Nearly four in 10 Canadians have lied to a romantic partner about money, according to a recent Leger survey commissioned by Credit Canada and the Financial Planning Standards Council ahead of St. Valentine’s Day.
The share of those who admit to bending the truth about their finances while in a relationship is 36 per cent, according to the poll, which surveyed 1,550 Canadians at the beginning of January. And an identical percentage say the have been the victims of “financial infidelity.”
The offenses, according to the poll, are varied. Thirteen per cent say their current partner or an ex cheaped out on their contributions to shared expenses, putting in less than they should have based on their income. Lying about one’s income accounts for 8 per cent of cheating, according to the victims. Another 7 per cent said they were lied to about major expenses, such as a car, a luxury item or even a home. Seven per cent said a current or past significant other kept a “secret stash of cash” from them. Six per cent said the other person took off with all their money. And 4 per cent said they were caught by surprise when a current or former partner went bankrupt.
But, perhaps unsurprisingly in this debt-hungry country, the most common form of financial cheating was the stealth accumulation of credit card bills. Some 14 per cent of respondents said a present or past sweetheart racked up a balance unbeknownst to them.
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Men and women are equally likely to be the victims or the perpetrators of financial infidelity, the survey found. “Household income levels do not play a role either,” reads the study.
Age, on the other hand, does. Millennials are more likely (47 per cent) to say they have been on the receiving end of financial unfaithfulness. That share stands at 41 per cent among 35- to 54-year-olds, and drops significantly for older Canadians.
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The reason why nearly half of 18- to 34-year-olds describe themselves as victims of money-based cheating may have something to do with social media and attitude, according to Elena Jara, director of education at Credit Canada Debt Solutions. Facebook and Instagram make it easier to find out whether someone has been lying about financial matters, she said. And today’s youth appear to have a very low tolerance of that kind of duplicity. If they find out you’ve been untruthful, “they have no problem calling you on it,” Jara said.
But how can Canadians protect themselves from heartbreak and, potentially, bankruptcy when they get romantically involved?
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Get financially naked with each other before things get serious
No matter your attitude about sex before marriage, the advice from financial experts when it comes to money matters is get naked before you commit. You need to get a good look at each other before you take the leap into things like drawing up a long-term financial plan and co-signing bank accounts and loans, Jara said.
If you’re thinking about moving in together, it’s time to lay bare each other’s finances. Here are the things you should ask to know about and be prepared to show, according to Jara:
- Credit score
- All bank accounts and savings
- All credit cards and their balances
- All investments
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Checking each other’s credit scores isn’t enough, said Wes Cowan, a licensed insolvency trustee and senior vice president at MNP, one of Canada’s largest debt consultancies. That’s because people can keep up solid credit score by simply making timely minimum payments on credit card or other debt. Cowan said he’s had a few clients who held up great credit scores up until the moment they had to declare bankruptcy.
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The second order of business when you’re thinking of tying your financial future to someone else’s is making sure you share the same, or at least compatible, financial goals, said Jara. Are you a penny-pincher about to get hitched to a big spender? Is your significant other fixated on home ownership whereas you’d rather be a renter for life? And what do the both of you envision for retirement? As utterly unromantic as these things may sound, they matter.
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Once you have decided to take the leap together, “total transparency” is the way to go, according to Jara. Sharing bank accounts makes sense, she said. And so does adding each other as co-signatories on every credit card, which allows you to build your credit score individually, but be up to date on all household transactions, she told Global News.
On the other hand, it’s important that couples leave each other some financial autonomy, said Jara. Make sure both of you have some “me money” for personal expenses.
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When you’ve tied the knot or entered into a common-law relationship, your financial behaviour will likely have significant spill-overs onto your partner. Debts racked by in one person’s name alone do not become the spouse or common-law partner’s debt, too, said Cowan. But creditors can come after half of the couple’s shared assets to recoup unpaid balances, he added.
That’s why, when it comes to financial commitment, “slow is the way to go at the beginning,” Cowan said.