Financial Infidelity: An Interesting Way To Ruin a Marriage

by Jerry Inglet, Ed.D., Certified Financial Therapist-Level I™ Practitioner

Is your marriage lacking financial trust? Take these steps to overcome financial infidelity together if it is happening in your marriage.

Some might experience this worry if they find out their spouse is frequently making Amazon purchases with an undisclosed credit card, having packages delivered to the office instead of the home. Or if passwords are changed on financial accounts without their knowledge. That contempt could broaden if their partner opens a digital currency account without their knowledge, or a pricey piece of artwork for the showroom of the family business is purchased without their consent.

Are these occurrences a measure of financial infidelity? Maybe. And if a spouse is fulfilling these acts, what other acts might the spouse engage in?

Financial Infidelity: A Precursor to Divorce

If this sounds potentially troubling, it might be.

A 2012 study by Britt and Huston revealed that financial tensions represent the third most argued topic that surfaces in any couple’s relationship. A 2022 US News and World Report article revealed that 30% of couples have demonstrated some form of financial infidelity, and in general, financial woes between couples are often a precursor to divorce.

What Is Financial Infidelity?

In its simplest definition, financial infidelity is defined as financial cheating where lies and intentional withholding of financial information from a spouse exists.

A more concise characterization from the work of Canale, Archuleta, and Klontz identifies the term ‘financial infidelity’ to “include any purposeful financial deceit between two or more individuals wherein, there is a stated or unstated belief in mutual and honest communication around financial matters.”

Other illustrations of this behavior are when:

• A spouse or partner is not truthful about debt, income, or wealth figures
• Significant gambling activities are not disclosed
• If successors, beneficiaries, or trustees are selected unilaterally and in opposition to what was collectively agreed upon
• An asset allocation of the couples’ joint investment portfolio is completely overhauled without the consent of one partner
• Substantial amounts of resources or support are provided to either young or adult children without disclosure to a spouse
• Employment or company bonuses or raises are undisclosed
• Sizable charitable donations are executed without joint input
• Something as simple as redeeming cashback awards from a credit card without informing the other party occurs

And there can be other possibilities – and the keyword here is possibilities. Because these occurrences are not necessarily definitive acts of financial infidelity – especially when one spouse has decided to stay clear of financial matters or if a couple practices an uneven scale of responsibility in relation to financial decisions. Either way, the family is vulnerable to degradation of trust if there is some form of dishonesty uncovered.

Preventing Financial Infidelity

Logic indicates that in most cases it is easier to exert preemptive energy to prevent something from happening rather than having to figure out how to stop something that is currently in motion, and this premise holds true for matters of financial infidelity.

There are measures and considerations to proactively minimize money fights by establishing financial guard rails that can save the day, save the finances, and save the marriage.

Frequent Money Talks

Establishing a cadence and rhythm of talking about money early in a relationship. Even though money discussions for many are uncomfortable, the act of discourse is the first line of defense.

Steady discussions that cover budgets, goals, and resource intentions can reveal intent, inconsistencies, and alignment. These micro revelations on money and wealth, when exchanged by each partner (and in certain circumstances) coinciding with a prenup or trust structure, can keep disagreements minimized since they are transparent and in the moment. The immediacy of the shared money revelations and associated discussion can go a long way in preventing these matters from magnifying, which is a possibility when they are ignored and left idle.

If these conversations seem forced or too uncomfortable, consider entering this space by using financially themed diagnostic tools from time to time to improve familiarity. Some examples of these vehicles include the University of Missouri Investment Risk Tolerance Questionnaire or the Klontz Money Script Inventory.

These and others allow a couple to initiate a conversation about money without necessarily talking specifically about THEIR money. Like any diagnostic tool or assessment, much of the value for the couple is derived from the conversation it manufactures about money and resources as opposed to focusing entirely on what the diagnostic reveals about each individual.

Related: 6 Steps to a Successful Money Talk with Your Mate

Set Spending Limits

As another tactical consideration, spouses can also consent to certain spending limits per month or per year with no questions asked. Splurging on a $100 dollar lunch without telling your partner does not necessarily mean that you have committed an act of financial infidelity (there is a distinction between privacy and secrecy).

Instead, agreed-upon financial liberties that are not counterintuitive to the overall values of the family can promote freedom and strength and can help maintain an overall healthy relationship.

Related: The Mom and Dad Monthly Allowance

Promote Financial Literacy

One additional anticipatory thought centers on measures of financial literacy. Regardless of the wealth or income circumstance of the couple, an ever-growing and equal understanding of financial concepts can only amount to greater marital satisfaction when considering the complexities that could arise around the topic of money.

Related: A Financial Literacy Test: How Knowledgeable Are You?

Signs of Financial Infidelity

Many times, though, these precursor items are not employed and one spouse or both are engaged in practices of financial infidelity. So what are some signals that this practice is taking place, and what methodologies are utilized to uncover the reality?

The most tale-tell proof can be found with a review of a credit report or court record search that details bankruptcy filings, but there are also more subtle signs and indications that can include moments where:

• A spouse implies that a new purchase of an item was actually purchased previously
• A partner knowingly misrepresents the cost attached to a specific purchase
• The spouse shuts down and demonstrates a reluctance and paranoia to discuss any financial matters
• A partner is pushing for more unliteral control over financial decisions or the unilateral appointment of financial advisors

Dealing With Financial Infidelity

These behaviors and others, although not absolute indicators of financial infidelity, can serve as a marker that there could be some concern. And when concerns transition into revelations that financial infidelity does exist, couples can consider a few courses of action:

1. Start with transparency and truth, as much as it hurts, even if it will uncover significant blunders.
2. Level financial responsibilities so that they are more shared. When accompanied with financial literacy, shared responsibilities can improve methods of disclosure that can drive trust.
3. For the role of the offended spouse, consider taking time to understand the psychological root of your partner’s financial indiscretion. This will often require a deeper dive into the spouse’s family roots with money, Building and reviewing a family money genogram can bring this conversation to life.
4. Lean upon a qualified third-party facilitator to create a healthy momentum.

Ernest Hemingway once stated that “the best way to find out if you can trust somebody is to trust them” and with some of these preemptive and remediated practices, hopefully this is the case for you and your partner.

References:

• Britt, S. L., & Huston, S. J. (2012). The role of money arguments in marriage. Journal of family and Economic Issues, 33(4), 464-476.
• Klontz, B. T., Britt, S. L., & Archuleta, K. L. (Eds.). (2015). Financial therapy: Theory, research, and practice. Cham, Switzerland: Springer International Publishing.

Related:

• Is Your Spouse Financially Unfaithful?
• 4 Tools to Make Couples Money Talks Easier
• How Couples Can Avoid Financial Fights
• Dealing with Secret Credit Card Debt

Reviewed April 2022