Financial Infidelity – Why It Happens and How To Confront It

Have you ever hidden a purchase from your wife or husband?  Have you ever lied to your spouse about how much something really cost?  Maybe you shaved a few hundred dollars off of the price tag when you told her about it in order to spare yourself a fight.  Have you ever left a few zeros off when you confessed to how much credit card debt or new debt you really owe? 

Almost all of us have at one point or another been less than honest with our spouse about our individual or family financial situation.  According to a 2005 survey in Redbook magazine and in conjunction with HarrisInteractive research corporation, 29% of the survey’s 1,800 respondents admitted to having had lied to their partner about finances. Twenty-one percent lied about their personal spending and 12% fibbed on how much they spend on their children.  And, remember, this was before the recent recession. We can assume that the numbers may be even worse now.

In many ways, financial infidelity is just as painful for couples as cheating on a spouse with another person. 

Some reasons that financial infidelity may happen….

Fear.  A lot of people have grandiose dreams of living a great life they always thought that they would.  Everyone wants to be a rock star, writer, painter, backpack across Europe, etc., when they are young and dreaming, and many people have a mid-life crisis when they realize that they never even tried to accomplish their dreams.  Many people find themselves picking back up a hobby like painting, spending money on supplies that they don’t have budgeted, and over extending themselves.  A lot of people do not want to own up with how much these things cost to their spouses.  So, it either leads to financial infidelity or resentment.

Spending Problem.  Do you have a spending problem?  Are you a compulsive shopper?  An estimated 60 million Americans are compulsive shoppers who have a spending problem which many times excessive credit card debt and other problems.  Spending problems lead us to hide money or hide receipts from our loved ones.  We do not want to confess how much an item really cost.  Many times we cannot afford to keep up with our shopping addiction which compounds the problem as debts pile up.

Other Problems.  Many other problems bleed over into family finances causing financial infidelity.  Do you have a gambling problem? Alcohol problem? Drug problem?  These larger problems can result in hidden accounts, missing money from joint accounts, missing household items, etc.  Identifying these types of issues up front can help you understand where your problems begin.

Forgiveness is not very easy, but if you feel that your marriage is worth fighting for, you should make effort to forgive your spouse of their financial infidelity.  But, there are a few things that a couple can do to help begin the healing or prevent damage before it is done.

Regular Meetings.  Have a regular review meeting of the family’s financial committee (you and your spouse).  My wife and I sit down at least quarterly to see where we stand on certain goals and where our retirement accounts.  Make it a date night to look at your finances and discuss your goals with your loved one.  Without talking about goals, what you want to accomplish, why you want to save, when you want to retire, how you need to ratchet back spending, etc., you will never understand the other side’s point of view.  Men and women approach many topics from two different sides, and money matters are no different.  Talking out our difference will head off any ill feelings or problems well in advance.  You should write out every account and debt that you both own, including all of the secret ones.  Having your accounts and issues out in the open is the only way to deal with it and help the family. 

Spending Limit.  Set a dollar amount spending limit that each spouse can spend without having to ask permission or discuss it with the other one.  Many couples settle on the $100 limit and are free to spend up to that amount.  Any purchase over $100, such as a new television, should be talked about between the husband and wife.  My wife and I actually have a $200 limit or so before we bounce the idea off of each other.  As your financial situation and emergency fund improves, you can begin to slowly take more risks with your unaudited family spending limit.

Joint Accounts?  My wife and I have a joint bank account, but we do not use it.  Instead, we use my personal checking account to pay almost all of our monthly household bills, but she as 100% access to that account.  She knows all my passwords, and she even has a power of attorney in case she runs into any road blocks.  But, this is our system.  Everyone’s personal financial system is different.  Many people have a joint checking account for joint bills like the mortgage, etc.  A lot of people only have individual checking accounts, and that is where they begin to get into trouble with financial infidelity.  The most important thing for couples is to do what works for you.  If you are fighting about money all of the time, then what you are doing obviously is not working very well.  You should change what you are doing.  Find what works for you and do that!

Being open and honest with our loved ones will keep us out of the trouble of financial infidelity.  If the damage seems unfixable, you may want to consider talking to a counselor, a member of the clergy, or a trusted friend.  Many people run the risk of having their marriage stumble because they are not being faithful to one another with respect to money, hidden accounts and extra debt.  It does not have to be that way though.  Open and honest regular dialogue between the two parties about money matters can help.

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