Julia has a secret credit card that she hides from her husband, Carlos. Whenever she goes out for a little retail therapy, she uses that card and has the bill sent to her office. That way, she doesn’t have to listen to any lectures from him about how much she’s spending. She figures what he doesn’t know can’t hurt him.
She’s wrong.
Keeping money secrets from your partner, like Julia’s secret shopping, is called financial infidelity. And according to experts, it can cause just as much harm in a marriage as cheating on your spouse. When lies about money come to light – as they tend to do sooner or later – they often lead to arguments over money, loss of trust, and even divorce.
Understanding Financial Infidelity
Julia is a fictional character, but the kind of deception her story illustrates is both real and widespread. About one in six Americans admit they’re not always honest about money with their significant others, while about one in four say they don’t think their partners were always honest with them.
A survey by the National Endowment for Financial Education (NEFE) is even grimmer. It finds roughly two in five respondents saying they’d lied about money or hidden financial details from a spouse or partner with whom they shared their finances.
Financial infidelity can simmer for years before coming to a head. Often, the other spouse finds out about the problem only when it’s no longer possible to conceal – when debt collectors come calling or when the high-spending spouse seeks professional help to reduce their debts. Debt relief programs like those offered by Accredited Debt Relief are often favorable alternatives to bankruptcy, but they still take time and can temporarily lower both partners’ credit scores.
So it’s best to deal with financial infidelity before it causes serious financial problems within the household, let alone marital strain. That means understanding how to recognize financial infidelity in its early stages, understand why it occurs, and take steps to work it out.
Types of Financial Infidelity
Financial infidelity takes many forms, some more serious than others. Here are some of the things people admit to deceiving their partners about.
1. Spending in Secret
Perhaps the most common form of financial infidelity is lying about or covering up spending. In the NEFE survey, 22% of respondents said they had hidden a minor purchase from their partners, and 7% had hidden a major purchase. In addition, 12% of respondents had hidden a bill or bank statement so their partners wouldn’t see how much they’d spent.
In surveys, roughly one in four married people admit to spending money they don’t want their spouses to know about. The types of purchases they’re most likely to conceal differed for men and women. Husbands are more likely to hide spending on electronics or hobbies, while wives typically conceal purchases of clothing, shoes, and gifts for friends and family.
Here are a few other ways partners can lie to each other about spending:
- Rounding down. You pick up a cool new toy at the mall for $65. When your spouse wants to know how much it cost, you hastily round the price down to $60 or even $50 so it won’t seem too extravagant. A difference of $5 or $15 doesn’t seem like much, but when you do it repeatedly, those little changes can add up to a big gap in your household budget.
- Covering up missed payments. Your partner asks if you paid this month’s electric bill. Actually, you forgot to, but instead of ‘fessing up, you say, “Of course” and then rush to the computer to pay it before you get caught. The problem is that a late payment could damage your credit rating – and your spouse’s if you share the account. This is one of many reasons why autopay is so useful.
- Hiding the bill. Your credit card bill arrives, and there’s a big expense on it that you know your spouse will flip out about. Rather than get into a fight, you quietly hide the bill in a drawer (or delete the email). The big danger here is that you could forget to pay it. But even if you remember, that’s still money coming out of your joint bank account. You can conceal the expense temporarily, but sooner or later, your spouse is going to wonder where that money went.
2. Concealing Debt
A less common, but more serious, form of financial infidelity is hiding debt from your partner. According to an informal survey conducted by NBC News, more than one in four Americans have taken on some amount of debt without telling their partners.
In some cases, secret debt can amount to tens of thousands of dollars. For instance, in an interview with CNBC, financial advisor Neal Van Zutphen describes meeting with a couple and learning, as he examined their finances, that the husband had accumulated more than $60,000 worth of credit card debt without telling his wife. The money had gone to supplement the household finances and pay a business consultant while the husband was going through a job change.
Similarly, credit counselor Paula Langguth Ryan told CreditCards.com about a client of hers who put $82,000 on his credit cards while trying to save his family business. Massive debts like these can stay hidden for years, only coming out into the open when the debt-ridden spouse can no longer find a way to make ends meet. By that point, of course, paying off the credit card debt is a much bigger challenge.
