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Valentine’s Day evokes visions of hearts, flowers, chocolates, and whispered promises. But for some couples, romance isn’t on the menu when one partner discovers their sweetheart is hiding bank accounts, running up debt, or lying about purchases.
It’s called financial infidelity, and new research suggests that betrayal involving money can cut just as deep as cheating.
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Bankrate’s survey found that 43% of Americans believe keeping financial secrets from a romantic partner is just as bad as physical infidelity, with 5% saying it’s actually worse. Meanwhile, nearly half (45%) of American couples admit they don’t know everything about their partner’s finances.
While one in four Americans in committed relationships admitted to hiding minor debts, expenses, or income, 9% said they’re hiding major financial issues and 11% aren’t discussing their credit scores, credit histories, or investment accounts, the survey found.
“Secrets can take on a life of their own, undermining trust and the relationship,” said Ted Rossman, senior industry analyst with Bankrate. “The fix is communication. You don’t necessarily need to combine all of your finances with your partner, but you do need to be aware of where your money is going.”
What exactly is financial infidelity?
Financial infidelity typically involves any dishonesty around money, according to Rachel Cruze, a certified financial coach with Ramsey Solutions. Cruze hears these stories all the time from callers on The Ramsey Show. One caller’s husband recently confessed to taking out $130,000 in loans behind her back for day trading, losing all of the money.
But not all financial secrets are that big or egregious.
“This could look as small as hiding shopping bags …all the way up to having secret accounts or secret credit cards that your spouse doesn’t know about,” Cruze said.
Attorney Julia Rodgers, CEO and founder of HelloPrenup.com, sees financial infidelity as a form of control in relationships. She describes two common patterns: the controller and the spender. This dynamic is even more pronounced among couples where one partner makes the lion’s share of household income, aka the “breadwinner,” and the other partner doesn’t work and stays home to raise children.
Financial infidelity can also involve one partner projecting an aura of wealth they don’t actually have, leaving the other person in the dark.
“I’ve seen this time and time again: Women will say, ‘I had no idea that we didn’t have that money. I thought that we were spending that kind of money because we had it,'” Rodgers said. She adds that this happens when a partner exaggerates their income or assets, leading to an exaggerated lifestyle inflation.
How to spot the warning signs
Not all financial infidelity involves six-figure indiscretions. Sometimes it’s as simple as telling your kids, “Don’t tell daddy we went shopping.”
These smaller transgressions are “the proverbial canary in the coal mine” that reveal communication shortcomings or other issues, said Megan McCoy, a licensed therapist and assistant professor with Kansas State University.
“It means that you’re ashamed of what you’re doing, or you feel like you don’t have power in your relationship, or you feel like you don’t have conflict resolution skills with your partner,” McCoy said. “These littler indicators of financial infidelity can almost be a sign, and if we could get people to see them, then we could fix it early on.”
Financial infidelity thrives in silence and delegation. When one partner manages all the money while the other is uninformed about what’s coming in and going out, misdeeds go undetected.
“We do find with couples, there’s usually one person that does it all — they press the buttons, they pay the bills — and the other person is completely out of the loop,” Cruze said. “When that happens, it can be so easy for purchases just to slip right through.”
To avoid financial secrecy, experts recommend getting involved — even if numbers aren’t your thing. Open the accounts. Ask for login information. Pull both of your credit reports regularly to check for inconsistencies or errors.
Even if you’ve just started dating, having conversations about money early and often can be a window into each other’s attitudes around money. Experts agree that these talks can help you evaluate your compatibility on issues like spending, saving, career ambitions and lifestyle priorities.
“Observe how they spend, observe how they talk about money,” Rodgers said. As your relationship gets more serious, talk about your individual and shared goals and dreams, she added. Take it a step further in understanding how you and your partner’s financial habits will be a help — or hindrance — to achieving those dreams.
When to have the hard conversation about money secrets
Whether you’re the one hiding financial misdeeds or you’re the one who discovered them, be prepared for a vulnerable discussion.
For those coming clean, McCoy stresses understanding the “why” behind the behavior, otherwise, nothing will change.
“So often it has to do with addictions, with impulses or almost, like, compulsions,” McCoy said. “Maybe your mental health isn’t doing well, so you’re depressed or anxious and you’re shopping to make yourself feel better. Until you fix that underlying reason, you’re going to relapse.”
If you’ve been hoarding money secrets, don’t expect immediate forgiveness, McCoy warns.
