Why you should always lie about money

When it comes to talking about money, Harvey Jones discovers that dishonesty is often the best policy.

Whenever somebody asks me a personal question about my finances my first instinct is to lie.

And no, I'm not a Member of Parliament.

I once made the mistake of telling a close friend how much I earned. It was only a modest salary, but he was skint at the time, and it was enough to make him spit with resentment.

Ever since, on the rare occasion when somebody asks about my earnings, they are always pleasantly surprised to discover I earn slightly less than them.

That applies whether they are earning six figures in the City or £6 an hour filling in at the local nursery.

Discretion, I have decided, is the better part of salary.

But this strategy became rather more difficult to maintain once I got a long-term girlfriend who also happened to be skint.

How can you build a relationship based on if trust and mutual understanding, if you won't even tell your partner how much you earn?

I decided to give it a go anyway.

Secrets and lies

And I'm not the only one. There are more than 200,000 "secret" credit cards in the UK, hidden from the owners' other halves, according to research from Halifax.

Some people use them to buy stuff without their partner finding out. Others want to conceal debts, while some claim they are keeping it in reserve "for an emergency".

Actually, I question that 200,000 figure. Other research suggests that one in 10 Britons keeps a secret bank account.

Keep it hidden

There are times when dishonesty really is the best policy. If you are living with a spendthrift, it may be wise to hide your savings or keep a secret line of credit open.

• Adopt our goal: Build up your savings

Related goal

Build up your savings

How to get into the savings habit, find forgotten money, work out the real value of a savings rate and build up that emergency savings pot.

Do this goal

And a woman who earns a lot more than her partner might generously decide to shelter his delicate male ego from the brutal truth that she is the main provider.

But mostly, dishonesty is plain, well, dishonest. If your secret credit card or bank account is £20,000 in the red, then you are keeping a dirty little secret from the person you claim to love.

It can only end in tears. Last year, an attractive American friend of mine discovered just weeks before her wedding that her fiance was deep in debt. "I so do not do poverty!" she said, and changed the locks that day.

It wasn't the lying that hurt, in her case, but the lack of money. If he had told the truth right at the beginning, she would only have called the locksmith sooner. Which would have saved them both a lot of time and trouble.

Blue fairies and little white lies

There are good reasons to come clean with your partner. When applying for products in joint names, you may be asked to disclose any outstanding debts, which could lead to embarrassing confessions.

Or you could be refused the mortgage, loan or other financial products that you were hoping for.

And don't even think about extending the lie to the application form. Your partner may not have carried out credit checks, but your prospective lender will.

And as MPs have discovered, there are few things more demeaning than seeing your financial indiscretions in black and white.

And there are plenty of other dangers in keeping financial secrets, as we warned in Don't let debt destroy your relationship.

Lies, lies, lies

The biggest danger with lying about money to your nearest and dearest is that one day they will discover the truth.

As the Blue Fairy told Pinocchio: "A lie keeps growing and growing until it's as plain as the nose on your face."

That didn't stop me from giving my girlfriend a deliberately hazy picture of my earnings.

Although for once, I didn't claim to earn less than her. Seeing that she was a mature student at the time, and I had just bought a flat, she wouldn't have believed me.

When she eventually discovered I was earning a fair bit more than the £8,000 a year she could muster from bar work and babysitting, she was furious, especially when she remembered our early dates when she had insisted on going Dutch.

Or even worse, when I had insisted.

Dead honest

What really persuaded me to come clean about money was the commitment of having a child.

Although history shows that I would lie like a frontbencher about money to my girlfriend, I would never cheat our daughter.

So a couple of months ago, I bundled up all my bank account, stocks and shares, pensions, life insurance and other details, and handed them to my girlfriend for safekeeping.

• Adopt our goal: Cut the cost of having a baby

Related goal

Cut the cost of having a baby

Having a baby can cost a small fortune. Here's how to keep your costs down – and set your baby up, financially, for life!

Do this goal

Now I feel cleansed, but more importantly, I have done a very sensible and practical thing.

Because there is another danger with keeping your finances to yourself. If you die suddenly, your loved ones will never track down your secret savings and investments, because they never knew you had them in the first place. They will expire with you. And what a terrible waste that would be.

I am considerably poorer than you

So honesty, I reluctantly admit, is the best policy. But only where my girlfriend is concerned. I still routinely lie to everybody else.

That includes my old friend, who is still on his uppers. Any conversation we have that touches on money ends in a race to prove which of us is most broke. It helps keep our friendship intact.

Although to be fair, most people don't ask. They know the reply is likely to offend at least one of you.

This is a classic article which has recently been updated.

More: The easiest way to slash your food bill | Make money in the sunshine