Financial Infidelity: How to Save Your Marriage and Bank Account

Think back on the last fight you had with your partner. Chances are good that it involved money. Arguments about money occur at least monthly for about one-third of couples, according to a 2016 study by the financial services company Ameriprise Financial Inc. Arguments about financial issues last longer than fights over parenting, sex, or in-laws, and they take much longer to recover from, according to researchers at Kansas State University. Moreover, the same researchers found that conflict about money is the best predictor of the probability of divorce. Find out what forms of financial deceit or infidelity — where they’re not being upfront about their spending or money sources — spouses may engage in and what to do if you encounter them.

Carol Povenmire, Ph.D., is a licensed psychologist with a practice in Pasadena, California.

Couples have many differences in terms of personal values, goals, and communication styles, so it is not surprising that they differ about financial issues as well. In the Ameriprise study, 73 percent of respondents indicated that their partner had a different money-management style than they did. 

It is how those differences in financial goals and strategies are addressed in the relationship that determines the health and success of the partnership. The same factors that build and sustain romantic partnerships, such as the ability to trust, communicate clearly, resolve conflict in productive ways, define and implement shared goals, adjust to changing circumstances, and to weather crisis are necessary in ensuring financial stability. When there are problems in these areas, they will also affect the health of your financial partnership.

While you hope for continued excitement in the romantic aspects of your relationship, the financial aspect of your connection is about fulfilling your need for security, safety, and stability.

The shared lease or mortgage, car purchase, phone bill, or credit card means that your individual credit rating is affected by the decisions and actions of both you and your partner. You expect your partner to protect you and watch your back.

When that sense of safety is violated by your partner, it is a breach of trust that can damage or rupture the relationship. Financial infidelity is a term used to describe a variety of behaviors that breach the financial partnership by means of secrecy, omission, or deception.

Unfortunately, recent studies have found that financial infidelity is not uncommon. In a 2016 survey, the National Endowment for Financial Education (NEFE) found that 42 percent of respondents had deceived their current or past mates about financial issues. The incidence of financial infidelity also rose 9 percent over two years between 2014 and 2016, indicating an upward trend.

If you are on the receiving end of the deception, understanding what motivates the behavior will shape your attitude toward your partner and determine your recourse. For example, if you and your partner are among the 11 percent who never discuss budgeting or finances, your mate may not know what is in or out of bounds in your relationship. There has been no agreement to violate. Recourse involves having those overdue conversations about budgets and spending. 

In the NEFE study, 32 percent of partners who acknowledged some version of financial infidelity felt entitled to privacy in some aspects of their financial life, even from their spouse or partner.

Your partner might have a strong desire for financial independence or a pattern of self-serving behavior in their interpersonal lives. Sometimes, this need for autonomy can be accommodated by agreements to maintain individual checking accounts and credit cards that allow for different spending priorities while still ensuring that funds for shared living expenses will be provided by both parties.

It’s also possible that your partner is expressing strong misgivings about your relationship. There may be an ambivalence or uncertainty about committing both financially or emotionally, or significant opposition or resentment about the way resources are allocated in the relationship. If your partner thinks that it’s not a big deal to conceal accounts or spending, this reflects a disregard for your collaborative relationship. All of these are indications of serious challenges to the partnership that merit exploration in couples therapy. 

Another strong motivator for deception is the desire to avoid judgment or disapproval. Thirty percent of respondents in the NEFE study actually knew that their partner would not approve of their decision, and another 15 percent simply anticipated that the partner would disapprove. The motivational goal for the secretive activities is to avoid conflict or duck anger. The problem is that this strategy often backfires. As a partner, you might feel even more betrayed and outraged upon discovery than you might have otherwise felt. Model complete transparency about your financial decisions to encourage your mate to do the same.

