag:

I used to see her bringing new clothes and other items in the house but it never really resonated with me that she was creating secret debt.

The two of them needed to have a money conversation about the debt and fast because he was being blamed by her for not taking care of the finances properly. Now he knows why money wasn’t stretching far enough.

She was using money in their bank account to pay the minimum balance over the course of a year or two then spending it again. It was a never-ending debt cycle.

Had the debt gone to a collection agency he may have gotten tipped off by a phone call but there are pros and cons to that as well.

At this point he said he wondered if his wife had a shopping addiction and was filling the void of being laid off from her job.

I wondered why she wouldn’t get online billing of the credit card statements rather than leaving a paper trail for her husband to find but he said that she hardly used the computer.

She must have paid the bill at the bank in person or over the phone. Not that I condoned her actions, I was just curious.

She had her own vehicle so she had the freedom to come and go when she wanted. I guess she was out more than he thought she was home.


Talking to his wife about the financial secrets


He loved his wife and would have done anything to make it right but he was very unhappy with this secret debt she created. She should have turned to me, he said. He’s right, she should have talked to her husband but it’s not always that easy for some people.

It turns out that she admitted to the credit card debt and that she wanted to end the marriage because she was tired of keeping secrets from him. She didn’t want to be in a marriage where money was always a struggle and she would rather be on her own then living an unhappy life.

Fair enough. I’m not sure if she forgot that she didn’t have a job but that was her call not his.

She also thought that since the credit cards were in his name that he would be responsible for the payments…nope! He paid for them in full from the money that was to be split in the divorce.

She told him that he spent more time at work than with her and that over the years even though they earned decent money he had forgotten about loving her the way he did when they first met.

He says marriage is a two-way street and I agree. Work was important to him as he was trying to set up his career and networking took up lots of his time as did business meetings.

Ironically he’s engaged to a woman who works in the financial industry so you can bet they will be working together on their finances.

He’s a changed man now and has learned quite a bit about marriage and debt from his first wife that he knows he won’t be making the same mistakes again.

No more financial secrets.

How can you prevent this from happening?

  1. Budget and review your finances monthly and yearly
  2. Keep the lines of communication open when it comes to money My friends over at 2 Copper Coins wrote a recent post that explains Why You Should Keep Talking To Your Spouse About Money because “Money can destroy a marriage“.
  3. Work on finances together-It’s a two-way street
  4. If you see lots of new stuff, question it
  5. Order your free credit report yearly so you can check what’s on it

Finding out your partner has kept secrets that could have ballooned out of control had it not been caught can be tough to swallow. It’s one thing if your spouse spends too much money but it’s another when you find out they are creating debt and hiding it.

Protecting yourself even after you are married is very important because you just don’t know what can happen financially, especially if you think it could never happen to you.

What other preventive measures can you think of?

Please note: I’ve left out any names to protect his privacy.

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  1. Thanks for the mention! It seems it’s all about consistency of communication. To have one good conversation about money a year or every couple years is not enough – it needs to happen frequently. You may not need weekly check ins but a lot can change in 3-4 months and it’s important for both people to know what’s going on.

  2. Well, it’s never too late to start a new life. Having a secret debt can really create a stain in the marriage, you should be open with each other especially when it comes to financial matter.

  3. I’m glad he was able to learn from his past mistakes and will be happy once again. In our household, I prepare the budget while my husband pays the bills. That way we are both aware of how much it costs to run our household. We have a meeting every couple of months to discuss our financial situation. I went to school for accounting so budgeting comes easy to me, not so much for my husband. We have to constantly work at it.

  4. Mr. CBB,

    The best thing that worked for us was running our finances like a business. It seems to be a common theme online these days but for us it just clicked. I spend some time putting the spreadsheets together then for a couple hours at the end of each month we review where we are at. This way it brings transparency to our finances as we go over everything together.

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