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A topic that I see come up time after time on personal finance sites is related to married couples, and whether or not they should have joint accounts. During those discussions one thing that invariably comes up is the topic of hiding money from one's spouse – or keeping secrets about what you're spending money on.

Today I thought I'd take a brief look at money secrets, and why people keep them.

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How Many People Actually Keep Secrets About Money?

After reading the comments on several posts about having joint finances, I realized that there were probably more people keeping secrets about money from their spouses than I had originally thought. Then I found a post on the Consumerist talking about financial infidelity. It found that almost 1/3 of those polled admitted to lying to spouses about money.

An online poll commissioned by ForbesWoman and the National Endowment for Financial Education (NEFE) and conducted by Harris Interactive, surveyed 2,019 U.S. adults from December 17 to 21 and found that 31% of those who combined finances had admitted to lying to spouses about money. Another third of those admitted they themselves had been deceived about money. For those couples experiencing financial infidelity, 67% said the deception led to an argument and 42% said it caused less trust in the relationship. A further 16% indicated the problem had led to divorce, and 11% reported a separation.

So almost a third have lied about money, and another third said they had been lied to. That's an amazing number of people lying about money! Can people actually think that lying about money can be justified?

What Kinds Of Money Secrets Do People Keep?

The kind of money secrets that people keep seem to vary according to the study:

Among both offenders and victims, the leading money crimes were hiding cash, minor purchases and bills. Meanwhile, a significant number of people admitted hiding major purchases, keeping secret bank accounts and lying about their debt or earnings.

So for some reason people feel a need to hide cash, make purchases without their partner's knowledge and pay secret bills so they don't get caught. Even more surprising to me is the number of people hiding more major purchases – opening secret bank accounts or lying about how much money they make. There are even folks saving up money on the side “just in case” a marriage doesn't work out. Talk about planning for failure!

I have an acquaintance who openly talked about having a secret bank account at work a few years ago. Part of her paycheck went into the secret account so she could buy things she wanted, and the rest went into a joint account with her husband. There was obviously little or no communication going on between husband and wife, and plenty of deception. It was a big game of control – who could control the situation more. Not surprisingly the two are now divorced, in part because of the deception and financial infidelity, but also because of sexual infidelity. It was not a healthy relationship.

One matrimonial law expert, Nancy Chemtob, feels like she has seen it all. Some examples she gave on the Forbes article:

she once worked with the owner of a hedge fund who secretly spent millions on a mistress. In five of their 10 years of marriage, his wife had no clue that he was spending over $20,000 a month on the other woman, ultimately buying her a house, car and extravagant jewelry. Another of her clients is in her 30s, remarried and has a son from a previous marriage, Chemtob says. Three years ago, she lied to her new husband that she wasn’t receiving child support. She was. Now he pays for the child’s expenses and private schooling while the woman stashes about $7,000 a month in a hidden bank account. In one of the most extreme deceptions Chemtob’s come across, a 20-something woman fabricated her entire financial history. The original lie happened on the first date. Because he was very well-educated, successful and high-earning, she didn’t think he’d like her when she told him she didn’t have a degree or a job. She lied, saying she had her masters and a salaried position. The woman continued the fib while they dated and into their eventual marriage. When he left home for work, she left too. When he returned home in the evening, so did she. Because he was so successful, he paid for everything and never noticed that she didn’t have an income. Eventually he did discover the truth and promptly filed for divorce.

The lies go on and on. Do people really think they can get away with the deception, and have no consequences?

Why Do People Lie About Money?

Why is it that people lie about money in the first place? Is it because they're selfish, insecure or just wanting to exert control in some way?

Boston-based family therapist Carleton Kendrick has been counseling couples for over 30 years and says money deception has become a huge issue in the last decade. He suspects the ease of using credit cards and purchasing online may make the act easier but doesn’t explain the lies. Kendrick says the chief reasons people lie about money to their partners are pragmatism, control, guilt and fear. The pragmatic lie may result from planning an eventual split and not wanting the other to know how much money is available. Financial infidelity for control may include revenge spending, as one partner overspends to prove their independence or to get back at the other for something lacking in the relationship. Knowingly irresponsible behavior may cause guilt and embarrassment, so the person attempts to cover it up. Deceit may also occur because they fear their partner’s reaction to the truth. Kendrick notes that how we are raised influences our money philosophies in relationships and can create some gendered behaviors or assumptions. “Girls still see their mothers at check-out, saying, ‘We won’t tell Daddy about this; it will be our little secret,’” he says.

So the reasons that people lie are just about as numerous and varied as the lies that people tell. They do it out of guilt, fear, control, and out of pragmatism when there is a faltering relationship.

What Can You Do To Fix Or Avoid Financial Infidelity?

So we've established that deception about money runs rampant these days, but what can we do to avoid having situations like this in our own marriages and relationships?

National Endowment for Financial Education’s Beck advises that couples have the money talk early–well before marriage–to avoid money lies in their relationships. If you are already married or in a committed relationship, he suggests using tax season as a nonthreatening way to ask your partner questions and gain a better grasp of shared finances. Those who suspect or discover that they are currently victims of financial infidelity should first figure out how deep the lies go and gather all the details. One-third of those in relationships impacted by money deception say they have resolved to do something this year, with most planning to communicate more openly and create a shared budget for 2011.

To me the key here is for there to be plenty of open communication within a marriage. How do you foster those open lines of communication? By having shared weekly or monthly budget meetings, talking regularly about money with each other – even if one person is the main one doing the finances, and by creating a safe environment in the relationship for someone to ask forgiveness when they've done something they shouldn't have. They need to know the other person will be willing to forgive. And of course, you need to have a relationship where you're looking out for your partner's best as well – not just your own.

Have you ever kept a secret about money? Did you feel justified in doing that, and if so, why? Have you ever had to come clean about a deception, or had someone confess a deception? Tell us your thoughts on money lies in the comments!

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