Surveys Find 10% to 15% of Indebted Canadians Hide Purchases or Debts from their Partners
A survey from Manulife Bank of Canada finds that about one out of ten Canadians hides large purchases from their partner. In addition, the survey also shows that one out of every five Canadians who are married or in a common law relationship say their partner does not know how much debt they are in.
Many of the purchases that Canadians lied about or hid from their partners (63%) were under $1,000. However, 8% of men surveyed say they have hidden a purchase worth $15,000 or more. This is a significant amount and hiding this type of purchase can lead to serious financial issues in the future.
Hiding debt is a big reason why debt levels continue to be a problem for so many Canadians. If a person hides their debt, this increases the likelihood of their household getting into additional trouble. One reason why is because the other partner, unaware of the couple’s debt issues, may continue spending as if there isn’t a debt problem, potentially spending money that the couple does not have. This could put the couple deeper in debt and, eventually, leave them with too much debt to handle.
Another reason why hiding debt is a big problem is that, when you’re hiding debt, you’re not solving your debt troubles. The longer you go without resolving a debt issue, the more likely it will become a serious issue.
Debt and Stress
Struggling with debt is also incredibly stressful.
The Manulife survey finds that 40% of those surveyed say that debt negatively affects their mental health and their relationships with loved ones. One-third of respondents said finances are the major stress on their relationship. The survey also found that about 50% of Canadians who in debt are stressed about their debt levels. This causes a number of problems, including health issues. In fact, worrying about debt keeps one-in-three Canadians up at night.
The fact that money, debt, and finances are stressful is true among many couples, even with those who do not say that they have debt troubles. About 40% of married or common law couples say that they talk about finances with their partner, but half of those who do say that these discussions cause them stress.
Struggling with Debt
In addition to leading to stress and anxiety, debt causes many other problems. Having a large amount of debt can make it difficult to plan for the future. For instance, over half of those surveyed say they would struggle to handle unexpected expenses. This indicates that they do not have a reasonable emergency fund available to them. If you do not have an emergency fund, an unexpected expense (such as a large home or car repair) can cause you to take on more debt and put yourself in a more difficult financial situation.
According to the survey, half of Canadians have experienced an unexpected change in their financial situation. Three in four of those said the situation was difficult to deal with, while 25% said it was “very difficult” to manage.
Concerned About Debt
Canadians are becoming increasingly concerned about their debt levels and what would happen if their financial situation were to change. Two-thirds of those surveyed by Manulife say that they are concerned about rising rates while 22% are “very” concerned. However, many have responded to rising interest rates by cutting back on dining out, vacations, and discretionary purchases.
However, two in 10 say that they try to ignore money issues altogether. Ignoring a debt problem will not solve it as creditors do not just forget that you owe them.
In fact, ignoring debt can make the situation even worse. When you put off paying your debt, interest continues to be charged, putting you even deeper in debt. You could also be charged penalties if you miss payments. Not only will this cost you money, but your credit rating could be damaged. This will make it much more difficult to get loans in the future and it will mean that you’ll pay more interest on any future loans that you are able to get.
If you have a large amount of debt, or if your debt causes you stress or anxiety, it is best to deal with the situation, instead of hiding it from your loved ones or hoping it goes away. Speak with a licensed professional about your situation and see what options are available to you.