Financial dishonesty in marriage is a recipe for disaster. It's a difficult topic to cover, but these are important strategies to think about when dealing with issues like financial infidelity.
Financial dishonesty in marriage and repeated financial infidelity is a difficult topic to cover when discussing marriage and money.
In fact, each time I've attempted to write this article about the topic, I've hesitated.
First I thought that by writing about it, everyone would assume that I was talking about my own partner (which I am not – though we did have to deal with the money imbalances in our own relationship).
Then I hesitated because of the sensitive and personal nature of this topic (note: I am not a relationship expert).
I finally decided to push all of this aside and attempt to navigate this delicate issue because of several reader emails I have received asking for help.
At the axis point where money and relationships cross, there are emotions, varying opinions, trust issues, and much more.
Whether your finances are combined or separated, money and the use of money will play an important role in your relationship.
People have different priorities, different spending habits, different wants, and different types of financial goals. This means that there must be a lot of compromise in a relationship.
But what if one person refuses to compromise and, worse yet, has such a spending problem that he/she undermines the financial security of a household?
What if your partner (or you) has committed repeated Financial Infidelity?
Perhaps it is time to think about some options to limit the damage.
Psst: learn how my husband and I dealt with our own money issues in marriage, and also, what changes when you get married financially.
Financial Dishonesty Definition Vs. Financial Infidelity Definition
First things first: what is Financial Infidelity, and how does it differ from Financial Dishonesty?
They're both on the same continuum of lying to your partner about your household finances. It's just that one leads to more extreme negative consequences than the other (both on a trust and money basis).
Financial Dishonesty can be defined as more of “little white lies” (not saying white lies are okay, by the way) about money that's being spent, earned, etc. within a marriage or partnership. These “little” white lies don't necessarily hurt the overall finances, but they do slowly erode away both the household money pot and trust in your relationship.
Being financially dishonest once or twice is really just a stone's throw away from committing Financial Infidelity.
Financial Infidelity definition, according to Wikipedia:
“Financial infidelity is the secretive act of spending money, possessing credit and credit cards, holding secret accounts or stashes of money, borrowing money, or otherwise incurring debt unknown or unwilling to one's spouse, partner, or significant other.”
You see how they're both essentially the same thing — it's just that the infidelity lends itself to actions that hurt your partnership/marriage and finances more than the financial dishonesty you/your partner probably started with?
Signs of Financial Infidelity
The signs of financial infidelity might be slapping you in the face, or they could be more subtle and you just haven't done a little due diligence to figure out if it's what your gut is telling you.
I'll spell these out for you, to give an unbiased idea of what might be going on in your own household:
- Covering up receipts/refusing to share them when asked
- Unknown records popping up on your credit report
- A (seemingly) sudden drop in your credit score
- Numbers not adding up in your bank account at the end of the month, despite you knowing you both earn enough + a buffer to cover everything
- Finding purchases you didn't know were made spaced out around the home, or hidden in drawers
- Creditor phone calls/voice messages that you might think, at first, are scammers or wrong numbers
- Partner not wanting to discuss anything financial with you
- Wife or husband is secretive about money
- Mail being hidden from you/you never seem to get a chance to sort through the mail
- Card being declined at checkout when you know you should have enough money in your account/credit on your credit line to cover it
- Finding out you've been removed from a joint bank account or joint credit card account
- Unexplained ATM withdrawals
You get the idea.
So…what happens when there's financial infidelity in marriage?
Psst: I created a free State of Your Financial Union marriage financial planning worksheet that you guys should go through together. Set a date, and schedule it in. This way, you'll both know what the actual numbers look like.
Financial Infidelity in Marriage
Financial infidelity in marriage can be devastating.
It can completely undermine the trust between you + your spouse.
And if one of you has already had a pattern of financial infidelity? Then it could be hard to recover that trust.
Not impossible, but hard.
Plus, it can wreak havoc on your stable financial life, or any major life goals you had that takes money to get to.
Even if you did not combine finances with your spouse when you got married, both of your financial states affect one another. So there still has to be a level of transparency (and the more transparent, the better) between the two of you.
You have a few options to deal with this, and I'd like to lay those out before discussing the most drastic option below (financially limiting your partner).
Options to deal with Financial Infidelity in Marriage:
- Get to the Bottom of WHY Your Partner is Lying: There are two sides to every store, and that's especially true in a partnership and marriage. Can you get to the bottom of why your partner is lying about the finances? Do they feel insecure with money? Did their own parents do this to one another? Do they feel too much pressure from you and your money objectives that they feel like they're being judged every time they swipe the debit card? Were they just purchasing gifts for you and didn't want to share it to keep everything a surprise? Are the financial reins too tight for their comfort?
- Reassess Each Other's Goals: You both have money goals, or life goals that will cost money, and they don't always align. Perhaps your partner's infidelity is aimed at realizing their own money goal, one you never knew they had. It's a good time to talk about how each partner thinks the money should be spent to figure out where the difference in opinions are coming from. Here are some free financial goals worksheets for couples, and 9 financial goals for married couples to choose from.
