When I was newly married, a close family member whispered in my ear to store my treasures from shopping in the trunk of my car until it was “clear” to bring them into my home.
Even though I always bought items that my husband and I could afford, this was a habit I practiced for years. I was hiding my guilt over spending money, never thinking about the message my actions were sending to my family.
Sometimes, a person may withhold financial information from a partner, for reasons that feel justified at the time. When you don’t share financial information with your spouse, is it simple oversight, an innocent secret or financial infidelity?
Financial infidelity can damage a relationship, disrupt your ability to reach your goals together and potentially threaten your long-term financial security. However, according to WalletHub, 42% of Americans have financial secrets.
People keep financial secrets for a variety of reasons. They may want to feel in control or independent, may feel ashamed about their financial decisions, may want simply to avoid conflict or may be trying to sidestep judgment.
• Desire for control: In a household where money is associated with power, managing finances alone without input from a spouse or partner can make a person feel like he/she is in control of the relationship.
• Feeling shame: If a person has made poor financial decisions in the past, feelings of embarrassment and shame may make open communication difficult and uncomfortable.
• Conflict avoidance: When two people do not have the same philosophy or approach to managing money, keeping secrets from a partner, intentionally or not, may be a way to avoid conflict.
• Fear of judgment: Some people worry that their financial actions will lead to criticism from others. To avoid the feeling of being judged, they hide their financial behavior from their partner.
According to a Bankrate survey, among U.S. adults who are married, in a civil partnership or living with a romantic partner, 40% are committing or have committed financial infidelity against their current spouse or partner.
Examples of financial infidelity include spending more than a spouse or partner would be OK with (33%), keeping debt hidden (23%), using credit cards without the partner’s knowledge (17%), opening a secret savings account (15%) or having a secret checking account (13%).
Bankrate also reports that almost half of those respondents believed that keeping financial secrets from a romantic partner is as bad as or worse than physical infidelity.
This includes 38% who believe that these practices are equally bad, and 7% who say financial secrets are worse than physical infidelity. Only one-third say that deceitful financial behavior is not as bad as physical infidelity.
Could your actions be interpreted as financial infidelity by your spouse? These behaviors might indicate a problem:
• Tucking your purchases away quickly or leaving them in your car until the path is clear to bring the items into your home
• Spending more money than you can afford monthly, paying for the purchases with a credit card
• Intentionally hiding credit card statements from your partner so he/she doesn’t see your purchases
• Maintaining a bank account in your name only that your spouse is not aware of
• Opening credit cards and carrying balances without your partner’s knowledge
• Hiding cash from your partner because you do not want to share where and what you are spending money on
• Using a home equity line of credit (HELOC) to buy stuff without telling your partner or sharing the monthly statement
• Pulling cash from or stopping contributions to your retirement account without your partner’s knowledge
Couples divorce for many reasons, but according to the Institute for Divorce Financial Analysts, financial problems account for 20% to 40% of all divorces. Different views on spending, saving or establishing common goals can constitute the problem. Lack of financial stability, such as frequent job changes, can bring additional stress to finances and marriage. Whatever the reason, financial infidelity will eventually erode trust in the relationship, leading to deeper unresolved issues.
While you may not want to share your financial status with family members or friends, talking to your partner about your finances and working together to reach common goals is key to a successful outcome.
When I changed my behavior and brought my shopping bags inside upon arriving home, to my surprise, my husband’s interest in my finds was minimal or nonexistent.
He wasn’t concerned that I spent too much money because I never did. It turns out I was actually hiding from my own fear of spending too much. Hiding my purchases only hurt me, because I was the one who carried the stress of keeping secrets.
The implications of financial secrets can have damaging consequences while you are married, or even after you die. When a spouse is left to resolve and unwind financial actions he/she wasn’t aware of, feelings of betrayal can run deep and can last a lifetime, or longer.
Before it is too late, establish regular communication and financial conversations with your partner around your budget and short-terem and long-term goals. Setting expectations and boundaries will help you define and meet your financial goals and objectives together.
Teri Parker is a certified financial planner and vice president for the Riverside office of Captrust Financial Advisors. She has practiced financial planning and investment management since 2000. Contact her via email at Teri.parker@captrust.com.