More than one in four (27%) people are hiding the true state of their finances from those closest to them and the coronavirus crisis is making the situation worse, a survey suggests.
Those keeping money secrets include people who are concealing debts or spending in secret, according to the research from credit reference agency TransUnion.
The average amount that people had in concealed debts was £600.
Some people were also borrowing money from the same family members that they are hiding the true state of their finances from.
Credit card debt is the most common type being hidden and it is more likely to be concealed by women than men.
This is followed by taking on personal bank loans in secret, using overdrafts or not keeping up with outstanding bills.
The survey suggests the coronavirus crisis has made people more inclined to be secretive about money as some are spending out of boredom while at home or to give themselves an emotional lift.
Key reasons for spending in secret including turning to retail therapy to improve mood (17%) and shopping online due to lockdown boredom (14%), the survey of 2,000 people in November found.
This secret spending is likely to get worse during the festive seasonKelli Fielding, TransUnion
Nearly one in 10 (9%) said they are shopping to feel more in “control” – yet a similar proportion (8%) said they are spending money they do not have.
Kelli Fielding, TransUnion’s managing director of consumer interactive in the UK, said: “Online purchases have been the cornerstone of our shopping during the pandemic so it’s really important for people to keep track of spending so they don’t overstretch themselves financially.”
She added: “It’s very worrying to know that many are also hiding financial struggles from those close to them, particularly at a time like this when we’re all facing economic uncertainty, and this secret spending is likely to get worse during the festive season.
“No-one should be afraid or embarrassed to talk openly about money worries – being honest about what’s owed and what you’re spending is essential when it comes to getting back in control of your finances.”
Here are some tips from TransUnion for keeping spending in check:
1. Stick to a monthly budget.
Work out your monthly income and pay all essential outgoings in the first instance, such as mortgage or rent, utility bills and phone contract. This will give you a clear indication of how much you can budget for shopping, and can help you avoid defaulting on bills and ultimately impacting your credit score.
2. Keep up with your repayments.
Make sure you are paying off any existing credit card or store card debt before taking on more. Ideally you should pay more than the minimum payment each month and pay it on time to protect your financial standing. If you are struggling, stop and do the sums of any current repayments going out before doing any more shopping.
3. Do not be blindsided by “special deals”.
Shop around and you may find something similar at a more competitive price.
4. Check your credit report and score regularly as part of monitoring and managing your finances.