What Is Financial Infidelity—and How Can Couples Avoid It?

It may start innocently enough. You stash that expensive new workout gear in the trunk of your car, so your spouse won’t know you bought it. Or perhaps you never mentioned, before your marriage, a few thousand dollars of credit card debt you’d been carrying—and now you take out a loan to pay it off, but without discussing it at home. 

While the motivations and reasons for not talking about your spending with your spouse may be myriad, they all add up to the same thing: financial infidelity.

“Financial infidelity is when a partner engages in secretive or hidden financial transactions that they do not share with their partner—and it would be expected that these transactions would be shared, not hidden,” says Anne Brennan Malec, the founder and owner of Symmetry Counseling in Chicago, and a clinical psychologist who specializes in financial therapy. 

This type of infidelity takes many forms, from secret credit cards to gambling debts to hoarding cash, or gifting money to family or friends on the sly. It may be taking out a line of home equity on your house, or withdrawing funds early from a 401(k). “It can get pretty ugly,” says Malec.

Recent studies show that financial infidelity is a growing problem, estimating that 41% of American adults confess that they’ve hidden financial information, such as credit cards and debts, from their partners.

“It’s so common,” says Malec. “People don’t see it as infidelity, or as bad as sexual infidelity. But there’s an expectation between you and your spouse that you will share and discuss what you’re doing with your money.” 

So when people engage in hidden transactions, says Malec, it’s a real breach of the relationship and incredibly undermining. “It can be as devastating as sexual infidelity or even worse because—from losing your home, to uncovering debt, to having opened credit cards in your name—there is a tremendous financial risk to this type of infidelity.”

What Causes Financial Infidelity
At the root of financial infidelity are all the complex emotions that every individual carries about money, as well as the dynamics of the relationship. The person doing the hidden spending may feel his spouse micromanages his spending; that he “deserves” to spend what he wants because he earns money; or he simply may not want to be told no. The spender may feel she shouldn’t have to ask for permission to spend money, and so she spends freely. “But you are in a financial relationship, as much as a romantic, emotional relationship” says Malec. “You have an obligation to each other to be forthcoming.”

Being forthcoming, however, may be the exact thing that is the most difficult, as any couple who has fought about money understands. “People avoid difficult money discussions,” says Malec. “Couples frequently fight about money, so they avoid the topic. But that doesn’t actually work.”

How to Avoid Financial Infidelity
What does actually work, says Malec, is stopping problems early by forming a strong financial foundation with your partner. Meet monthly to talk about everything to do with your finances, Malec suggests, from debts to credit card payments to upcoming expenses, such as home renovations and vacations. Together, build and agree upon your budget. That way, there’s no money manager in the relationship, an arrangement Malec finds problematic.

“Both partners should be fully informed and invested,” says Malec. “Even if one partner knows more about money, you still have to invest the time to understand the finances.” As a bonus, when you’re both fully aware of the household’s daily finances and long-term goals, you both already know whether or not you can afford something. No one, she says, is put in the position of being in a parental role and “approving” the other’s purchases.

Additionally, Malec suggests giving each partner a set amount of fun money—which is budgeted for each month—outside of your joint accounts that can be spent as he or she wishes and with no rationalizing or explaining required. After all, she says, “there’s nothing worse than having a partner look at your debit account transactions and hearing that judgement of ‘oh, you’re back at Target again?’”

Regularly scheduled financial discussions also give you, as a couple, a forum to talk about money. “The monthly date normalizes the need for and benefit of money discussions,” Malec points out. “If someone is anxious, they know there is a time and place when they will have time to talk to their partner about it.”

How to Recover from a Breach of Trust
Overcoming financial infidelity can take time. “You repair trust and rebuild trust slowly,” says Malec. “You make deposits into the trust bank every day if you can.”

For the spouses who did the hidden spending, the revelation of the financial infidelity can result in a loss of financial control, due to a lack of trust. “The partner who was unfaithful financially loses the benefit of the doubt. And it can feel humiliating, that your partner doesn’t trust you anymore, that they’re looking at bank statements and taking full control of family expenses,” says Malec. 

Ultimately, Malec says, she sees in her practice that couples move away from that path. “It can make the betrayed partner uncomfortable to engage in surveillance of their partner, because they don’t want to be in that kind of relationship. They want to be in relationship where they can trust.”

Rebuilding trust will require, naturally, more open communication. “Transparency is key,” says Malec. “As is honesty, and recognizing that you’re a partnership. Your financial decisions affect your partners as much as you.”

Julie Anne Russell is a Brooklyn-based freelance journalist. She writes on personal finance, small business, travel and more.

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