If you've never heard the term "financial infidelity," it doesn't mean you don't know what it is. In fact, according to a recent CreditCards.com survey, 32% of respondents have financially cheated on their partners.
Both finances and cheating can be complex subjects to discuss, even with and, sometimes especially with, those closest to you. Not surprisingly, this topic is pertinent to physicians and dentists because they tend to have more money available.
We created this article in hopes that if there are any seeds of financial secrecy in your relationship, you can identify them, admit them, and begin to weed that garden of your relationship before it gets out of hand. And if you see financial infidelity or the signs of it in a close friend or family member, perhaps you'll be better equipped to help them make decisions to strengthen their relationship.
With all that said, let's start at the beginning.
Watch the video to learn more about financial infidelity — what is it, why people do it, how it manifests in relationships, and what you can do if you experience it — or keep reading:
Financial infidelity occurs when one person in a relationship with joint finances lies to the other about money. Essentially, it's when one spouse makes significant decisions about money in secrecy. As a result, it can have dire consequences on a marriage.
Almost half of the people surveyed agree that financial infidelity can be as painful and damaging to a relationship as physical cheating.
Listen to a real-life story about the impact financial infidelity can have on a relationship.
Based on that same creditcards.com poll referenced above, far more Gen Zers (61%) and millennials (48%) with significant others have kept financial secrets from their partners versus Gen Xers (28%) and baby boomers (19%).
A few reasons that the younger generations are more likely to commit financial infidelity include:
In a relationship where there is the presumption of combined finances, financial infidelity shows up in many different ways. But one of the key questions is: What causes this? Why do people financially keep secrets or financially cheat on one another?
And while it's easy to say, well, clearly they have a money problem — the problem isn't money. Like all forms of cheating, the problem is fundamentally a lack of trust.
In a relationship with financial infidelity, the ability to talk about money isn't present. Either there is a desire or demand to control money in the way you want to without compromising with your significant other. Sometimes, there's just considerable embarrassment over how you make money decisions, and so you keep it a secret.
Now, often when we talk about financial infidelity, people assume that means someone is spending money and buying stuff in an out-of-hand way. And it's true, spending can be a form of financial secrecy, but so can savings.
Some people in their relationships find themselves choosing to spend money without the consent, discussion, or involvement of their significant other. This can show up in a number of different ways, including secret savings, hiding existing debts, excessive expenditures without first talking it through with your partner, and lying about the use of money.
For business owners like dentists, financial infidelity can show up in running personal expenses through the business account without discussing it with their partner first.
The savings aspect of financial infidelity may stem from one party having a desire and commitment to saving or investing more money than their spouse or partner may want to.
Sometimes, what we see is not statements from credit card companies but statements from different investment programs or clubs. Perhaps even statements from hedge funds, cryptocurrency, or private equity funds that haven't been discussed or understood together.
Other times, financial infidelity through savings can show up through forgotten or missed bonuses. What is meant by that is there has historically been a pattern of bonuses, true-ups, or extra funds that the couple used for agreed-upon expenses, and now there is no discussion about those, or they seem never to arrive. Is it because they don't?
In any case, the root cause is secrecy born out of a lack of trust and desire to work together, and it can be incredibly damaging.
So, what to do if this is present in your relationship? You probably already know. In most cases, the remedy is similar to the treatment for any sort of deception or infidelity, and that is honesty. The first step is not just to look at what happened, but why did it happen?
Before you engage in an extensive, deep conversation, often with tears or anger, it's essential to look into your own heart and see why you feel compelled to act against the involvement or participation of the person whom you publicly say is the most important on Earth. That is a really, really important step to take to understand the root causes of the relational dysfunction.
With that said, it is critical to have a conversation about what happened and why it's been going on. In addition, you will need to offer some level of apology for your complicity in making these decisions.
Sometimes, the apology and the light of day can help bring a fresh outlook to your relationship. But usually, some level of breached trust needs to be repaired, and this can be attempted through forming agreements together.
For example, some couples will agree that neither will spend money above a certain level from now on. Or in the case of the savings secrecy, there will be no accounts opened in this household that are not in joint name to ensure that both parties are involved in what's happening and an attempt to rebuild the trust.
It may even require a neutral third party; a friend, a colleague, or a financial advisor can participate in neutralizing or diffusing the energy and hurt that exists while you work to form new methods of making decisions. Indeed, counseling or therapy can often be beneficial to work through the issues that you have as a couple and through your own relationship with money and its importance in your life.
In addition, creating a monthly budget, being transparent about expenses, reassessing your goals together, and having regular financial check-ins can help.
While a complicated topic, it is one to acknowledge and face honestly.
Financial infidelity can be highly destructive in relationships. Still, hopefully, now that you're thinking about it, you can help avoid this topic in your relationship and move on to brighter times, working together towards your shared goals ahead.
Please reach out to our team of advisors if we can assist you and your partner as you plan your financial future as a couple.
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Shane Tenny is the managing partner of Spaugh Dameron Tenny. Along with hosting the Prosperous Doc® podcast, Shane has a true passion for behavioral finance, helping clients and audiences understand how to develop successful strategies based on their unique temperaments. An accomplished and highly engaging speaker, Shane is regularly interviewed for television and podcasts, is actively involved in the Financial Planning Association®, and contributes to industry advisory boards.
