Understanding Financial Infidelity And Why It Occurs

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When we talk about infidelity, it’s important to remember that being unfaithful means one entirely different thing to one couple versus another. For some, cheating means flirtatious messages over any medium (text, email, DMs), while others don’t see it as cheating until something physical has occurred. However, no matter where the boundary is for you, most people can agree that what you don’t want is long-lasting consequences. When looking at romantic infidelity, long-lasting consequences can mean incurable STD results from the cheating. Or a child. These are unintended consequences of what may have been a brief indiscretion that will then impact the couple forever. When you think of that, you might agree that, aside from details of “What exactly happened?” the worst type of cheating is that which results in everlasting consequences.

Financial infidelity is also a type of cheating that can have consequences that follow a couple for a long time. Perhaps for their lifetime. An investment gone wrong can mean a retirement fund down the drain. Small secret purchases over time can lead to savings that aren’t there but were needed. But financial infidelity isn’t always so cut and dry. There’s a lot to learn about it. We spoke with Dr. Nicole Garner Scott, financial coach and CEO at Amount Financial, about this complex issue.

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How common is financial infidelity?

“There have been a few academic studies that have estimated that as many as 41% of American adults admit to hiding accounts, debts, or spending habits from their spouse or partner, so almost half of America is dealing with this,” states Dr. Scott. One survey conducted by CreditCards.com found that 44 percent of individuals are hiding a checking, savings, or credit card account from a significant other.

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How does it start?

“For some, financial infidelity can start small, for others, it could be out of an act of revenge, and for others, it is a life pattern of hidden secrets and a toxic relationship with money overall,” says Dr. Scott. Speaking to Dr. Scott’s comment about some individuals committing financial infidelity as an act of revenge, it’s worth noting that one poll found 60 percent of people feel that financial infidelity is at least as bad as, if not worse than, romantic infidelity.

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Why is it so common today?

“Financial infidelity is easier to conceal in today’s day and age because of technology. You can sign up for the accounts or make large purchases without anyone outside of yourself having to know,” notes Dr. Scott. “The statements come directly to you via email, there’s no paper trail and there’s a level of secrecy that these current times have cultivated.”

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What types do you see the most?

“Every couple might differ in how it defines financial infidelity, the same as how things may differ with the definition of relationship infidelity,” states Dr. Scott. “Cases that come up quite often in my financial coaching practice often involve hiding compulsive online shopping (rushing home to hide boxes delivered before their spouse arrives) or gambling debts. In others, a spouse might siphon off cash from the family’s funds for a secret purpose and the lack of communication starts to spiral.”

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What makes it such a betrayal?

“When the deception is exposed, it often evokes feelings of betrayal and loss of trust that can lead to the breakdown of the relationship,” says Dr. Scott. “Money signifies safety, trust, building together, and believing in a shared dream. That is why money fights are nastier and last longer and why financial lies cut deep.”

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Is there a form that isn’t about buying things?

“Many couples tend to deal with money infidelity when it comes to breaking boundaries by constantly lending money to family and loved ones. [That’s] money that takes away from the immediate nucleus and prevents goals from taking place,” says Dr. Scott. Black individuals may be particularly at risk of giving money meant for their marriage/relationship over to relatives if they feel pressure as first-generation wealth builders in their families to take care of their relatives.

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Is there an emotional incentive?

Dr. Scott informs us that, “Many people justify financial unfaithfulness because there’s a disparity in income or they feel deficient. Giving money to family members might be the way they fill a void of not being loved, opening a secret credit card to fund a business might be a way that they cannot deal with a failing idea, etc.”

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What are other possible incentives?

“People keep financial secrets from their partners for a variety of reasons. Most often, they’re simply trying to avoid getting into a fight over money. Sometimes, however, hiding money secrets can be a symptom of a deeper problem in the relationship, such as fear or lack of trust.

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Can it be linked to another form of cheating?

“In other cases, the spouse who hides money is doing so to cover up something else, such as addiction or a sexual affair or something they are desperately not trying to let come to light,” says Dr. Scott. “Some common issues include conflicting goals, embarrassment or guilt, addiction, resentment, and fear.”

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How do financial beliefs and values play a role?

“Many couples enter into the union of finances with completely different thoughts on how to save, how to spend, and what money symbolizes to them,” says Dr. Scott. She adds that they may also have, “Completely different triggers and traumas surrounding money, and even for some, levels of shame and toxic behavior surrounding the topic of money.”

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How might it be avoided?

“When it comes to long-term financial planning, some couples can feel betrayed when their significant other has different thoughts on estate planning, retirement planning, trust funds, and more,” says Dr. Scott. That brings up another interview we did with her, about normalizing financial talks in your relationship, to hopefully avoid issues like these.

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What are the emotional consequences?

“Financial infidelity can cause just as much harm in a marriage as cheating on your spouse,” states Dr. Scott. “When lies about money come to light – as they tend to do sooner or later – they often lead to arguments over money, loss of trust, and even divorce for many. It becomes suffocating if one spouse is constantly trying to plan for the future and the other spouse is consistently going backward.”

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How does it harm open communication?

“Financial infidelity hurts couples in two ways. The first is a break in trust. In a relationship, people have to be able to count on each other, and that’s not possible when one partner is lying or hiding important information from the other. Dishonesty is a problem that cuts both ways…”

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You’re not just dishonest; you’re untrusting

“When you hide financial matters from your partner, you’re showing that, on some level, you don’t trust them enough to be honest with them,” notes Dr. Scott. “Sooner or later, the deception is bound to come out, and when it does, your partner won’t trust you, either.”

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Even small purchases can be a big problem

“When the deception has to do with money, it has financial consequences of its own. Even minor deceptions, like a few secret purchases, can cause your household budget to fail,” states Dr. Scott. “When you’re trying to get by on a tight budget, it’s important to know exactly where every dollar is going, and there’s no way to do that when one partner is making secret purchases.”