New Study Shows 36% of Couples Hide Spending From Partner, And It’s a Pressure Point

Having the hard talk? It can literally pay to do so. Here’s how to stop holding out on your partner and start making money together.

| More on:
Mature financial advisor showing report to young couple for their investment

Image source: Getty Images

When it comes to the hardest conversations for couples to have, money usually takes the top spot. And it looks like that continues to be the case, especially in this difficult economic environment. In fact, a new study by the Bank of Montreal (TSX:BMO) recently found that a whopping 36% of couples admit that they aren’t always truthful with their partners about finances.

But not only is honesty the best policy, it can help you and your partner create far more passive income in the future. So today, let’s look at why and how to get started with some financial honesty.

Talk it out

It can be such a hard conversation to have, but being honest with your partner about your financial fears as well as needs can be incredibly helpful to you both. Yet only 51% of those in the BMO study said finances should be discussed early on in a relationship.

Nearly a third believed that the conversation could be put off until living together. But this can affect your future of living together even sooner. Are you addicted to buying clothes? Maybe you and your partner can come up with a budget that works for you both. Do you like buying and selling stocks? Again, come up with a reasonable amount that won’t put your future at risk.

Now I’m not saying that partners need to agree to every single line item that you spend. And I’m not saying that everything needs to be joint and intertwined. Having some independence is certainly beneficial to you and your partner.

But you should certainly know a fair amount about the other person’s finances. If they have debt, that could fall on you in a worst-case scenario, and can also affect credit ratings. Bottom line, you’re a team! And need to act like one. Furthermore, it doesn’t all have to be bad news when it comes to spending and saving together.

Meet with an advisor

A great step is to simply put the decisions in the hands of someone else. For instance, consider meeting with a financial advisor. This person can give you a line by line list of what to do so that you and your partner get on the same page, and work towards the same goals.

It’s likely the advisor will first ask about your money coming in, and money going out. From there, they’ll help you plan out a budget. What’s great is that many banks also offer applications where you can put in your budget. That way, every time you spend something on say a joint credit card, that will come out of your monthly budget.

And it’s not just about how you’re spending, but saving as well. An advisor can help you both determine the kind of goals you want to set up together. Not just the big ones like retirement, but maybe a trip next year! Now not only are you working towards goals together, but achieving them together as well. And that will likely bring you closer, not further apart.

Start investing

Part of the plan will likely also include investing together. You could both identify an amount you’re comfortable with from your income to put towards a guaranteed income certificate (GIC), for instance. It can even be as short as 30 days. You could also agree to an amount you can put in your own separate investment accounts.

For instance, let’s say you want to invest towards a trip next year. You want to achieve $10,000 in that account, so you both need to end up with a portfolio of about $5,000. To do this, a great idea is to invest in dividend stocks that show strong returns. And a great, solid one to hold would be Hydro One (TSX:H).

Hydro One stock currently has seen shares rise by 15% in the last year alone. It holds a dividend yield of 2.95% as of writing as well. So here is what you would need to invest if the stock does this once more, adding in both returns and dividends.

COMPANYRECENT PRICENUMBER OF SHARESDIVIDENDTOTAL PAYOUTFREQUENCYPORTFOLIO TOTAL
H – now$40106$1.19$126.14quarterly$4,240
H – highs$46106$1.19$126.14quarterly$4,876

With returns of $636 and dividends of $126.14, you would create a portfolio worth $5,002.14! Thereby creating enough to go on that trip for you and your partner. So don’t be afraid! Have the hard talk. It can literally pay to do so.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Amy Legate-Wolfe has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

More on Energy Stocks

Group of industrial workers in a refinery - oil processing equipment and machinery
Energy Stocks

2 Energy Stocks to Buy Hand Over Fist in February

Here are two of the best Canadian energy stocks you can buy in February 2024.

Read more »

Hand arranging wood block stacking as step stair with arrow up.
Energy Stocks

2 Growth Stocks That Could Skyrocket in 2024

Are you looking to add some growth to your investment portfolio this year? Here are two top growth stocks to…

Read more »

Utility, wind power
Energy Stocks

Is Brookfield Renewable Partners Stock a Buy Now?

Brookfield Renewable Partners continues to generate solid earnings, distribute higher dividends, and deliver above average capital gains.

Read more »

canadian energy oil
Energy Stocks

Better Energy Stock: SU or CNQ?

Suncor stock is grossly undervalued, as the company makes headway to recover from operational and safety challenges that have plagued…

Read more »

edit Woman calculating figures next to a laptop
Energy Stocks

How Long Would It Take to Turn $20,000 Into $100,000 With TSX Dividend Stocks?

TSX dividend stocks can convert a one-time $20,000 investment into $100,000 if you make your dividends work for you. Let’s…

Read more »

Senior Couple Walking With Pet Bulldog In Countryside
Energy Stocks

Retirees: Is Enbridge (TSX:ENB) the Best Dividend Stock for You to Buy Now?

Enbridge rallied in recent months. Are more gains on the way?

Read more »

potted green plant grows up in arrow shape
Energy Stocks

3 Stocks That Could Make You Significantly Richer in 2024

Three outperforming small-cap stocks could deliver outsized gains and make investors richer in 2024.

Read more »

dividends grow over time
Energy Stocks

If You Had Invested $5,000 in Enbridge Stock in 2004, This Is How Much You Would Have Today

Enbridge stock has delivered outsized to shareholders in the last 20 years. But is this TSX dividend stock a good…

Read more »