3. Lying About Income
A surprisingly large number of people lie to their partners about how much money they make. According to a survey by Safe Home, roughly 13% of men and 15% of women admit to deceiving their partners about earnings.
People can lie about their income in either direction. Some hide a high income from their spouses for fear their spouses will spend it all, while others exaggerate a low income because they’re embarrassed to have their spouses know how little they really make.
Lawyer Nancy Chemtob told Forbes the most extreme case of this she ever encountered was a woman who lied to her future husband on their very first date, saying she had a professional degree and a salaried job when she was actually unemployed. Throughout their whole marriage, she left the house every day at the same time he did under the guise of going to a job she didn’t have. When her husband finally found out the truth, he immediately filed for divorce.
4. Hiding Accounts
Fewer than 10% of couples living together have a partner with a secret bank account. But for couples who don’t live together, this number is significantly higher. CreditCards.com finds that among all couples in relationships – including both couples who shared a home and those who lived apart – 23% had accounts their partners didn’t know about, with those living apart skewing the figure upwards.
Who Commits Financial Infidelity?
According to Chemtob, financial infidelity is a problem at all income levels. Wealthy people are just as likely to hide money matters from their partners as those living on a shoestring budget. The rich simply come up with more elaborate schemes for hiding their money.
For instance, one woman told her husband she wasn’t receiving child support for her son from a previous marriage so he would cover the boy’s expenses, allowing her to stash $7,000 a month in a secret account.
Differences by Gender
Both men and women commit financial infidelity, but it appears to be slightly more common among men. In the NEFE survey, 46% of men admitted to deceiving their partners about money in some way, compared to 38% of women. Men and women were equally likely to hide minor purchases from their partners, but men were nearly twice as likely to hide major ones and to lie about their earnings.
There is one exception to this rule: lying about debt. The NEFE survey found that women were slightly more likely than men to lie about the amount of debt they have. Safe Home found the same thing; nearly 20% of women admitted to lying to their partners about debt, while only about 10% of men said the same.
One possible reason for these differences is that men and women tend to have different attitudes about spending. A CreditCards.com survey finds that 31% of men say they wouldn’t care if their partners spent $500 or more without telling them, while only 18% of women say the same. So men who conceal major purchases from their spouses may not consider themselves to be cheating, even if their partners do.
Differences by Age
Younger couples are more likely to hide details about money from each other than older ones. According to CreditCards.com, roughly one out of four people between 18 and 29 years old say they’d kept a large purchase a secret, while only 15% of those aged 65 and up say the same. People under 50 are nearly twice as likely to have a secret account as people over 64.
The NEFE survey found slightly different results; men under 35 years old were the most likely to commit financial infidelity. Of these men, nearly three out of four said they had lied about or hidden financial details from a partner. This percentage dropped to 57% for men aged 35 to 44 and 35% for men over 44.
For women, however, financial infidelity peaked at a slightly later age. Just under half of women under 35 admitted to financial infidelity, but the number climbed to 55% for women aged 35 to 44. The percentage fell off more gradually among older women, declining to 41%, 35%, and finally 22% with each additional decade.
Reasons for Financial Infidelity
People keep financial secrets from their partners for a variety of reasons. Most often, they’re simply trying to avoid getting into a fight over money. Sometimes, however, concealing money matters can be a symptom of a deeper problem in the relationship, such as fear or lack of trust. In other cases, the spouse who hides money is doing so to cover up something else, such as addiction or an extramarital affair.
1. Conflicting Goals
The most common reason people give for keeping money secrets from their partners is to avoid conflict. Over 40% of respondents in the Safe Home survey said their main reason for lying about finances was “fear of starting an argument.” In the NEFE survey, 30% of respondents said they didn’t tell their partners about something because they “had discussed finances with their spouse/partner and they knew they would disapprove.” Another 15% said they hadn’t discussed finances but still feared their partners would disapprove.
