What is financial infidelity?
Financial infidelity is what happens when one partner in a relationship is less than honest about their finances with the other person. When you commit financial infidelities, you hide accounts or credit cards, take out hidden assets in your own name, or attempt to keep important financial issues from your partner. When your partner knows about separate accounts, that’s fine. It’s the continuing dishonesty that starts to become a problem.
This kind of dishonesty is doubly risky to the strength and stability of your relationship. Not only do you have to deal with the lack of honesty between partners, but you also have to deal with any financial fallout that may come from what was being hidden. Debt and budget problems on top of dishonesty in your relationship just add to the stress and feelings of betrayal.
Financial infidelity statistics
Unfortunately, financial infidelity is a common problem in the U.S. It’s a real threat that couples face which can create significant rifts that ruin relationships.
According to a 2019 CreditCards.com poll:
- 19% of Americans who live with their partners have a hidden savings account, checking account, or credit card account
- 35% of those surveyed thought a hidden account would be just as bad as physically cheating
- Only 2% said they would break up with their partner if they secretly had over $5,000 in credit card debt
That last statistic should give you a little bit of hope. Even if you or your partner have been keeping money secrets, there are ways for you to work it out. Not many people see it as break-up-worthy. This guide can help you overcome financial infidelity.
Facing Infidelity: Secret Purchases & Transactions
By and large, the most common type of financial infidelity comes when one partner hides a purchase or a series of purchases from the other partner. You find something you like when you’re out and about. You know it’s out of your budget. So, you pull out the plastic and put the purchase on credit so you can satisfy your need to buy.
If you’re making secret purchases: Bite the bullet and confess! It’s better to tell your partner yourself than have them find out later when a bill comes in. Tell your partner what you bought, how much you spent and why you felt like you had to hide it. It may come to light that you’re both feeling hedged in by your budget. Maybe you need to set aside money each month so each of you can splurge a little.
If you find secret transactions: Take the evidence you find to your partner as calmly as possible. Ask what happened and if there are any other purchases that you don’t know about. Again, focus on WHY your partner felt the need to make those purchases behind your back. Sometimes you can resolve the issue with budget adjustments. It may just be about getting honest when you make purchases instead of keeping them secret. Avoid getting angry or making accusations.
Facing Infidelity: Hidden accounts
A few secret transactions is one thing, but finding an entire credit card or bank account that was hidden is a slightly bigger problem. In most cases, this happens when one partner opens a credit card without the other partner’s knowledge. Instead of just hiding a single purchase amidst the month’s transactions, you open a secret credit card so you can charge regularly without your partner’s knowledge. When lenders calculate your debt-to-income ratio they are going to include that hidden account, which may impact your ability to qualify for a mortgage or car loan at the terms you want.
If you have a hidden account: First, stop making charges. Step two needs to be to confess to your partner that the account exists. Your knee-jerk reaction may be to hide it and try to eliminate the debt on your own, but it’s a much better prospect to confess and come up with a plan to eliminate the debt incurred as quickly as possible.
If you find a hidden account: It’s going to be hard to keep your cool when you find out your partner has been keeping an account secret, but the calmer you can stay, the less likely this is to break up your relationship. Stick to the facts – how much debt is there to deal with together and what kinds of transactions were being made. You may need to adjust your budget to make your partner feel less cornered.
Facing infidelity: Squirreling away assets
The final most common type of financial infidelity comes when one partner is squirreling away money or assets from the other. This usually happens for one of two reasons:
- The “saver” in the relationship feels like they have to hide money in order to keep it from being spent.
- The person hiding money is preparing for separation.
In the first case, it’s not a good sign for the relationship that you have to keep secret accounts in order to keep your partner from spending every dime, but it’s also not the end of the world. In this case, you both need to get on the same page when it comes to saving and spending money.
Your budget needs to have a set amount that you save together, and that money shouldn’t be spent. Real limits need to be set for spending, so each of you knows exactly how much you’re supposed to spend each month. And if your partner really does have a hard time not spending, consider saving and asset options that can’t be tapped, such as investing in bonds where you put the money away and can’t touch it for a set amount of time.
Hiding assets in preparation for a divorce is an entirely different matter. If you’re trying to hide financial assets ahead of a legal separation, keep in mind that it’s against the law to hide assets during a divorce filing. In most cases, even if you plan on leaving soon, hiding assets is not a good idea. Unless you have a specific reason, such as putting away money to flee from domestic abuse, you should never try to hide assets.
Resolving the issue: Creating financial goals together
The best way to resolve (or even prevent) financial infidelity is to have a frank conversation about your finances with your partner. Be open about everything from past money mistakes to current troubles to hopes for your financial future. You could even get a mediator and have a little financial therapy. This may take a while and it could be a frustrating talk about money. However, if you work hard to get on the same page with your financial planning, you and your partner will be able to create a budget you can stick to and cease the financial infidelity for good.