“I think when we come clean to our partners, so often we have these practice conversations in our head, but by the time we tell them, we already did all the work,” McCoy said. “We’re almost entitled, like ‘I did the hard stuff already. Why aren’t you being nicer to me?’ Your partner is allowed to be mad and frustrated at you, and you need to be able to stay calm and grounded and let them vent a little bit.”
If you’ve discovered financial infidelity, approach the conversation with curiosity rather than anger, Rodgers suggests.
“Come from a place of complete and total vulnerability,” she said. “Ask a lot of questions like, why are we here? What got them there? What you really want to dig into and understand is what is the underlying root cause, because it’s often not about money.”
Oftentimes, financial infidelity stems from deeper relationship issues, including feelings of mistrust, entitlement, shame, insecurity or a need for protection or control. When someone hides this behavior, chances are they worry their partner won’t approve of it.
When financial infidelity morphs into financial abuse
There’s a line between financial infidelity and financial abuse, though the two often overlap.
Financial abuse is when one partner is denied control or access to money in a relationship, Cruze said.
“We talk to couples and they say, ‘Well, my spouse just gives me X $TWTR amount of money per week, and that’s what I’m allowed to spend,’ and they don’t have access to their accounts. That’s financial abuse, in my opinion,” Cruze said.
Other examples of financial abuse include: opening accounts in a partner’s name without their consent, running up debt on joint accounts, preventing a partner from working, controlling how money is spent or purposely defaulting on bill or loan payments.
Over time, financial abuse is a form of control that “takes away your power to leave when the situation gets worse,” McCoy said. “But so often, it starts so quiet and so insidious that you don’t even notice as you give a little bit — and give a little bit more.”
According to the National Network to End Domestic Violence (NNEDV), financial abuse keeps victims trapped and occurs in 99% of domestic violence cases.
Editor’s note: If you or someone you know is in crisis, contact the U.S. National Domestic Violence Hotline by phone (1-800-799-SAFE), chat (TheHotline.org), or text (START to 88788).
How to protect yourself (and your finances)
If left unchecked, a partner’s financial infidelity can destroy a relationship and derail your financial goals. Here are some steps you can take to protect your financial wellness.
1. Open your own bank account. This should be a bank account in your name only. If a partner is lying about expensive purchases, misusing household funds or constantly overdrawing a joint account, having an account in your name provides you with autonomy and an exit strategy, if needed, Rodgers said.
2. Check your credit report regularly. You can access your credit report from the three major credit bureaus — Experian, Equifax and TransUnion — for free at AnnualCreditReport.com. Look for errors or unauthorized accounts, and set up fraud alerts if you suspect your partner is misusing your information without consent. You can also freeze your credit so no new accounts or loans are opened in your name.
Ask your partner if they will also pull their credit report and share it with you, and vice versa, so there’s a mutual understanding of your financial situations. Keep in mind that depending on your state’s laws, you could be on the hook for some of the debt your spouse takes on. Pulling credit reports regularly will help you keep tabs on outstanding accounts and their balances.
3. Schedule monthly money dates. Sit down with your partner once a month, at minimum, to review the household budget, expenses, income and financial goals to ensure you’re on the same page and on track. These regular money check-ins encourage transparency around spending and can help you uncover any problems before they grow into larger financial boulders.
4. Seek professional help. If you and your partner need help to work through financial infidelity, consider seeking out a therapist. Depending on what’s driving the financial secrecy, the partner who’s being financially unfaithful might consider solo therapy or treatment to address the underlying issue (depression, cheating or gambling, for instance).
Working with a certified financial therapist might be a good option to help couples overcome emotional or psychological obstacles related to money. It can also help them uncover and change unhealthy financial habits that improve their financial well-being.
5. Consider a prenup or a postnup. A prenuptial agreement is a legally binding contract between a couple before marriage. It spells out how finances, assets, debts and spousal support will be handled after a death or divorce.
If you’ve missed that window, consider a postnuptial agreement after you’ve tied the knot. A postnup functions similarly to a prenup, but it can be used to address assets acquired during marriage, such as a family inheritance or a new business. It’s also a helpful tool if there’s financial infidelity and you want guardrails in place as you work things out.
Rodgers recommends getting a prenup whenever possible, because it’s typically more ironclad than a postnup, which can get more scrutiny in court.
6. Contact a lawyer if you discover fraud. If your partner opens unauthorized accounts or loans in your name, it’s time to call a lawyer, Rodgers advises. That’s not just infidelity; that’s financial fraud.
Not only can this wreck your finances and credit, it can also make it harder for you to rebuild your life after the relationship ends. Also, alert the financial institutions to inform them of the suspected fraud, and freeze your credit immediately to prevent additional accounts from being opened in your name.