On the face of it, trying to avoid a fight with your partner seems like an innocuous reason for a lie. However, the fact that you have to lie to avoid a fight is a sign that somewhere, there’s a basic conflict between the two of you over how you use money.
Sonya Britt-Lutter tells CreditCards.com that this kind of money behavior often “boils down to a difference in values” between partners. For instance, perhaps one spouse wants to keep spending lots of money on clothes or dining out the way they did when they were single, while the other wants to save every spare penny for a down payment on a house. Maybe the spending spouse doesn’t really want to buy a house yet, or they simply don’t want to give up their clothing budget for it.
The best way to avoid fighting about money in this case would be for the two partners to sit down and talk about their priorities. They could then work out a compromise that would allow them both to put some money toward what they want most.
However, sometimes a talk like this seems so overwhelming that the spending spouse decides to dodge the issue by spending as usual without telling their partner. They hide their new purchases in the back of the closet or fib about how much they spent on them.
That puts off the conflict for a little while, but sooner or later, the saving spouse is bound to notice there’s much less money left at the end of the month than there should be. The spending spouse ends up in hot water not just for frittering away their money, but also for lying about it.
2. Embarrassment or Guilt
In other cases, partners do share the same values when it comes to money, but one partner is much better than the other at living up to those values. For instance, maybe both partners have agreed that they want to buy a house, but one of them is having trouble sticking to this goal. This partner keeps blowing the money they should be saving for a down payment on impulse buys like a new pair of shoes or a set of golf clubs. Afterward, they feel ashamed of their irresponsible spending, so they conceal the purchases from their partner.
Guilt or embarrassment can also lead to more extreme forms of money deception, such as covering up debt. If you’ve racked up thousands of dollars in credit card debt for purchases you now see as pointless, it’s embarrassing to admit this behavior to a partner or potential partner. It’s even worse when you know your reckless spending in the past is holding you and your partner back from reaching your shared goals for the future. This embarrassment turns to guilt, making it even harder to own up to your mistakes.
This type of money deception isn’t as prevalent as simple conflict avoidance, but it’s still fairly common. In the NEFE survey, about one in four respondents said they had hidden money matters from a partner because they were “embarrassed or fearful” about their finances.
3. Addiction
Sometimes, the reason one partner fears that the other won’t approve of their spending isn’t the amount of money involved; it’s what they spent that money on. People may hide their spending because they’re trying to cover up a costly bad habit, such as excessive drinking, gambling, drug use, or a shopping addiction. A gambling addict, for instance, could sit up all night playing online poker with a secret credit card, while a shopping addict may smuggle home new purchases concealed at the bottom of a bag of groceries or get them delivered to their office instead of the home.
Of course, hiding a problem doesn’t stop it from being a problem. In fact, it often makes matters worse by stacking debt and deception on top of the physical, mental, and emotional toll of addiction. In “How to Sleep Alone in a King-Size Bed,” Theo Pauline Nestor writes about discovering that her husband had been gambling in secret for years and had accumulated thousands of dollars in debt. Devastated by the years of lies and terrified of losing her house, she divorced him, all over a problem they might have been able to work through if he’d told her about it sooner.
In other cases, it’s not the addict but their partner who ends up committing financial infidelity. The spouse of a drug or gambling addict sometimes hides income in a secret account to keep it out of the hands of the addicted partner. They fear, sometimes with good reason, that if they don’t keep this money hidden, their spouse will take it all to feed their addiction.
4. Resentment
Financial infidelity can also be a symptom of distrust and resentment in a relationship. It often stems from income inequality in a marriage – that is, one spouse earning much more money than the other. Sometimes, the spouse who earns more resents having to foot the bills for the other one, especially for things the higher earner considers luxuries rather than necessities. This resentment can lead the higher-earning spouse to spend money in secret in an attempt to “even the score.”
In other cases, it’s the lower-earning spouse who feels resentful because the higher earner is too controlling. The higher earner thinks that making more money gives them the right to make all the decisions about spending it, forcing the lower-earning spouse to account for every penny they spend and taking them to task for any expense the higher earner considers too frivolous. The lower earner gets back at them by finding sneaky ways to hide spending, such as saying the money they spent on a salon visit went to pay the gas bill.
