In romantic relationships, sexual infidelity gets the headlines, but financial deception is a close runner-up as a
Hiding spending or debts from romantic partners is more common than we’d like to think. Financial infidelity is an equal opportunity transgression, even though men are more likely to hide very large purchases (over $15,000) and women smaller ones.
Having a secret savings account towards a family holiday, or even a private emergency fund, doesn’t count.
Examples of financial infidelity could include:
- Hiding the amount of personal debt or taking out new loans
- Withdrawing funds from joint accounts without prior consent
- Compulsive spending
- Hiding bad credit scores
- Keeping hidden bank and investment accounts
There are a variety of reasons why a someone would fudge their finances. Feelings of low self-esteem could lead to compulsive spending to showcase a rich lifestyle on social media. In some cases, there could be some concern about the stability of the relationship that encourages a partner to hide assets.
Whatever the reasons, leading a secret and separate financial life within a relationship creates twin penalties for the family: 1) the risk of not meeting financial and personal goals, and 2) putting the partner at risk for the other’s debts.
How You Can Spot Financial Infidelity
The Secret Shopper:
New Credit Cards: Are you finding statements from credit cards you don’t know about? Sometimes there are good reasons for having separate cards, but if there is a balance on the card, those funds are being diverted from the family budget which could be used to pay off a mortgage. Alternatively, you may find that your name may have been removed from a joint card. Ask yourself why.
ATM Withdrawals: Is cash disappearing faster from your joint accounts? Find out why.
They’ve Got Mail: When the mail arrives, does your partner vet it first? He or she could be hiding credit card bills or debt collection notices.
Sudden Changes: If you notice a sudden change in your partner’s behaviour, this could be a clue to a change in financial activity too. For example, guilty feelings about excess spending or gambling might result in excessive gifts giving. Alternatively, your partner might become very emotional or anxious when you bring up the subject of bills or shared financial goals.
How Accountants Can Protect Clients from Financial Infidelity
Stay Involved: In many couples, one partner becomes the ‘family treasurer’, paying bills and investing. Historically, this has been the male in a heterosexual union, even though studies show no gender differences in financial capability. This division of labour comes with some unintended consequences. Over time, the financial abilities of one partner begin to outweigh those of the other. A relationship dissolution or the death of the ‘money manager’ partner, could leave the remaining partner at a financial disadvantage.
Keep Talking: Open lines of communication are key to ensure that the couple are aligned on major goals and on spending patterns. Some couples prefer to merge assets while others keep separate accounts. There is no one right way, as long as the arrangement is clear. One thing is certain: couples who work together have
Financial Therapy: Professional financial planners discover that creating budgets and spreadsheets is a smaller part of their job than addressing the psychological and emotional aspects of handling money as a family.
A Little Structure Goes a Long Way: Research has found that couples who pay bills in an ad-hoc way were more likely to keep secrets from their partner. Creating some
Rita Silvan, CIM™️, is personal finance and investment writer and editor. She is the former editor-in-chief of ELLE Canada magazine and is an award-winning journalist and tv media personality. Rita is the editor-in-chief of
Golden Girl Finance, an online magazine focusing on women’s financial success. When not writing about all things financial, Rita explores Toronto’s parks with her standard poodle.