Just in time for Valentine’s Day, TD Bank revealed how couples in serious relationships spend – and hide – their money in its seventh annual report Love and Money Survey.
Nearly a third of Americans (32%) are hiding a financial secret from their romantic partner, an 11% increase from last year. The most common financial secrets are a big purchase (40%), large credit card debt (18%) and a hidden bank account (13%).
It should be noted that half (50%) of partners in an unhappy relationship experience financial infidelity, compared to a third (32%) of those in a happy relationship, according to the survey. TD Bank spokeswoman Alissa Van Volkom said “when debt, financial secrets or unemployment enter a relationship, both partners need to stand firm on what matters to them.”
“The pandemic has shown that you can’t put a price on a lot of things – financial health, stability and happiness included,” Van Volkom added.
Keep reading to learn more about managing money with your partner, including how to be more transparent with your financial behavior. You can visit Credible to compare rates on a variety of financial products, so you and your partner can achieve your financial goals together.
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How couples can become more transparent about money management
Keeping secrets in a relationship can sow guilt and embarrassment – and financial infidelity is no exception. Being more honest with your spouse about your shared finances can help build trust with clear financial goals.
“Couples should regularly discuss three things: how they’re managing their budget, unexpected or upcoming expenses, and rising debt,” Van Volkom says.
Read more in the sections below for tips on how to have open conversations with your partner about financial transparency.
Discuss your budget
Although creating a shared budget might not seem like the most romantic date idea, it can help you and your partner see how you manage your income and expenses. Tracking your spending can help you identify areas where you might be overspending and find opportunities to increase your savings.
An easy way to streamline your budget is to download a finance app that automates the process. Budgeting apps can be linked to your bank accounts to give you a clear picture of your financial situation. More than half (57%) of Americans have financial apps on their smartphones, according to the TD Bank survey.
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Plan for unexpected expenses
Among Americans who hide a financial secret from their partner, the most common is that they hide a large purchase (40%). For couples with shared finances, making a major purchase without your partner knowing about it can make budgeting and tracking expenses difficult.
One way to plan for unexpected expenses is to create an emergency fund that covers about three to six months of expenses. You can start your emergency fund by setting up a direct deposit of your paycheck into a high-yield savings account. You can compare savings account rates on Credible for free without affecting your credit score.
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Make a plan to pay off your debts
Nearly a fifth (18%) of survey respondents with financial indiscretion are hiding secret credit card debt. This is problematic because revolving credit card debt that is carried over for a month comes with high interest rates, making it difficult to pay off.
When discussing a debt management plan with your partner, consider the following strategies for paying off credit card balances:
- Snowball method or debt avalanche. The debt snowball method is to pay off the credit cards with the lowest balances first, while the debt avalanche strategy is to pay off the debt with the lowest interest rates first. the highest.
- Credit card balance transfers. Applicants with very good to excellent credit may qualify for a 0% APR introductory period, which effectively allows you to pay off credit card debt without interest. You can compare balance transfer card offers from several credit card companies at once on Credible.
- Debt consolidation loans. It is a type of unsecured personal loan used to pay off high-interest debt in fixed monthly installments at a lower rate. Interest rates on two-year personal loans are currently at historic lows, according to the Federal Reserve.
You can visit Credible to learn more about debt management and compare personal loan interest rates. This way, you and your partner can make an informed decision on how to pay off credit card debt.
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