You Trust Your Partner With Your Love—What About Your Money?

Dear Readers,

I recently heard an interesting story about a man who expressed his love for his wife in an unusual way. It wasn't with an extravagant gift or a surprise trip to a tropical island. No, he wrote her a book—a book about their financial life. 

While that might not be what you'd choose to give or receive as a Valentine's Day gift, to me it made sense. And not because I'm unromantic. Quite the contrary. I think it was a wonderful gift for the very reason that sharing the details of your financial life is actually very intimate, revealing and requires absolute trust.

In this case, the husband was worried because his wife wasn't at all interested in being involved in their finances. What would she do if something happened to him? Who could she turn to? To me, his book was actually a very practical love letter. 

This fellow's solution may be quite out of the ordinary, but partners not sharing their financial lives is unfortunately common for a variety of reasons—some harmless, others downright dangerous. Here are just a few potential problems that I think every couple should be aware of, plus some practical, mostly loving solutions.

Why couples don't talk about money

• Lack of interest—Like the wife of the fellow above, some people just don't care to be involved in the family finances. You might view this as an expression of total trust in the other partner's ability to be on top of things. I can understand that. But as a financial planner, I don't accept it. That's because, no matter how capable one partner may be, there's no guarantee that they'll always be around. I'm not suggesting a breakup necessarily, but life—and death—can get in the way.

• Financial habit—For some couples, it's not so much a lack of interest, but rather a matter of habit. This is especially true for women. You might think that women who leave money management up to their spouses is a 1950s stereotype, but according to a recent report from UBS Global Wealth Management, more than half of women today still defer to their male partners when it comes to money. And, surprisingly, the stats are even greater for younger women: 56 percent for those age 20-34 versus 54 percent for women over 51. It may be a habit that we've unconsciously passed from generation to generation, but it's one that needs to be broken.

• False assumptions—As a financial planner, I often hear people say they just assumed their spouse was doing something, whether it's paying off debt, saving for retirement or maintaining life insurance. It's only in a time of crisis that they find out they were mistaken. Another common assumption is that their spouse will outlive them. None of these things should be taken for granted
• Financial infidelity—When one partner is hiding money details from the other—things like significant credit card balances, major purchases, large debts or even secret savings accounts—there can be a serious issue. I’m a big advocate for every relationship to include some financial autonomy (a 'yours, mine, and ours' system of checking accounts and credit cards), so what I’m talking about here is different. According to a 2018 Harris Poll conducted for the National Endowment for Financial Education, 41 percent of American adults admit to financially deceiving their partners. The reasons range from protecting privacy to embarrassment to fear of disapproval. Hiding major purchases can derail the trust between you and your partner. Open communication is key to any successful partnership.
• Abusive control—As I wrote in a recent column on financial literacy and social justice, financial abuse is a prevalent part of domestic abuse and comes in many forms ranging from forbidding someone to work, to controlling all of the money, to running up large debts on joint accounts, to outright theft. This isn't just a serious breach of trust, it's a potentially dangerous situation for the victim both financially and emotionally.

Why every couple should start the conversation now

So what's the solution? Essentially, as simple as it sounds, it comes down to open and honest communication. You can't coerce a disinterested partner into taking action but you can share information. You can counter assumptions and break financial habits by asking questions, talking about common goals and mutually deciding to share some financial responsibilities.

If you've been financially deceptive, it won't be easy, but once you've put all the details on the table, you can go deeper into the "whys" behind your actions. Financial abuse is a much more serious problem that may take some outside help. But if you're a victim, it's important that you make someone else aware of your situation.

Every couple’s financial relationship is different, and while you and your partner don't have to be equally involved in your finances, you do need to be equally aware and respectful of each other’s needs and perspective. You don't have to write a book, but you could do something as simple as taking time quarterly to catch up on your financial picture, what might have changed and where all the important documents are. Whether or not each of you is actively involved in financial decision-making, you should both know the big picture—things like net worth, cash flow, debt, insurance, investment accounts, retirement savings and estate planning.

And if one of you has more knowledge than the other, share it. Financial literacy may not be sexy, but it can actually make for a better relationship. To me, staying in sync about your money is a crucial part of keeping your romance alive. 

Happy Valentine's Day!

Have a personal finance question? Email us at askcarrie@schwab.com. Carrie cannot respond to questions directly, but your topic may be considered for a future article. For Schwab account questions and general inquiries, contact Schwab.