Financial dishonesty, (otherwise known as financial infidelity), is the act of falsifying details or omitting financial facts from your spouse or partner. Financial indiscretions can include spending money, opening accounts, borrowing money or incurring debt without your spouse’s knowledge.
Have you ever kept financial secrets from your significant other? Have you hidden purchases or lied about the current state of your finances? If so, you aren’t alone.
According to the 2018 National Endowment for Financial Education survey, 41% of respondents admitted to committing financial deception against a loved one.
Here are a few statistical details from that survey:
- Over a third (37%) hid a purchase/bank account/statement/bill/cash from a partner/spouse
- 21% hid cash from a spouse/partner
- 20% hid a minor purchase from a spouse/partner
- 12% hid a statement/bill from a spouse/partner
- 6% hid a bank account from a spouse/partner
- 5% hid a major purchase from a spouse/partner
- Nearly one in five (18%) lied about finances/debt to a partner/spouse
- 13% lied to spouse/partner about something related to finances
- 7% lied to spouse/partner about the amount of debt they owe(d)
- 5% lied to spouse/partner about how much money they earn(ed)
Lying to Your Spouse About Money
Financial indiscretions like secretly gambling or spending money on guilty pleasures are quite obvious, but what about those little white money lies?
I know wives who regularly hide purchases from their husbands. They keep bags in the car and sneak them into the house when their spouses aren’t home. One of my friends consistently tells her husband, “Oh this isn’t new. I’ve just never worn it before.” Of course it isn’t true. The clothes are all brand new.
My friend hides those purchases because she knows they are hurting her finances. Her family is currently digging out of debt and she fears being viewed as a selfish wife who cares more about her own needs than the needs of her family.
But spenders aren’t the only ones who lie to their spouses.
Years ago a friend of mine hid a large bonus from her significant other. She wanted to build up her savings account. Her husband wanted to spend the money on an expensive vacation. When the new year rolled around she told her spouse she didn’t receive the bonus she was expecting. “If he doesn’t know about it then I can save the money in peace,” she told me.
Financial Privacy in Marriage
“Why does my husband lie to me about money?” a friend recently asked. “Why can’t he be honest about where he spends money and how much he spends. He is constantly maxing out his credit cards, but I don’t have access to his account so I have no idea how much he owes.”
“Why don’t you ask to see his statements?” another friend asked.
“Because they aren’t my credit cards,” she said. “He doesn’t ask to see my bills so I don’t think he should show me his.”
This isn’t unusual. Many spouses believe some aspects of their finances should remain private. In fact, according to the NEFE survey 36% of respondents keep financial details to themselves.
Should we consider it financial deception if both parties agree to keep some facts private? Not necessarily. Financial infidelity typically involves spending choices that impact shared goals.
Will your credit card bills prevent you from paying the mortgage or utilities? Will your debt stop you from taking your family vacation or renovating your home?
If your financial decisions strain your spouses’s financial planning or burden them with debt you have definitely crossed the line into financial infidelity.
Hiding or Lying to Avoid Marital Conflict
While some partners choose to hide their financial facts for privacy reasons others do so to avoid conflict. In many cases partners act dishonestly because they believe their partners will disapprove of how they spend their money.
Hiding shopping bags and shredding bank statements may feel easier than arguing about money. Especially if you’ve fought with your spouse about these same purchases before.
Other reasons include feeling embarrassed or fearful about your finances. Some people believe they can dig out of debt before their spouses find out about their financial indiscretions.
People often believe they can correct the error before their spouse ever finds out. Unfortunately, this rarely occurs. More often than not an underlying behavior continues and the debt grows.
Preventing Financial Dishonesty in Marriage
So how can we avoid financial dishonesty in the first place? How can two partners work together to create a unified financial front that doesn’t lead to lying or hiding?
Set Spending Thresholds
First, set ground rules. Decide upon a set amount of money each spouse can spend freely each month. Also decide how much money you can spend without asking your partner first. For some spouses that may be anything over $100. For others it will be upwards of $500. Define the amount and agree upon it together.
Then spend that money without asking permission or making sure the other spouse is onboard. If you like to buy clothes you can spend your allotment on that. If your spouse likes to buy electronics that’s fine too.
Stick to your budget, but also set aside time to reassess your spending habits after six months. Make sure the numbers are working for you.
Define Joint Goals
Don’t talk about these thresholds as spending limits. Instead, focus on the importance of individual expenses alongside joint goals.
