Friday, March 14, 2008

Hidden Accounts?

On the WIR message board a woman asked if she should be worried about her husband's secret account. She said he said "he'd told her about opening an account awhile ago." The account was to be used on a mad money surprise for her or them. However, she was upset because the amount of money in the account was substantial, 6 months of mortgage payments. She said she didn't want to just blow such money. So she asked people should be suspicious? Also she said she paid all the bills and they only had joint accounts. But her husband had this in his name alone. Also she wasn't sure how long he had the account, which was bad because potentially they had to refile taxes because they hadn't claimed the 1099 income.

I thought about it and decided, it depends. First of all 6 months of mortgage is what, at least $6k? That is a lot of money. I think I would be a bit suspicious, even if my husband told me he had discussed it with me. I would wonder where did he get the money to fund such an account? We have allowances of $40/month. So I would be worried.

Second, I would be disturbed over how long he was stashing cash and not telling me. And worse yet if he did not reveal the account while we filed our taxes. It would worry me because we could be audited by the IRS.

But to play the devil's advocate maybe the husband is saving for a special surprise. So it could be completely innocent. Would you be suspicious? Do you have any secret accounts from you spouse?

I don't and while I could, I don't think DH could. But how would someone even hide secret accounts if you file joint taxes? Wouldn't it raise red flags with the IRS? Or is the chances of an audit so small it doesn't matter?

I think it's an interesting conundrum.

EDITED TO ADD: The amount of the hidden money is more than $10k. So it is substantially more than $6k. It is Five Figures Hidden.


Anonymous said...

Ah, is the husbands' name, Eliot? As in 'Spitzer'? :(

Don't like it. Not at all.

No Debt Plan said...

We don't use "secret" accounts, but we do allot 2% of income each month that we can each spend whatever way we want. If I saved up over time to $6,000, then I can do whatever I want with it. I guess it is kind of out in the open though -- she can see the balance.

In this case, for me, it depends on how the money is funded. Is he doing something on the side to pay for it, or how is the money getting in the account?

MEG said...

Honestly, I don't think it's that big of a deal. People need autonomy, and if that couple doesn't have it build in to their budget, then I totally understand the desire to stash some extra cash - no matter what the purpose of it.

I could see myself having a secret account or two once I'm married, especially if my husband is opposed to rigid savings - or spontaneous spending. If I'm making the money (or managing it) I could totally see myself putting part of my bonus aside (or a bit each month) for a) savings that we otherwise wouldn't make as a couple, b) a special gift for the hubby, or c) special stuff for me if hubby is a savings freak.

Living Almost Large said...

Interesting, but MEG, why would it be secret? What's the big deal with saying I need to have $X spending money?

But that's not the case here. The case here is wowsa, where'd he get the money from?

You need some serious chump change or a long time to have saved say $6k? And I doubt anyone just gets $1k/month spending money.

Cinder said...

Regardless of how the money is funded, marriages are based on honesty and trust. There is limited information to go on, but she needs to discuss this matter in depth with him to get it resolved, whether or not it's for a 'nice surprise' (which you can perform within hiding money from your spouse, ya know).

Mom said...

My husband has a checking account where he deposits his "mad money" each month. If he doesn't spend it all then it builds up in there over time. I suppose if he saved up $6K in there it would be his money to with as he pleases.

We also don't know this particular couples situation. Maybe she is a spender and they don't have an emergency fund. He could feel better having this money set aside where she can't get at it.

minimum wage said...

I've had an account for decades and I've never reported it on my taxes and I've never been audited.

Anonymous said...

I'm a husband and I've got a "secret" account. It has always been for mad money maybe some fantasy football winnings or a Super Bowl pool. I'm not sure what the upper limit on a mad money account should be but 6K is starting to sound a little bit shady.

Just my 2cents

Living Almost Large said...

The amount of the hidden money is above $10k.