In other cases, partners engage in “revenge spending” over things that have nothing to do with money. For instance, if you’re mad at your spouse over a past affair or dissatisfied with your sex life, you could spend money in secret as a way of getting back at them.
Whatever the cause, revenge spending is a sign of an unhealthy dynamic in the relationship. To address this kind of financial infidelity, both partners need to get their feelings out into the open, perhaps with the help of a couples therapist, to root out what’s really causing problems in the relationship and how to address them.
5. Affairs
In some cases, financial infidelity and sexual infidelity go hand in hand. People who are cheating on their spouses usually try to cover up evidence of the affair, and that means hiding telltale expenses such as hotel bills, gifts, and travel. They may try to pass off these costs as business expenses or open a secret account to keep them hidden.
In the case of the super-rich, spending on affairs can be incredibly extravagant. Chemtob relates the story of a hedge fund manager who kept a mistress for five years and spent over $20,000 a month on her. He bought her a house, a car, and lots of expensive jewelry, ultimately adding up to millions of dollars – all without his wife’s knowledge.
An affair can also lead to financial infidelity if one partner starts contemplating divorce. For instance, a husband who intends to leave his wife for his mistress might plan ahead by opening a secret account and stashing a portion of his income there. That way, his wife won’t know about those assets, so she won’t try to seize them in the divorce settlement.
6. Fear
Perhaps the most serious reason couples conceal money matters from each other is out of genuine fear. For instance, a wife could hide her spending from an abusive husband for fear that he will hit her. However, fear of a partner’s reaction doesn’t always mean fear of direct physical harm. For instance, a husband who has lost his job could go to great lengths to hide that fact from his wife, fearing that she’ll leave him if she finds out.
No matter the reason for it, fear is always a sign that there’s something seriously wrong with the relationship. It shows that, deep down, you don’t trust your partner to treat you decently. Couples in this situation need counseling to deal with both the financial infidelity and the fear and distrust behind it.
Problems Caused by Financial Infidelity
Financial infidelity can be just as harmful to a relationship as sexual infidelity, if not more so. In the NEFE survey, 38% of respondents said they’d had a fight over financial deception in a relationship. Nearly 30% said financial infidelity had damaged trust in the relationship, and 25% said it had led to separation or divorce. In the 2018 CreditCards.com survey, 31% of respondents said financial infidelity was worse than having an affair.
Financial infidelity hurts couples in two ways. The first casualty is trust. In a relationship, people have to be able to count on each other, and that’s not possible when one partner is lying or hiding important information from the other.
Dishonesty is a problem that cuts both ways. When you hide financial matters from your partner, you’re showing that, on some level, you don’t trust them enough to be honest with them. Sooner or later, the deception is bound to come out, and when it does, your partner won’t trust you, either.
Second, when the deception has to do with money, it has financial consequences of its own. Even minor deceptions, like a few secret purchases, can cause your household budget to fail. When you’re trying to get by on a tight budget, it’s important to know exactly where every dollar is going, and there’s no way to do that when one partner is making secret purchases.
Larger-scale deceptions, like secret accounts, can get a couple into even deeper trouble. For instance, if one partner has accumulated large amounts of debt without telling the other, you might have to cash out or borrow from a 401k to pay for it, sacrificing your chances of a comfortable and happy retirement.
The damage done by a financially unfaithful spouse can persist even if the marriage ends. Ryan relates the story of a client whose husband damaged her credit rating by opening several secret credit card accounts in her name as well as his own.
Nestor, the financial infidelity victim who turned her experience into a book, told Forbes that learning about her husband’s gambling debts “felt like finding out about an affair,” but in the long run, it was actually worse. When a spouse cheats on you, you can always walk away from the marriage and get on with your life. But with financial infidelity, Nestor says, “you have to live with the effects for however long it takes to dig out of the hole.”