Say you want to go on vacation next month. How much will you need to pay for airfare and hotels. Do you want to renovate the house. How much will you need to pay the contractors?
Talk about all of the amazing activities you want to experience together. This should include saving in your retirement funds.
Resentment breeds when one spouse feels like the other is putting his or her needs above joint goals. This leads a wife to say, “my husband is acting selfishly” or a partner to become disgusted by a spouses’s self-serving manner. The key to a solid financial partnership is defining your goals together.
This doesn’t mean you cannot pursue your own interests. You can certainly still do that. You just have to keep your joint goals in mind too.
Discuss Your Finances in Detail
After defining your goals sit down to discuss your finances. Make sure both partners are aware of your overall net worth, your monthly income after tax and your monthly expenses. It’s important that both partners are aware of all high-level financial figures.
Sometimes money is tight but only one partner in the relationship truly understands that fact: the one paying the bills. Make certain the other partner is aware too.
Share in financial responsibilities like paying the bills, reconciling bank accounts and creating a monthly budget. To prevent or stop financial dishonesty you have to make sure you are on the same financial page. That begins by having a detailed picture of your current financial state and where you want to go in the future.
Define Relationship Dealbreakers
Create a list of relationship dealbreakers: a set of rules that cannot be broken. For example, neither spouse can open a credit card or bank account without the other one’s knowledge. It’s best to set these boundaries early on in your relationship.
It’s important to discuss the financial indiscretions that would cause you to rethink your relationship or leave your marriage.
Discuss Personality Differences
Many financial conflicts arise when two people come from different money mindsets. Think about a spender married to a saver. The spender may feel unfairly restricted by a saver who wants to limit purchases on their credit card bills. The saver might feel agitated by a spender who cannot reign in their expenses.
In order to work through these issues you have to discuss your money mindsets, which explain why you want to spend and save. The saver may crave security while the spender craves excitement. It’s important to discuss these ideas so you can compromise on a budget that works for both of you.
If you don’t you will become irritated and resentful of your partner’s actions.
My Own Financial Indiscretions
Over a decade ago I used a private PayPal account to hide purchases from my husband. Back then I used shopping as a way to distract myself from my health issues. I would go to the store and wander the aisles for an hour each day.
My goal was to get out of my house and think about anything other than my physical pain for awhile. More often than not I ended up buying something while I was there.
Minutes after I got home I would feel disappointed by my purchases and days later I would return them to the store. This cycle continued over and over.
We journal each and every credit card transaction in gnu-cash and my husband hated entering line after line of purchases just to enter the returns a few lines later.
I began using PayPal so I could take these transactions off the books. He didn’t know I bought the stuff or that I returned it. At the time I was really proud of working around my husband.
What he didn’t know wouldn’t hurt him, right? Right. In fact, when I confessed about my secret account he was thrilled that I removed his need to journal those transactions.
Unhealthy Financial Indiscretions
My actions didn’t harm our finances, but they were still unhealthy. The act of continually returning items wasn’t helping me feel better. In fact, in some ways it was making me feel worse about myself.
Buying and returning was simply a waste of time. It was a means to avoid dealing with the emotional pain of my health.
Sometimes we hide our financial indiscretions because we know they aren’t good for us. My secret PayPal account didn’t destroy my marriage, but it did make me question why I wanted to hide my purchases in the first place.
I was bothered by my own behavior. Eventually I found better ways to heal my mind and body that had absolutely nothing to do with shopping. As soon as I did I stopped buying and returning stuff.
It’s Not Always Easy
Unfortunately, not all financial indiscretions are as minor and innocent as this one. Sometimes financial infidelity is used to cover up marital infidelity. Other times personal credit cards are opened to help addicts gamble or buy alcohol or drugs.
These situations are much more complex and often involve highly trained counselors who can help you. Remember that some problems cannot be solved without outside assistance.
The Importance of Honesty
Money is the leading cause of stress in relationships. It’s the number one reason couples fight and the second leading cause of divorce. It makes sense that some spouses hide purchases and accounts in order to avoid conflict, but in the end this doesn’t solve any issues it simply covers them up.
If you want to improve your marriage and your finances you’ll need to start talking openly about your finances.
Discuss your hopes, fears and goals for your money. Then figure out how you can support one another to accomplish those goals.
Imagine how amazing it will feel to stop fighting about money and to stop feeling guilty or angry for the way it’s being handled.