Conflict can also occur when your partner has different financial goals, values and priorities than you do. While they might have agreed to a plan for saving or a long-term goal, such as buying a home, they feel more compelled to help their family financially. The problem is that they didn’t communicate this verbally; they simply implemented this in their financial decisions. Ensure that you have made it comfortable for your mate to express and act on their priorities, even when yours are very different.

Another 25 percent of the NEFE respondents reported that they were embarrassed about their financial circumstances. Often partners don’t want to disclose past debts early in relationships because they fear jeopardizing a new connection, and then they perpetuate the secrecy out of shame or embarrassment as the relationships gets more serious.

Partners may also simply lack the financial skills to stay on track budget-wise and need more support and guidance. Addiction issues may also be a factor in their financial life. The version of intervention depends on the needs, whether that be for debt counseling, financial planning, or substance-abuse treatment.

Financial indiscretions come in a variety of forms, and it pays to be aware of them. Keep in mind that more than one kind of infidelity can be happening at once. Following are a few to watch for.

A 2014 Money Magazine study reported that 22 percent of married people had spent money without their partner’s knowledge. For husbands, the spending was often on recreational activities and electronics, while for wives, it tended to involve spending on clothing, shoes, and gifts. The 2016 NEFE study found a similar rate, but it also noted an additional 7 percent had not disclosed a major purchase to their partners. Another 12 percent of respondents had hidden a bill or bank statement to avoid discovery by their mate.

This includes hoarding cash and maintaining secret bank or credit card accounts. The NEFE study found that 20 percent of respondents had hidden cash and 6 percent of their sample admitted having secret bank accounts. Other studies have found much higher rates for secret accounts. As many as 23 percent of Americans have an account without their spouse’s awareness, according to a Credit Card.com study.

Undisclosed debts can include personal or student loans, credit card balances, business liabilities, property liens, medical bills and loans, or gifts provided to family members. The NEFE study indicated that 8 percent of respondents had not disclosed debt obligations to their partners. Other researchers found a more alarming number, as high as 27 percent. One study by SafeHome.org found that women were more likely than men to omit information about their debts, roughly 17 percent vs. 10 percent, respectively.

This includes deception about one’s income or salary. For some, this form of deception entails exaggerating their income or salary, while for others it can mean hiding or minimizing income such as bonuses, alimony or child support payments. The NEFE study found that 5 percent of respondents lied about their earnings. A SafeHome survey found a more disturbing picture. Roughly 13 percent of men and 15 percent of women deceived their partners about their earnings.

This includes understating the real cost of items purchased, covering up missed payments on bills, modifying debt repayment schedules, changing tax deductions, altering retirement plan deductions, and tax fraud. In the NEFE study, 11 percent admitted lying about some aspect of their financial circumstances.

Given that people try hard to avoid detection, how do you stumble on these infidelities? It’s often through the arrival of unknown credit card or bank statements in the mail, getting calls from bill collectors about unfamiliar accounts and receiving account alerts.

Behavioral clues can also be the tip off. These behavioral indicators include:
· Withdrawing or becoming defensive when financial issues are discussed.
· Insisting on screening the mail.
· Changing passwords to shared online financial accounts.
· Sporting a lot of new clothing or expensive gadgets.
· A sudden unusual generosity by a partner.

Clearly, finances can be a volatile subject, and emotions can run high when discussing financial infidelities. Following are some tips to keep in mind if you suspect — or if you are disclosing — financial infidelity.

· Spend the time to reach a calm state. This can take hours or days.
· Approach your partner when you both have a big window of time.
· Weekends might be best, but don’t ambush your partner on a date night.
· Avoid talking late in the day or when you are not both sober.

If you suspect financial infidelity, begin the conversation with a brief statement about what occurred, and then ask open-ended questions. For example, “This bill arrived yesterday. I don’t recognize the account. What can you tell me about this?” Wait for your partner to respond, and focus on remaining calm. You are there to listen. If withdrawal and defensiveness occur, offer understanding that this is a difficult conversation, but you are there to make sense of what has occurred.