Preventing Financial Infidelity
The best way to keep financial infidelity from harming your relationship is to put a stop to it before it starts. Here’s what experts recommend to keep both your relationship and your bank balance healthy.
1. Communicate
Experts agree that the key to avoiding fights about money is clear communication. Newly married couples should sit down and talk out all the details of their financial life, from bank accounts to long-term financial goals. In fact, many experts, including Britt-Lutter and Ted Beck, head of the NEFE, say the best time to have the money talk is before you’re married or even living together. That way, you can be sure you agree on your basic priorities – what you want to spend money on and what you want to save for – before you combine your finances.
An important part of this process is to set up a household budget together. Look at how much money you earn between the two of you, then work together to set targets for how much you want to spend on rent, food, and other basic needs. Also, decide how much you want to set aside each month in savings to put toward your long-term goals. Making your budget together ensures that you both know where you stand financially and helps you stay on track toward your goals.
After you’ve had that one big “money talk,” don’t assume the conversation is over. Your financial situation can change over time, and so can your goals, so to make sure you stay on the same page, continue to discuss your finances regularly. You can schedule a weekly “money meeting” to go over your finances or bring up the topic on an ad hoc basis whenever there’s a change in your situation. That way, you’ll be making your financial decisions as a team.
2. Share Responsibility
Another tip experts offer is to make sure both partners are involved in taking care of their joint finances. That way, they both stay aware of how much money they have, where it comes from, and how they’re spending it.
Sharing responsibility doesn’t necessarily mean you have to merge all of your accounts. Experts offer several other ways to keep both partners involved:
- Share account information. If you don’t share a bank account, you can still share bank account information. That way, both partners can keep track of all the money that comes in and goes out. You can do this by giving your partner the password to your online bank account or by using a service like YNAB (You Need A Budget), which tracks financial transactions for you. Giving your partner access to your banking information is proof that you trust them and that they can trust you.
- Use alerts. Another way to keep your partner in the loop is to set up alerts on your online bank account. That way, both partners will be notified whenever there’s any unusual activity, such as a withdrawal or deposit that’s over a certain amount. Not only does this allow you to keep an eye on each other’s spending, it makes it easier to catch bogus transactions and prevent identity theft.
- Pay bills jointly. When the household bills come in, keep both partners involved in paying them. This guarantees that both of you will get a chance to look at the bills and see if they raise any red flags. You can set aside a weekly “bill night” to sit down and go through all the bills together, or you can take turns paying them each month. You can also have one partner be in charge of paying the bills but have them write down the amount of each one somewhere both partners can see it, such as a family bulletin board.
- Allow some individual spending. Several experts agree that it’s important for both partners in a couple to have some money of their own to spend. That way, they don’t have to argue over every single purchase. One way to do this is to set up three accounts: “yours,” “mine,” and “ours.” Each partner can spend freely out of their own account, while the joint account is for handling shared household expenses. If you prefer to share all of your accounts, you can add a couple of lines to the household budget for “mad money” for each partner. This is a specific sum that you can spend each month on whatever you like, no questions asked.
3. Address Problems
Even if you’re completely honest with each other about your finances, there’s no guarantee that you’ll never run into money trouble. Problems like a job loss, high medical bills, or other unexpected expenses can happen to anyone.
The good news is that, when your finances are an open book, it’s much easier to deal with problems like these together. Instead of making your problems worse by trying to hide them from each other, you can face them head-on and deal with them right away. The sooner you tackle small problems, such as a gap in your budget or an unpaid balance on your credit cards, the easier it is to keep them from turning into big problems.
Dealing With Financial Infidelity
Recovering from financial infidelity takes a lot of work from both partners. However, if you’re truly committed to each other, it is possible to get through it. Here’s what experts recommend to help couples rebuild trust and perhaps even come out stronger than before.
1. Admit the Problem
There are several warning signs that a partner could be cheating on you financially. You might discover a receipt or a bill for a purchase you didn’t know about, or you might notice that bills and bank statements are disappearing from the mail. Your partner’s behavior can also tip you off. Some people become defensive and reluctant to talk about money, while others suddenly start spending a lot more or a lot less.