- Go to Counseling: There are two types of counseling that could be really great options for you both. Marriage counseling to work through the trust issues, the lying, and to learn how to work together better as a team, and financial counseling to really understand and get on the same page financially. Here's 11 free online marriage counselling courses.
Note that any suggestions I've discussed are not excuses for why it's okay to have committed financial infidelity in marriage. Rather, if you want to keep the marriage together + growing in the right direction, they're ways to actually understand the problems and move forward.
But you know what? It doesn't always work out, even when you have the best of intentions.
Psst: you might also want to check out how to stick to a budget as a couple.
Repeated Financial Infidelity: Should You Financially Limit Your Partner
So, what are you supposed to do when you have repeated financial infidelity in your marriage?
Depending on how severe it might be — how destabilizing it is to being able to pay your bills and provide for your children each month — you might need to take measures to financially limit your partner.
When I talk about financially limiting a partner, I am not talking about doing so because of some impulse spending, or because of a difference in opinion on the amount of savings.
These situations could cause a rift between you and your partner but they don't warrant such drastic moves.
The situation that could necessitate such a drastic move is when one person is literally taking down your family into the wastelands of financial ruin. You can’t pay your bills, you are not saving a penny towards your future, they have committed financial infidelity, or you are leaking so badly that you have repeatedly asked others for loans in order to pay off the collectors.
This kind of financial dishonesty in marriage is when such a drastic move might make sense.
Options to Mitigate the Bleeding
If you are at this point – where the financial dishonesty in marriage is affecting your household's ability to survive – then you probably are very uncomfortable already.
But invoking these options below could make you much more uncomfortable.
On top of this, you will need (or probably should seek) the permission of your partner in order to put these options into action.
Most likely this is going to cause a heated argument, so be prepared. In fact, this could be an excellent time to bring in a counselor.
No one likes to have their independence taken away (one of the perks of being an adult), even if it could be for the best of the household.
- Limit Spending to Prepaid Cards: You can cut up all of the credit/debit cards and go on a prepaid card diet. Load a prepaid gift card each month with the amount that has been budgeted for your partner to spend (you could have one card for everything, or different cards for different categories of spending). When the money is gone, hopefully the spending will cease until it’s time to reload.
- Stop Overdraft Fees on the Checking Account: The Federal Reserve Board introduced new rules in 2009 that “prohibit financial institutions from charging consumers fees for paying overdrafts on automated teller machine (ATM) and one-time debit card transactions, unless a consumer consents, or opts in, to the overdraft service for those types of transactions.” In other words, if you do not opt-in to your bank’s overdraft protection program, then your outside transactions will be denied should the funds not be available. This could create embarrassment for you and frustration on the part of people trying to debit against your account, but it will ensure that you do not incur overdraft fees from your bank. It will also stop anyone from continuing to spend on the account once all of the funds are gone.
- Open a Separate Savings Account: In order to sock away some money for your household and future needs, you can always open a savings account under just your name. This is, of course, very sneaky behavior and is a physical manifestation of distrust in a relationship.
- Consistently Check Your Credit Report: If you suspect that your partner is opening up credit accounts using your information or in a secretive manner and hiding debt from the household, then you should sign up for a service where you can keep monthly tabs on your credit report. This way you will at least know of new and/or overdue accounts before large financial damage is done (unless it is too late).
These are all very tough and very personal options to think about taking. They might not be the solution, but they could mitigate financial damage until another solution can be found.
Have you ever found yourself in this position, or know of others who have? What steps did you take, and what was the result?
Amanda L Grossman
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Sunday 19th of January 2020
I am dealing with this now, despite all measures taken, he’s still way overspending. I’ve already taken his credit cards and he’s paid off debt with money from his dad but he’s back at the same place. It’s with a business account (said business is clearly failing) and I believe at this point he’s taking money from a business line of credit. I have no access to those accounts and I’ve already paid off the line of credit once from my personal income....$30,000. That completely drained our family funds but I was convinced he would start paying it back immediately. While these ideas are all good, I don’t think any of them will help at this point. Definitely at a loss.
Adam Gottlieb @ The Frugal Entrepreneur
Thursday 16th of August 2012
I think the first step in such a situation is to get an outside mediator involved- whether it's an friend or acquaintance or it's a hired professional. This can be a very emotionally charged topic that only a small population of "worked-out" couples would be able to handle in a calm and mature way.
Once the lines of communication are open, then the couple would be in a place to consider the tips you offered above.
Amanda L Grossman
Friday 17th of August 2012
An outside mediator could be a great move. Though I would hope it wouldn't make the other person feel cornered (though they probably will feel that way and more by taking any of the steps above).
Thank you for sharing your thoughts!
Wednesday 15th of August 2012
Luckily I've never been in this situation but I have friends that have. It can be so difficult to be open and honest with your partner if you've made financial missteps which could cause the problem to continue on and maybe even escalate. However, if the couple can sit down together and explain everything while withholding judgement and then create a plan together, then that is a good first step to both correcting their collective finances and opening the lines of communication.