Family money:

Financial infidelity can ruin a relationship and a lifetime’s hard work

My father had a double life. He ran a second family that he kept secret from my mother and his kids for many years. When he finally told my mother the marriage was over, he had obscured his true finances, so it was impossible for her to find out where he hid his money.

Not surprisingly I’d found it hard to trust partners when it comes to money – until I met my husband. I’m not alone. I hear from plenty of women and men, some more financially savvy than my mum, who have been duped.

Often the lies about the finances are uncovered accidentally. One woman

I know found her husband of more than 30 years had been conned into sending thousands of dollars to his secret eastern European “girlfriend”.

Another thought she and her banker husband had paid off their mortgage and were in a solid financial position. Then she found out he had drawn down on the house and they were mortgaged to the hilt. She later discovered he had lost their selfmanaged superannuation fund money, too.

Another discovered her husband had not paid his tax for more than 15 years, even though he told her he had been putting in his tax returns. He faced a huge tax bill and even more in fines.

Of course, it cuts both ways in relationships. Women take advantage of men, too. What they all have in common is that lying about the family finances doesn’t end well. Trust is violated and often relationships fall apart dramatically.

What scares people is that they are financially exposed even though they havperhaps en’t made the bad moves. Suddenly all the hard work towards financial security has been for nothing, says the woman whose husband had more than $1 million in unpaid tax and fines.

Inheriting debt from a partner or a past relationship occurs to about 20% of people, according to a 2020 St.George survey of 1500 Australians about family finances. What’s more, only half of those have talked about it openly to work through it.

It found that a lack of trust in a partner’s money management is quite common, with 24% of Australian couples not trusting their partner when it comes to money. Around 27% say that trusting their partner about managing money depends on the circumstances.

One in 10 people in committed relationships admits they are not open and honest with their partner about debt and their financial situation. Often, they are embarrassed and ashamed about it.

“Being open is particularly important for couples because ultimately, at some point in their lives, their true financial situation is likely to be revealed,” says St.George’s general manager Ross Miller. “Whether it’s problems with credit history when they apply for a home loan, combining household income for a family tax return, or in the unfortunate incidence of getting a divorce, a person’s financial situation can rarely stay secret in a relationship forever.”

A mistake that people make is not being involved in the family finances. If my mum had been looking at the bank and credit card statements, she would have seen that there were some weird anomalies and uncovered my father’s second family before he hid his money. But he controlled the purse strings.

While it is fairly typical for one partner in a relationship to take financial control, by paying bills, managing cash flow and looking after the assets, ideally there should be transparency about all finances.

Australian women are less financially literate than men, according to the 2018 HILDA survey, and this can result in them handing over financial responsibility to a partner.

But because women typically have shorter working lives but longer life expectancy, taking a back seat with family money puts them at greater risk of financial abuse.

So women need to look at the accounts and the numbers to make sure that all your money is all there.

This doesn’t mean you necessarily need joint bank accounts. It is not uncommon for both partners to have individual accounts, or a combination of both joint and individual. You do want some discretion on how you spend some of your money. You just want to make sure that there are no nasty surprises.

Don’t ever let anyone bamboozle you or talk down to you about your money. Understanding your debt, managing your bank accounts and knowing where the financial assets are held is a concrete skill you can teach yourself, so don’t be put off being involved.