How to Prevent Financial Infidelity from Damaging Your Marriage

Financial difficulties and lack of communication are both typical causes of problems in marriages and relationships in general. When those causes combine to result in "financial infidelity", the harm to a relationship can be difficult to overcome.

In general, financial infidelity involves one partner in a relationship spending, borrowing, withholding or hiding money and not telling the other partner. For example, a spouse may have a credit card or bank account that is only in that person's name and kept concealed from the other spouse. Financial infidelity can result if a spouse keeps the receipt of an inheritance a secret or takes out a loan without the other spouse's knowledge

Overspending to support a personal hobby can lead to financial infidelity. Similarly, a spouse secretly providing financial support to a child from a prior marriage or simply setting money aside in a personal account without telling the other spouse can lead to marital difficulties.

There are many reasons why a spouse might feel it necessary to conceal financial activities from the other. A person may feel shame from compulsive spending on gambling, alcohol, drugs or shopping in general. If a spouse is having an affair, financial infidelity is also likely involved to cover incidental expenses. Secrecy may simply be chosen to avoid an unwanted argument.

Financial infidelity is not uncommon among American couples, and it occurs in all age groups. A recent study found that 27% of the participants had kept a financial secret from their partner. More than 75% of the couples who reported financial infidelity stated it had harmed their relationships. 10% stated that the financial transgressions led to divorce. The results of this study, published by the Journal of Financial Therapy in 2018, also showed that men and women are equally likely to hide financial matters from a partner.

Financial infidelity often comes to light when there is an unexpected inability to meet household bills such as the monthly mortgage. Family stability can be jeopardized. When discovered by a spouse, financial secrecy will be felt as a substantial violation of trust. To make matters worse, the unknowing spouse may ultimately be held liable to repay a debt accrued by the financially unfaithful spouse, since debts acquired during a marriage are considered communal obligations in many states. 

There are numerous signs that can suggest financial infidelity. It might be something as simple as a spouse suddenly having a lot of new clothes, a new phone or expensive equipment to support a hobby. Cause for worry may exist if a spouse suddenly stops sharing bills and bank statements or has them sent to a post office box rather than the home address, or limits contact with the family's financial advisor.

Discovering that passwords have been changed on mutual financial accounts, that a spouse has opened a new account or that your spouse has removed you from an account without advising you are all red flags.

Other indicators include a spouse becoming obsessive about getting the mail first, bank account balances that suddenly seem lower than expected, or overly emotional reactions from a spouse when you want to discuss financial issues. If your spouse misrepresents personal financial issues in casual conversation with others, this may be a sign that you are being lied to as well.

None of these acts by themselves may warrant concern, but if several of them begin occurring at the same time, a bit of investigation may be justified.

Steps can be taken to prevent financial infidelity from occurring or to rebuild trust after secret financial misbehavior has been discovered.

The most effective way to prevent financial infidelity is to provide and expect full disclosure on money issues from the start. You don't need to provide financial spreadsheets on a first date, but once a decision is made to commit to a long-term relationship, partners or future spouses should disclose all current assets and debts.

This is particularly important for couples living together if one person has the primary responsibility to manage household finances. Couples should find time to review monthly income and expenses and to discuss short-term and long-term goals. You may find that your spouse has different plans for your future as a couple and that some adjustment is needed to get you both on the same path.

Create a household budget and stick to it. Spouses must have realistic expectations of what is affordable. This should include setting money aside for unexpected emergencies or mutual goals like building a college, retirement or vacation fund.

Consider having both joint and separate bank accounts. The ultimate exercise of trust is to have one joint bank account into which all income earned by either spouse is placed. All bills and expenses are then paid from that account.

Alternatively, spouses might create a joint account but also have separate personal accounts. After ensuring that mutual monthly obligations and needs can be covered from the joint account, an agreed-upon amount might be transferred to each spouse's separate account to be used for discretionary expenses as each chooses. These separate funds might be spent on hobbies, dining out with friends, clothing, gifts or impulse purchases.

Discovering financial infidelity does not mean the marriage is a lost cause, but it is a sign that, at the very least, your marriage needs work. In addition to financial difficulties that may have been created, trust has been lost and must be regained.

If you suspect a partner has been financially deceitful, raise your concerns without making accusations or expressing anger. Starting a conversation with accusations will not encourage the communication needed to address or solve the situation.

If you have not seen recent financial documents, ask your partner to produce bills, bank records, and investment statements. Obtain and review credit reports for yourself and your spouse and look for any new or unknown accounts and unusual activity. A personal review may ease your concerns. If you have a financial adviser, set up a meeting with that person and your spouse to review financial concerns.

Financial infidelity flourishes when one spouse essentially chooses not to be intimately involved in reviewing household finances. If financial shenanigans are suspected, a concerned spouse must take a more hands-on approach.

Seek counseling as a couple if you are unable to resolve issues. Having a third party to act as a sounding board, facilitate conversation and provide guidance may prove valuable.

Ultimately, you must forgive the financially unfaithful spouse to move on. While you may not be able to undo what has happened, you can exercise some control over the future. Your focus needs to be on how to move forward together and achieve mutual goals.

While financial infidelity can and has led to the termination of many marriages, relationships can survive if spouses make a mutual commitment to be honest and communicate. Frequently reviewing bills and financial statements together and having ongoing discussions about future goals are essential. When spouses are working together to achieve common objectives, marriages are strengthened and financial infidelity can be prevented. If you have any questions concerning financial infidelity and divorce, call the Law Offices of Peter Van Aulen at (201) 845-7400 for a free initial consultation.