You think you know your partner like the back of your hand. They know his hopes and dreams, his favorite foods and movies. After so many years together, you can practically read each other's minds… Except when it comes to money.
Financial infidelity is common among couples and is damaging to relationships. More than four in 10 American adults in couples admit to keeping a financial secret from their partner, according to a new Bankrate survey.
Of these couples, 28% say hiding financial information from their partner is just as serious as physical infidelity, and 7% say it is even worse.
So what is financial infidelity and how can you avoid it with your partner?
What is financial infidelity?
Financial infidelity occurs when a couple lies to each other about money. This type of infidelity can come in different forms.
This could be a partner who makes secret purchases, accumulates debts, or engages in financial deception.
A partner may also open secret credit cards, maintain side accounts, lie about purchases, refuse to discuss their finances, or engage in other questionable financial behavior without the other's knowledge.
Even if a couple hasn't pooled their finances, lying about how much they owe or hiding certain major expenses can be a form of financial infidelity.
The most common forms
According to the same Bankrate survey, the most common forms of financial infidelity include spending more than your partner would accept (30%) and accumulating debt without your partner's knowledge (23%).
Here are the other biggest financial infidelities:
-A secret savings account (19%)
-A secret credit card (18%)
-A secret checking account (17%)
Although financial infidelity occurs in different age groups, younger couples are more likely to keep money secrets.
The same survey found that 67% of Generation Z and 57% of Millennials say they have kept at least one financial secret from their partner.
In comparison, only 34% of Generation X and 33% of Baby Boomers report financial infidelity.
The study also shows that the lower the household income, the more likely financial infidelity is.
Nearly half of people whose household income is less than $50,000 reported financial infidelity, compared to 34% of those whose household income is $100,000 or more.
Why do people cheat financially?
Financial infidelity can have several reasons.
“People may hide financial information out of fear of judgment or conflict, embarrassment about their spending habits or debt, or a desire for control or independence in the relationship,” says Taylor Kovar, certified financial planner.
More than a third (37%) of people who have hidden financial information from their partner admit they want to maintain their privacy and control their finances.
One in three cite a lack of communication (the topic of money was simply never discussed).
Additionally, 28% of respondents said they were embarrassed by the way they handled their money, which is why they kept it a secret.
People who secretly go into debt or lie about money often feel ashamed, guilty, and anxious.
Money secrets harm the couple
For many, financial infidelity is just as serious as physical infidelity. Lies and deception can undermine the trust and transparency on which a relationship is built.
Since money influences almost every aspect of our lives, money fraud can impact a couple's plans.
“Financial infidelity can seriously damage the trust that is the cornerstone of every relationship,” Taylor Kovar, a certified financial planner, tells the New York Post.
“It can lead to feelings of betrayal, hurt and a breakdown in communication. The financial impact can also be significant, potentially impacting the couple's credit score, savings and overall financial stability.
Another survey found that 38% of couples cited financial problems as the cause of their divorce.
How to deal with money secrets
The best way to deal with financial infidelity is to talk about it openly.
“It is possible to repair the relationship, but it will take a lot of work,” Regina McCann Hess, a certified divorce financial analyst, told the New York Post.
“Both sides must agree on ground rules for the future and commit to taking the necessary steps toward healing. One or both parties may need to meet with a therapist to get to the bottom of the issue,” she advises.
Here are more tips for dealing with financial infidelity:
– Speak as quickly as possible
– Present facts, not accusations
-Disclose everything: amounts, accounts, debts
– Express what you think about this infidelity
– Demand financial transparency for the future
-Seek out neutral financial advice together
-Strengthen financial transparency within a couple
Whether you are a new couple or have been together for many years, there are ways to create or restore financial transparency.
“A good way to incorporate financial transparency into a relationship is to hold monthly or quarterly meetings to review the family's finances,” says Hess.
“It’s a financial report. To make training less stressful, I suggest having breakfast on a Saturday morning, then coming home and having a conversation at the kitchen table,” she suggests.
Review your bank statements, investments, retirement accounts, etc. According to Ms. Hess, doing it together makes both partners feel included and participate in the conversations. This is also a good time to talk about financial goals.