Once you are satisfied that you understand the situation, ask them what resolution they can bring to the situation. Consider their proposals and make your own recommendations for debt counseling, couples therapy, or financial planning. Establish an ongoing check-in process to evaluate progress and to avoid future problems.

If you are disclosing financial infidelity, start with a brief statement. For example, “I want to bring you in on a situation. I am carrying some debt that I did not disclose to you.” Or “I overspent on gifts this holiday.” Make this about your behavior, choices, and decisions, not your partner’s.

You may encounter shock, anger, disappointment, or calm neutrality. Your mate needs time to process the information. Acknowledge their feelings non-defensively. They will have questions that they need answered. Respond calmly and fully disclose. When they are ready, propose a set of actions or a plan for proceeding. Ask them about their needs and plans. Hold regular meetings to discuss finances with your mate.

Trust is earned over time and with complete financial transparency. Expect that it will take a long time, and that the level of trust will be fragile and easily disrupted. Be aware of vulnerable moments, such as the holidays, football season, tax time, or whenever money issues are more likely to arise and stress levels can be high. Establish a safety protocol for vulnerable times, such as times accompanying your partner on shopping trips if they request it or offering ongoing access to your credit report. Eventual forgiveness will follow if trust can be renewed and then maintained.

Making amends for financial infidelity can involve individual steps as well as collective actions. Putting agreements in writing formalizes your understanding of the steps that will be taken to address the problem. Consider accepting overtime opportunities at work or taking on a part-time job to pay off debt. Even bringing your lunch to work and skipping the trips for coffee can be a concession.

Partners who were deceived might want to establish their own rainy-day fund to ensure that they feel protected and may want their own credit cards to maintain or improve their credit standing. This is a separate (and disclosed) account for their purposes.

There are numerous apps and banking tools to assist couples in managing their money. Some of these provide budgeting and savings strategies, while others ensure effective coordination of bill paying with multiple parties. Some of these are free to use, while others have a monthly fee. Some of these apps include:
· Mint
· You Need A Budget (YNAB)
· Goodbudget
· HomeBudget
· Honeydue or Honeyfi
· PocketGuard
· Wally
· Simple

In more complex situations, expert consultation is advisable. This can include couples counseling to improve communication, resolve conflict and explore the dynamics around money, control, and autonomy. Your relationship with finances reflects deep psychological needs, and attitudes toward money are often influenced by earlier life experiences with wealth or poverty as well as inherited family beliefs. Money also functions as a symbolic measure of worth or value.  

Financial planning experts and debt counselors are a source of information and guidance. Some of these services are offered free or on a sliding scale while others are fee-based and more comprehensive. Couples can schedule regular financial check-ups to make sure that they are on track to meet their goals.

An additional resource for those in chronic financial chaos is Debtors Anonymous, a free program based on the 12-step model. It addresses the underlying dynamics of financial self-sabotage and establishes a recovery process with support from sponsors and group members.

These steps address the problem of financial infidelity in the past or present tense. Optimally, money issues are surfaced much earlier in the relationship, even as you are dating. This can involve negotiations around dating expenses, including meals, activities, and travel.

Before you live together or marry, a conversation about money management is invaluable. This includes full disclosure about spending and saving habits, income, debts and loan obligations, and lifetime financial goals. Creating processes to manage shared expenses can include individual or joint bank and credit card accounts, as well as combinations of both. You can also explore premarital counseling and online tools, such as the NEFE’s LifeValues Quiz, that help you and mate identify the values guiding your financial decisions. Once you have defined your goals, schedule frequent meetings to update each other on your progress and plan for upcoming changes.

The best preventative measure is to be among the 63 percent of partners who discuss finances at least several times a month. Given the important impact of financial decision-making on the well-being of your relationship, your respective credit ratings, and your ability to plan for the future, it is worth the time and energy to protect yourself from financial surprises in all of their forms.