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Keep your finances secret - or keep your love alive

09 February 2011

It begins with the odd hidden receipt - then before you know it there are secret credit cards, furtive sessions on online shopping sites and bills being shredded.

Is financial infidelity here to stay? A Post Office survey in September 2010 found that one in six Britons have a secret bank account, with an average of £2000 of savings that they haven’t told their partner about.

Almost 20 per cent said they were squirreling money away in case their relationship didn’t last the course, and 10 per cent said they kept some secret cash so their other half couldn’t spend it themselves.

It’s not uniquely a male or female thing either –it could be pretending that £300 dress cost £70 in the sale when it didn’t, or it could be triumphantly holding Cup Final tickets that you insist you got at face value. It might be someone omitting to tell their other half about that extra bit of income, or it’s choosing not to share the news that they lost all their bets on Saturday afternoon.

Why does it happen?

There are sociological factors that can explain why this is so. Couples are marrying later in life, and will have had separate bank accounts for years. Their financial independence is prized, and is not something they will give up to suddenly become accountable to another individual, even the love of their life.

Far more women work than ever before, and the days of the male being the breadwinner in control of the family banking is long gone. Women refuse to be answerable to their husbands for their spending habits, and keeping a separate bank account also represents a level of security that suggests they’ll be able to cope if something ‘went wrong’ in the relationship. There was even a book, “How To Hide Money From Your Husband”, published in the US in 2002, on this subject.

However, what may seem like a good idea could soon rebound on you. When you apply for a mortgage, a loan or a credit card deal, you need to be on top of your finances – and keeping money secrets from your partner could lead to trouble.

This is because if your finances are linked, even by only having a joint mortgage and nothing else, lenders may take into account your partner’s credit information when you apply for credit (and vice versa). Therefore, any debts run up by your partner could impact on your own credit rating – and a bad credit rating can take years to repair. Your credit report shows you the names of anyone you are financially associated with, as well as any credit searches carried out on you, in relation to applications they have made.

The best thing to do is to get to know your credit report. This is the history of your credit accounts, such as cards, loans and your mortgage, and your repayment record. Lenders see it when they decide whether to make you an offer. It’s free to see your Experian credit report and unlimited access to your Credit Score with a 30-day trial of CreditExpert2- you can monitor your credit report online and find out what lenders can see about you.

Some tips to avoid trouble:

• It’s good to draw a clear line between what is shared and what is separate, and stick to it. Joint mortgages and savings are perfectly normal – you share a home, and share a future – but by all means keep your own bank account for your income. Many people tend to think “I earn my money, they earns theirs.”
• It’s good to be open with your partner - if you never discuss money with your partner, then it can only lead to trouble, so try to be clear about things before they have a chance to get out of hand.
• Some people swear by a ‘don’t ask, don’t tell’ policy – once essential bills have been paid, both parties can just get on with spending what’s left with no questions asked.

Doug Strachan, director of financial services at the Post Office, said: “While people have secret savings accounts for many different reasons, it’s wise to be open and honest about money with loved ones to avoid strained relationships”.

“By discussing significant financial decisions with close family and friends, people are more likely to make well-informed choices and prevent potential money issues spiralling out of control”.

So as you hand over your Valentine’s card to your nearest and dearest, maybe have a think about how you can strike a balance between spending and saving – and try not to keep too many financial secrets.

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