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Do you keep money secrets from your partner? Do you spend money without your partner’s knowledge? Do you hide purchases? Do you tell your partner you spent less on something than you actually did? Do you have secret stashes of money that your partner knows nothing about? Have you made investment decisions behind your partner’s back? They may seem like little green lies, but for many relationships they are much bigger. If you answered “yes” to any of these questions, financial infidelity may be putting your relationship at risk.
Financial Infidelity Is More Common Than You May Think
In a survey of 1,001 people by Money magazine, 40% of the respondents admitted that they have told their partner that they paid less for a purchase than they actually did. Sixteen percent confessed to buying something that they did not want their spouse to know about.
While both men and woman admit to financial dishonesty, women are more likely to tell their husbands that they paid less than they actually did for clothing and gifts, while men minimize their spending on cars, entertainment and sporting events. In the Money magazine survey, almost twice as many men as women admitted that they had spent over $1,000 without their spouse’s knowledge, while women were more likely to say that the most they had spent without telling their husbands was $100.
Forty-five percent of those who admitted being deceitful around spending stated that they were not honest about their spending in order to avoid their partner’s anger, disapproval or lecturing. In the same survey, 44% reported that they believe it is okay to keep financial secrets from their spouses.
It is not surprising that people keep secrets about money. Many couples avoid talking about money because it is such an emotionally loaded issue. If and when financial infidelity is discovered by one of the partners, it rocks the very foundation of their relationship. It can shatter an illusion of trust: “If he/she is being deceitful about this, what else are they lying to me about?
A Four-Step Process for Addressing Financial Infidelity
Financial infidelity is such a common issue in our work with couples that my father and Mind Over Money co-author Ted Klontz, Ph.D., and I developed a four-step process for addressing financial infidelity in relationships. This process uses the acronym SAFE:
- S: Speak Your Truth. Talking about money and our financial behaviors is a taboo topic in our culture. We find that people are often more willing to talk about their sex lives than their financial lives. Many of us carry significant shame around money, often because we think we have too much or too little. The first step to establishing financial safety in your relationship is to sit down with your partner and talk about money. Rather than starting with spending habits and budgets, have a different type of conversation. What does money mean to you? What did you learn from your father about money? What did you learn from your mother? What is your most painful money memory? What is your most joyful? What are your biggest financial fears? What are your most important financial goals?
- A: Agree to a Plan. Many acts of financial infidelity occur with couples who lack explicit agreed-upon strategies of spending and saving. A comprehensive spending plan is an essential component of a healthy financial relationship. It is helpful for couples to agree on the amount of money that each can spend without needing to consult with their partner. When a potential purchase goes above the agreed upon amount, the couple agrees to consult with each other prior to making the purchase.
- F: Follow the Agreement. It sounds simple, but this is the hard part. An agreement is only as good as a couple’s commitment to honoring it. It is helpful in the beginning to set up the agreement to be valid for the next 30–60 days. After the agreed upon period of time, the couple meets and answers these three questions: Is the plan working for me? Is it working for you? Is it working for our relationship? If either person in the couple answers “no” to any of these questions, the couple should renegotiate their plan.
- E: Establish an Emergency Response Plan. If couples find that they can’t talk about money without fighting, can’t come to an agreement or can’t keep their agreements about money, they may be in trouble. As such, it is important to have an Emergency Response Plan, which goes into effect when these types of difficulties arise. This plan identifies, ahead of time, what the couple will do when they arrive at an impasse. For example, when a couple cannot arrive at or adhere to a plan, the Emergency Response Plan might include an agreement to seek help from a financial therapist, financial planner or couples counselor.
Couples Can’t Afford to Be Financially Unfaithful
With money being the number one cause of marital conflict and the number one cause of divorce in the early years of marriage, couples cannot afford to be financially unfaithful. Use the SAFE process to establish an agreement around money with your partner to maintain financial fidelity in your relationship.
Dr. Brad Klontz, Psy.D., CFP®, is a financial psychologist, an Associate Professor and Founder of the Financial Psychology Institute at Creighton University Heider College of Business, a Managing Principal of Occidental Asset Management (OCCAM). and co-author of five books on financial psychology, including Mind Over Money: Overcoming the Money Disorders That Threaten Our Financial Health.
You can follow Dr. Klontz on Twitter at @DrBradKlontz
