Experts have long held that money can be one of the leading causes of divorce and stress in relationships. Now, a new poll by BDO shows that Canadians have a lot of financial secrets and habits that their partners would like to change.
The poll found that the majority of Canadians in a relationship, whether living separately, common law or married, would like to change at least one of their partner’s financial habits even though only 36 per cent report they rarely or never discuss personal finances with them.
If Canadians could change one of their partner’s financial habits, 43 per cent would change overspending or lack of a budget followed by not saving enough for long-term goals like retirement and emergencies, not keeping track of spending, lack of knowledge about personal finance, not investing enough, and using credit cards to extend their income.
The poll found that only five per cent of Canadians discuss finance with their partners daily, 14 per cent a few times a week, 19 per cent weekly, 25 per cent monthly, 30 per cent rarely and six per cent never.
Personal spending habits are the biggest secret that Canadians hide from their partners, followed by credit card debt, income, monthly expenses or bills, investments or assets, retirement savings, debt from previous a previous relationship or relationships and student loan debt.
The poll found that people who feel they have a lot of debt are more likely to hide financial secrets from their partner. Fifty three per cent of these individuals say their significant other knows everything about their finances while the rest have hidden or are hiding something.
Another recent poll from Credit Canada and the Financial Planning Standards Council painted a similarly negative picture of love and money, finding that more than one third of Canadians have been a victim of financial infidelity from a former or current partner. Thirty-four per cent of those in a relationship keep financial secrets from their current romantic partner and 36 per cent of those in a relationship have lied about a financial matter to a partner.
Doug Jones, president of BDO Canada Limited, says it’s important for couples to be on the same page when it comes to their finances.
“Hiding spending habits or debt from your significant other can cause serious financial issues that may require more formal debt relief solutions,” he says. “It’s really important for couples/partners to work together to keep harmony in the relationship. If you really want to destroy your budget and finances get divorced and start paying the lawyers.”
There is a bit of good news when it comes to finances and relationships. The BDO study found that most Canadians have talked about debt with their partner at some point, with 62 per cent having a talk about debt before they were married and 31 per cent having the discussion within the first six months of their relationship. Millennials were the most likely group to discuss debt earlier in the relationship, with 50 per cent doing so in the first six months.
Jones suggests couples get together and” put everything on the table” – assets, income, debt, spending preferences, goals and complaints.
Having individual bank accounts is not recommended. It allows the couples to operate in isolation, so they are not working together.
And when it comes to debt, create common financial goals. “Take a look at all of your outstanding debts and figure out how much you owe and what the interest rates are on all of them,” Jones suggests. “Then establish a debt repayment strategy that you can both follow. Creating a budget together if you don’t already have one can be a great place to start.”
Talbot Boggs is a Toronto-based business communications professional who has worked with national news organizations, magazines and corporations in the finance, retail, manufacturing and other industrial sectors.