Is financial infidelity destroying your relationship?

Recent studies in the US(1) confirm that one in three spouses lie to their partners about money, or admit to being deceived by a partner about money. It’s called financial infidelity and is replacing sexual infidelity(2) as a leading cause of relationship breakdowns.

While you may think financial infidelity is about spending money on some illicit relationship or secret bank accounts, which it could be, in reality, the term is much wider. Financial infidelity is about lying to your partner about what you earn, about costs that are concealed or understated or, worse yet, debt that has been ignored or hidden.

Not surprisingly a recent study from Kansas University(3) found that arguing about money is the top predictor of divorce, regardless of the couple’s income, debt or net worth. Or as my grandmother often said “when money worries come in the front door, love tends to fly out the window”. Financial unfaithfulness is often the result of both spouses needing to manage and communicate better around finances but not knowing how to start.

As a Financial Personal Trainer for over seven years, I have seen numerous instances of financial infidelity. Clients come to me at different stages of the “lets come clean to each other” phase. One client decided their initial meeting with me was the perfect platform to tell his wife that he had incurred $50,000 of debt in the business without telling her. Another client shared that their combined credit card balances of $57,000 needed to be addressed. In both instances the spouse, who was previously unaware of their financial position, was jolted back to reality.

The wife of the self-employed man (who incurred the business loan on the side), burst into tears. Tears of frustration, anger and embarrassment. Frustration at her partner for not telling her sooner, anger that he was prepared to jeopardize their financial position, and embarrassment at herself for not realizing how bad the situation had got. The husband whose wife had amassed credit card debt was surprised that they were going backwards as he assumed there was enough money to get by, when clearly there wasn’t. He asked, somewhat accusatorially, what the money had been spent on. I could show him it went on nothing and everything. Stuff. Stuff that they had both enjoyed. The credit card facilitated overspending when they didn’t have money in the bank. He got it. He didn’t blame, but he wanted it sorted and he definitely didn’t want it happening again. He thought because his wife paid the bills that she was also in control of their money. She wasn’t. Both were committed to getting it sorted and we did. They are now in control, and on track to be mortgage free in 5 years, which includes the credit card debt.

Financial infidelity doesn’t need to destroy a relationship when you both admit you are capable of doing better, and do, in fact, do better. What people don’t seem to realise is that burying your head in the sand or ignoring the situation is actually taking an action. Not a very productive deed, but an action nonetheless.

Whilst some client situations are scandalous (with undisclosed debts of more than $100,000, most commonly to the IRD), many are simply the result of one spouse not being in control of their money and choosing not to share this with their partner. They hide performance, or the fact that they are sinking, in the vain hope that things will sort themselves out and they are embarrassed or don’t want to incite judgment. They presume (perhaps justifiably) that any involvement of their spouse will be destructive instead of constructive.

Likewise, the spouse chooses to ‘not ask questions’, and is often happy to remain in the dark concerning their combined financial position; which is just as financially destructive. In fact I believe the ‘hands-off’ spouse’s disengagement from the finances enabled the overspending occur in the first place – much like the argument that if ‘you had been paying more attention to me, then I wouldn’t have strayed’. Both parties are equally to blame.

Interestingly, many of my older female clients are drawing a line through their relationship citing irreconcilable differences relating to finances. In short, they are sick of their partner being irresponsible with their finances. They would prefer to halve their income and be entirely responsible for their own financial future than have a disconnected spouse who does not seem to care about the necessary financial goals (like sorting retirement).

Money issues cannot be buried. They will rise to the surface at some point. And depending on their severity, will have a tsunami or ripple effect throughout your relationship.

My advice to clients in this situation is to first acknowledge the issue and then work on fixing it. This discussion can be confronting and very emotional, which in turn results in hurt feelings instead of actual progress. Sometimes people need to be “called” on their behaviour and supported to create a different reality. 

Many of my clients involve me because despite asking their spouse to improve, they are ignored. From my perspective, how a client arrives at the problem is less of a concern than how we are going to fix the problem. If you are sinking, come clean. If you feel in the dark with your finances, start talking about it. If you feel you can’t do this, then involve a qualified third party (not a friend or family member).

Some clients have said to me that working with me is the last step in their relationship and unless I resolve the financial undercurrent then the relationship is over. This pressure in itself does not bother me as I get away with saying many things to my clients that if they said to each other would create offense, but hearing it from me is taken on board and actioned.

Money is complex and emotional and often you need a sounding board outside of your relationship. It’s about working together, towards a shared goal – not being accountable to your partner.

Whether you have been cheated on financially, or are the cheater, this need not define you. But you need a plan to be able to work through the issue in a constructive way (pretending it hasn’t happened is not a recommended solution). Money issues are rampant and are an increasing cause of failed relationships. Don’t let your relationship become a fatality of financial infidelity. Financial success is about making progress, living a life you enjoy, but making progress in the face of the setbacks.

To the pleasant surprise of my clients, progress can be made despite financial differences. In many instances the financial dynamic is seemingly outsourced to their Financial Personal Trainer, meaning their relationship is no longer bogged down by financial niggles, allowing them to achieve their financial capability.

Go on, address the issues and get on track to a happy, healthier relationship and a happier, healthier you!

(1) National Endowment for Financial Education; National Foundation for Credit Counselling
(2) Recent survey published by and SELF magazine found that 60% of those interviewed (23,000 interviewed) view financial infidelity as serious as sexual infidelity

Hannah McQueen is the founding director of EnableMe – Financial Personal Trainers, and author of best-selling self-help book Perfect Balance: How to Get Ahead Financial and Still Have a Life.


Photo Jared Sluyter