Hiding purchases from your partner has a financial risk

I SUSPECT many of us make occasional purchases we don't mention to our spouse or partner. It's usually harmless stuff but habitual secret spending can leave a gaping hole in our finances.

According to research by comparison site Finder, around one in five Australians keep guilty purchases secret from their other half.

The most common secret indulgences include clothing, 'guilt' food and cigarettes. It all sounds pretty low key so far. But here's the rub. The average secret shopper shells out about $2,700 annually on hidden purchases.

I'm no relationship expert but when thousands of dollars of household money go unaccounted for each year, the whole foundation of trust can quickly unravel. If covert spending is getting the better of you, it could be time to open up to your other half.

Aim to devise a system where you are working towards shared goals while still having personal freedom. That may mean using a shared account for regular household bills, with separate accounts for individual spending no questions asked.

The challenge often lies in breaking entrenched spending habits, and that's where working together to follow a household budget can be helpful.

First, determine must-have money for mortgage repayments, rent, utility bills and groceries. These essential costs take top priority in your budget.

Next, talk about individual wants. It can be confronting to have conversations about how spending on personal items like clothing, haircuts, or hobbies is draining the household coffers. But simple lifestyle changes like going for a daily power walk instead of paying gym membership, or imposing a three-beer limit for Friday nights with mates, can let you both satisfy wants without blowing the budget.

Finally, track and reward your progress. Make a regular date, fortnightly or monthly, to talk with your other half about how easy or hard it's been to stay within your spending limits. 

Importantly, reward yourselves for those times when you've managed to stay within your budget. Go out on a dinner date or head out for a bushwalk. Just do something you both enjoy and think back to the early days of your relationship when a good time didn't involve spending on the sly.

For more ideas about making money work in your relationship, check out my book Money, Marriage and Divorce. Or contact organisations like Relationships Australia for free or low cost counselling.

Paul Clitheroe is a founding director of financial planning firm ipac, Chairman of the Australian Government Financial Literacy Board and chief commentator for Money Magazine.

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