Financial infidelity involves “engaging in any financial behavior that is expected to be disapproved of by one’s romantic partner and intentionally failing to disclose this behavior to them”, according to Professor Emily Garbinsky.
Financial infidelity can be different for everyone; it could involve funneling money into secret accounts, lying about how much debt you’re carrying, or hiding a shopping addiction. Whatever the situation, it can quickly destroy a relationship.
Those committing financial infidelity may share many of the same behaviors as those cheating on their spouse. This includes but is not limited to trying to hide their behavior, avoiding discussions, and flat out lying about it.
Why is financial infidelity a problem?
The most obvious reason is that it ruins relationships. “Financial infidelity has the potential to be as harmful for relationship health and longevity as sexual infidelity, as conflicts over money are also a primary reason for divorce,” said Professor Jenny Olson.
However, a less talked about topic is that it’s a symptom of poor financial decision-making. And it often means that the guilty party doesn’t have their finances under control.
According to NPR, 41% of American adults admit to hiding accounts, debts, or spending habits from their spouse or partner. A survey from CreditCards.com found that millennials are twice as likely to hide money from their partners than other generations.
Social Media Influence
The influence of social media today creates a tremendous amount of pressure to consume things we can’t afford. Most millennials check Instagram, Snapchat, Facebook, and other social media outlets throughout the day every single day.
Photos on social media are often misleading. They make the life of the poster look as if they are in a constant state of joy and happiness. From highlighting extravagant vacations to showing off their outfit of the day.
And companies pay social media influencers a lot of money to specifically market products to their followers. Not only is this a great way to catch your attention, but you can view an item in a photo, click an affiliate link, and have the thing purchased within 15 seconds. This makes it easy to spend outside of your means and racking up huge credit card bills.
Millennials are also carrying around massive amounts of student loan debt in comparison to older generations. The cost of college tuition has increased by approximately 213% since 1988. According to CNBC, the average yearly tuition cost totaled $34,740 in 2018. Paying your way through school is becoming nearly impossible.
It’s not surprising that these factors likely contribute to why millennials are likely to lie about their finances.
How to avoid financial infidelity
Be Open and Honest
Similarly to most other relationships, honesty is the foundation for a secure financial relationship with your partner (and yourself!).
Although you may not be legally bound to someone else’s debts until you are married, it is wise to sit down and have a discussion about each other’s financial situation before you decide to tie the knot. If I don’t have your attention yet, money issues are often cited as the TOP reason for divorce.
To have a fruitful discussion with your partner, both of you need to realize that transparency is the key. Remember, you’re both in this together. The best teams come together and work towards a common goal. If you don’t disclose that credit card debt and later down the road get denied for a mortgage, for example, your partner will likely feel blindsided and hurt.
Communication is Key
I have heard many people say, “I have tried talking to my spouse about finances, but they are not interested.” This can be quite frustrating.
We’ve all been in a scenario when someone else did not have the same perspective as us.
It can be particularly tricky if one person “knows” that they are right. The fact of the matter is that there could be many reasons why a person doesn’t want to discuss their finances, and this may not be malicious.
Perhaps their family didn’t discuss finances growing up, and they do not understand what the big deal is. They may be accustomed to living with a large credit card balance, and it doesn’t cause them any distress.
Maybe they’re afraid of what they would find out if they sat down and looked at their complete financial picture (ignorance is bliss, as they say). It could be anything. The only way to find out is to ask them.
That’s a great place to start the conversation. Don’t even talk directly about finances and the numbers. Just start discussing their feelings about finances and try to see where they are coming from.
Likewise, it would help if you shared your feelings and why it is essential for you to discuss these topics. Once they know the reason why you want to talk about it, they may open up and meet you halfway.
It can be challenging to navigate tough conversations with a loved one, especially on your own, so don’t be afraid to ask for help. This can come from a therapist, friend, religious leader, or whoever it is that you feel comfortable speaking with about your fears.
Put in Equal Effort
Both partners need to have a solid plan and be equally committed to the effort. When my wife and I first started talking about creating a budget, she was a bit resistant to the idea because she felt it seemed too restricting. What we both quickly realized, however, is that budgeting provides us enormous relief.
A surprising amount of comfort and flexibility comes from knowing exactly where your money is going. Pick one day each week to pay bills and work on your budget together. This will allow both of you to provide input into how much money you allocate to each category, review the past week’s expenses, and adjust as needed.
Having a plan for your money definitely takes a lot of hard work and dedication from both partners. Something we do that keeps us motivated and allows us some flexibility is allocating a specific budget category to “fun money.” We each get to use this money as we wish, no questions asked.
How will I know if my spouse is committing financial infidelity?
One telltale sign of financial infidelity is when your spouse refuses to discuss or becomes defensive when you ask questions about your finances.
One of our readers reached out to us for some advice after he noticed some unusual behavior from his wife. She was going out with her friends much more frequently and coming home with a new shirt, a new pair of shoes, or makeup almost every time she left the house.
He was already feeling overwhelmed because they were struggling to make ends meet, and didn’t understand why she was willing to overspend (or how she was finding extra money) to make these expensive purchases.
When he mentioned his concern about their financial instability to his wife, she immediately became angry and defensive, saying that she works hard and deserves to “live a little.” What he later found out is that she was funneling her commission checks from work into a secret account.
Other signs of financial infidelity may include frequent arguments about money, discovering secret bank accounts or hidden debt, one partner solely handling finances and not allowing the other partner to be involved, or a change in spending habits.
Acting evasive or gaslighting are other telltale signs.
What to do if it happens to you
Approach your partner with a clear head and calm demeanor, and have a completely transparent discussion about your finances. Your partner needs to divulge anything and everything they have been hiding, and you should do your best to support them in any way you can.
You should do the same if you are the one doing it. Honesty is your only hope if you plan to fix things and overcome this. Don’t shy away from seeking professional help, either. Your relationship with your spouse should be a top priority for you.
Our views on money are defined from an early age, and there can be a lot of guilt attached. It’s important to understand that your financial standing has nothing to do with your character as a person. Being in debt doesn’t make you a bad person.
From this point forward, you must be a team when it comes to handling your finances. Set aside time to talk about your financial goals and work on creating a budget. If you recently uncovered any debt from your partner, budgeting will is key to paying it off as quickly.
A healthy relationship has many components, one of which is financial wellness. If you ignore this important topic, your relationship may suffer.
Ideally, these discussions will begin (and evolve) while you are still dating your significant other. Honesty is essential in a relationship. Being on the same page with your partner will prevent financial infidelity from making its way into your home.