If you suspect your partner of financial infidelity, start by gathering the evidence you’ve found and showing it to your partner. Try to do this in a way that doesn’t sound like a personal attack, which could cause your partner to panic and deny everything. Instead, say you’re worried and just want to understand what’s going on and why. Approaching the problem with concern, rather than anger, is the best way to get at the truth.
If you’re the partner who’s cheating, you have to own up to your mistakes – and the sooner, the better. Yes, your partner will probably to be angry with you, but the longer you cover up the problem, the madder they’ll be when they find out.
Choose a moment when you and your partner are both calm and non-stressed to bring up the problem. Come clean about what you’ve done just as you would about an affair. Instead of trying to justify or make light of your indiscretions, make it clear that you take them seriously and you want to do whatever it takes to win back your partner’s trust.
2. Understand the Root Cause
Financial infidelity is often a symptom of a problem somewhere else in the relationship. Sometimes, the cheating partner hides money because they feel the other partner is irresponsible. Sometimes, they’re trying to break free of a partner who’s too controlling. Maybe you and your partner don’t share the same financial goals, or maybe one of you is battling a more serious problem, such as addiction.
Uncovering and dealing with the problems that led to the infidelity is just as important as dealing with the results. If you don’t address the root cause, it will only lead to further problems down the road. So, when you have “the talk” with your partner, do your best to get all these problems out into the open. Then you can look for ways to address all of your issues – personal and financial.
3. Seek Professional Help
Sometimes, the reasons behind financial infidelity aren’t obvious. In these cases, talking to a counselor, by yourself or as a couple, can help you get to the root of your behavior and figure out how to deal with it.
Which type of counselor you need depends on what you believe is behind the problem. A couples therapist or marriage counselor can help you deal with problems in the relationship itself, such as different values or a power imbalance.
Other problems have more to do with the cheating partner’s own attitudes and beliefs about money. Seeing an individual therapist can help the cheating partner uncover deep-seated issues, possibly dating back to childhood, which affect their finances. If the cheating arose out of an addiction, such as a shopping or gambling addiction, it’s best to see a doctor or therapist who specializes in dealing with this type of issue. Support groups can also help with this problem.
Professional help can be useful for dealing with the financial effects of cheating too. For instance, if one partner has piled up a lot of credit card debt, a credit counselor can help you work out a plan for paying it off. Other types of financial professionals who could help you recover include financial planners and money coaches. They can educate you about how to manage your money better in the future so you don’t make the same mistakes again.
4. Rebuild Trust
Financial infidelity is, in essence, a breach of trust between partners, and a key part of recovery is finding a way to restore that trust. Experts say that one important step is to be completely open about your finances from now on. Allow your partner to examine every receipt, credit card statement, and bank statement at any time.
Another thing that can help is working out an agreement with your partner about exactly what is and isn’t acceptable. For instance, you could agree not to make any purchases over a certain dollar amount without discussing them with each other. You could also promise to hold all of your accounts jointly from now on or to consult each other before opening a new account. Put your agreement in writing so that both of you are completely clear on what it requires.
No matter what steps you take, it will take some time for the relationship to return to normal. The cheating partner will need time to change their harmful money habits, and the victim will need time to learn to trust them again. Be as patient as you can with each other and give your new financial habits time to work.
Final Word
Financial infidelity isn’t always clear-cut. Sometimes, partners simply don’t agree on how much of their financial lives should be open to each other. For instance, one partner may think they should always consult each other before making any purchase over, say, $100, while the other sees no problem with spending $500 or more without telling each other. Or maybe one partner thinks the couple should share all their money equally, while the other believes it’s important for each of them to have some accounts of their own.
Experts stress that there’s nothing wrong with keeping some money matters private, as long as that’s what both partners want. That’s why it’s important to talk openly with your partner about your money, including your financial goals, your budget, and how you expect to divide up your income and expenses. When you’re both clear on what you expect from each other, you’re less likely to fall into the habit of keeping little money secrets that can turn into big ones down the road.
