Being transparent about money matters is critical in partnerships and marriage. Here’s how to spot financial infidelity — and rectify it. When Melissa Houston and her husband first got married, they had a financial plan and laid out some joint money goals. “We knew what we were saving for and how we should spend money,” she says.
But as the years went by, Houston found herself emotionally spending, dropping $1K to $2K on weekend trips with her friends, as well as shelling out thousands on home renovations and random impulse buys. “I was using credit to cover my expenses and hid that from him,” she recalls. “As the boxes came in the mail, he asked me what was going on, and I assured him we had the money.”
Eventually, Houston told her husband the truth. She had been hiding her spending from him and had gotten the family into a financial hole. It put a giant strain on her marriage, and she is still working to gain back her husband’s trust. The duo has since gone back to their previous ways of openly discussing money. Houston is honest about her spending and runs big purchases by her partner instead of buying them behind his back.
What Houston and her husband experienced was financial infidelity. “Simply put, financial infidelity is when your spouse lies to you or keeps details about financial transactions and financial assets hidden from you,” says Sandra Radna, an attorney and the author of You’re Getting Divorced … Now What? You could be on the receiving end of financial infidelity, or you could be the one committing it, like Houston was. Either way, financial infidelity can be incredibly toxic to a marriage and is something that you should work to avoid at all costs.
What does financial infidelity look like?
Financial infidelity could be everything from declining to reveal some of your credit card purchases or other debts to your partner to stashing a portion of your paycheck into an account that your partner doesn’t know about, and making large purchases without consulting your significant other.
“We see financial infidelity occur in some really common ways, like not mentioning how much you spent on your credit card, or when one person makes a large purchase without telling their partner,” says Lauren Silbert, the vice president of personal finance with the Balance. This type of infidelity, she explains, can also occur when one person is keeping a secret account or hoarding cash or other valuables without the other person knowing.
“Another instance is the higher-earning spouse actually hiding how much money they make, keeping the majority of it for themselves, without their partner ever knowing it existed,” Silbert adds. It’s important to build a foundation of open communication and trust when it comes to dealing with financial infidelity.
The dangers of financial infidelity
Financial infidelity can break the trust in your marriage. “Arguably, the most important part of any relationship is trust,” explains Radna. She stresses that if one of the people in the relationship is not honest about what is happening in your joint financial lives, it’s a huge breach and is difficult to overcome.
“It begs the question ‘If you are lying about that, what else are you lying about?’” Radna says. And in her experience, for some couples the emotional aftermath of financial infidelity is insurmountable and can be a definite cause of divorce.
There can be significant financial repercussions as well, since, when you’re married, your partner’s debt becomes your debt. “It could also impact your credit score,” explains Ben Reynolds, the CEO and founder of Sure Dividend.
In order to avoid the repercussions of financial infidelity from occurring, it’s important to be open about your financial goals, purchases, and spending habits with your spouse. Here are some tips to keep financial infidelity at bay.
Be up front from the start
The way that you start your marriage can really set the tone for how you both talk about money. “I recommend that both parties leave everything on the table from the beginning,” says Jayden Doye, a certified public accountant and the owner of Prestige Accounting Solutions in Sandy Springs, Georgia. “They should lay out all of their assets and debts and discuss financial goals.
” Doye has seen too many couples enter into relationships with financial secrets, hiding student loans, debt, and spending habits from each other. Getting on the same page from the beginning and discussing your debt, making a plan for your spending, and working together on this can keep financial infidelity from ever occurring.
Victoria Lowell, founder of Empowered Worth and a certified divorce financial analyst and college finance counselor, agrees. “Couples need to start discussing money and finances very early on, and definitely before moving in together or marrying,” she says, noting that she often coaches clients with premarital financial counseling, which her clients find extremely beneficial.
Make money discussions routine
“Communication is the key,” says Ted Rossman, a senior industry analyst with Creditcards.com. “Most people have a hard time talking about money, but we need to get over that hurdle,” he adds. Rossman suggests scheduling regular money check-ins with your partner. “They don’t have to be long or formal. Perhaps once a month, go through upcoming bills and recent expenses and make sure you’re on track,” he says.
In addition to expenses, talk about your goals as well. This, says Rossman, can be really freeing and can reframe the discussion in a very positive way. “Do you want to buy a home in a couple years? Retire early? Send your kids to college? Identifying your money goals and values and working towards them together is so important and strengthens a relationship,” Rossman explains.
Money conversations may seem daunting at first, but it all starts with building trust and safety around money, says Silbert. She says to start with some “gentler money talks. For example, don’t try to make tough decisions right away. Instead, share about how your parents handled money. Talk about your experiences with financial institutions. Tell each other what item or experience has always represented true luxury in your mind.
And so on.” As the safety grows, then move on to harder conversations. These, explains Silbert, are usually the ones that have more opportunities for disagreement or discomfort. And when having these conversations, it’s important to approach them with an open mind and to create a judgment-free zone.
Come clean if you’ve been hiding things from your partner
The longer you conceal money and spending habits from your partner, the more damage you are likely to cause to your relationship and your finances. To heal from financial infidelity, the offending partner needs to come forward. Carrie Krawiec, a licensed marriage and family therapist at Birmingham Maple Clinic in Troy, Michigan, shares her three steps for admitting to financial infidelity:
- Sincerely apologize.
- Take responsibility without excuses.
- Take all steps and measures to make sure the behavior doesn’t repeat itself.
“When the first three are done, there should be acknowledgment by the wounded party that one to three have been sufficiently met,” she explains.
Bring in a third party
It can be beneficial to schedule meetings with a financial adviser who can help you draw up money goals as a couple and get you thinking about a long-term financial strategy. A couple’s counselor can also assist partners with working through any conflicts that they may be having about everyday spending.
And it’s especially important to get help when you’re working through a bout of financial infidelity in your marriage, as this can be hard to navigate alone. “I strongly suggest that couples who are facing this seek counseling,” suggests Lowell, who notes that a marriage therapist or financial coach can help partners open up the dialogue to discuss their philosophy about money, debt, and so forth.
Source: What Is Financial Infidelity?