Financial infidelity is defined as consciously or deliberately lying to a romantic partner about financial behavior. It is not occasionally forgetting to record a check or debit card transaction. It’s a situation when one partner intentionally hides a money-related secret from the other, expecting that it would be disapproved of. Second, it’s failing to disclose this information to a partner.
For instance, when Sarah, 38, failed to tell her husband Tyler, 37, that she had been loaning money to her younger sister, Kayla, this is financial infidelity. Sarah felt sorry for Kayla because she was going through a divorce and she needed money to rent an apartment. She didn’t tell Tyler about loaning Kayla $1,000 because she didn’t have confidence that he would approve of it and be understanding.
Garbinsky et al (2020) found that financial infidelity can take the same emotional toll as physical or sexual infidelity. In addition to the feelings of being wounded by a partner who was betrayed and has broken trust, it can leave a family without financial security.
Romantic relationships are built on trust, but partners are not always honest in their financial behavior – they may hide spending, debt, and savings from one another. Financial infidelity can generate suspicion and resentment between partners. It can even shatter trust, and if it doesn’t stop, the fabric of a marriage or committed relationship can be damaged.
In 2024, The National Endowment for Financial Education (NEFE) found that 2 in 5 (43%) of US adults who ever combined resources, confess to having committed some act of financial deception and 85% of those people said it affected their relationship in some way.
Why Does Financial Infidelity Go Unnoticed?
Sometimes, financial infidelity goes unnoticed for years, while in other cases, a partner may suspect it’s happening but use rationalization or denial because they have trouble believing that their loved one would be deceitful. This is especially true during an early period of marriage when couples tend to wear rose-colored glasses and want to see the best in each other. This can cause people to overlook mistakes or flaws in their partner’s character.
Married for three years to Sarah, Tyler puts it like this, “I felt quite betrayed when I found out Sarah was keeping secrets. She tried to convince me that I was a selfish person for questioning why she was loaning money to Kayla. I felt so angry when I discovered she had been skimming money from her paycheck and hiding it in a secret account to use for her own purposes. And, all along we’ve been struggling to pay monthly bills because Sarah said she wasn’t able to pay her share of them.”
In other cases, a couple may have a two-pot money management system, which means they keep their incomes, payments, bills, and debts in two separate checking and savings accounts, and pay for all childrearing and household expenses on a fifty-fifty basis. When necessary, couples who use this system might contribute to a third account to pay for nonessentials like a family vacation. If couples don’t have transparency and have regular money talks, it’s easy to see how financial infidelity can go unnoticed.
Why Does Financial Infidelity Happen?
Unfortunately, ongoing friction in an intimate relationship or marriage can lead to financial infidelity, such as hiding purchases or debt from a partner. In some cases, partners loan family members (or other people) money and conceal this information from their partner. They might rationalize their behavior because they believe their partner wouldn’t approve of it and they don’t consider it to be dishonest.
Often financial infidelity can be an indication of deeper issues in a relationship. As with Sarah and Tyler, it can have roots in feelings of mistrust, insecurities, and a need for protection or control. Like many couples, they rarely spoke about their finances and they had separate checking and savings accounts. As a result, it was easy for Sarah to feel entitled to loan Kayla money and to believe it was unnecessary to tell Tyler because she earned the money, and it was her personal checking account.
How to Heal From Financial Infidelity
The first step in healing from financial infidelity is admitting that there is a problem and fostering a willingness to get help by a professional. Both people in a relationship need to be honest about their financial mistakes in the present and in the past, so that they can truly repair the damage done. That means bringing out every statement, credit card receipt, bill, checking or savings account statement, loan, or other evidence of spending.
Next, both partners need to make a commitment to work through issues together. The person who was betrayed needs time to adjust to the details of the breach of trust and this does not happen overnight.
Additionally, the person who is the perpetrator of the financial infidelity needs to be completely transparent and willing to take responsibility for their behavior. They also need to make a promise to stop keeping secrets about money. This means changing their daily habits of spending and/or hiding money, lending money to others, or even gambling.
If your partner keeps secrets about money, it’s normal to feel frustrated, angry, or resentful and to criticize them. Instead, do your best to avoid conversations which involve blame, defensiveness, accusations, and personal attacks.
According to Dr. John Gottman, criticism is one of the main causes of divorce and can have a devastating effect on a relationship. Remember that a complaint is different from criticism. For instance, this is a complaint: “I’m upset because you didn’t tell me that you purchased a new bike and charged it. We agreed to discuss nonessential credit card purchases, and money is tight right now.” This is a criticism: “You never tell me the truth. How can I trust you?” Remember that criticism might cause your spouse to be highly defensive, escalate conflict, and even destroy your relationship.
Ways to Deal With Financial Infidelity in Your Relationship
1. Make a commitment to full disclosure about finances.
Don’t expect that your conversations will go smoothly at first. Keep in mind you will be discussing emotions as well as numbers. If you’re the perpetrator, you need to share details about your past and current debts and secret accounts, as well as spending habits. You may need to do this by showing your partner bank and credit card statements, and having weekly check-ins until the tension between you lessens and some level of trust is restored.
2. Make a commitment to monthly money talks.
Check in with your partner on a regular basis to rid yourself of debt and spending habits that are contributing to any financial problems in your marriage. During these discussions, review your joint budget and actual spending. Adjust your spending if needed so you can achieve financial health. Spending less than you earn is an important first step.
3. Consider couples therapy.
Sometimes people are less defensive and are more motivated to change behavior, such as financial infidelity, if a third-party shares information and insights. In most cases, a couples therapist (and a certified financial planner) can help to educate you and your partner about how to have transparent and easier money talks. They can show you how to become true financial partners who adopt a mindset of “us against the problem” rather than “us against each other.”
Financial infidelity can have a negative impact on a couple emotionally and financially. When a couple has poor communication skills and they’re dealing with financial infidelity, this can be a disastrous for a relationship because it destroys trust and intimacy.
The good news is that by tackling the challenges that come with financial infidelity head on, you can restore trust and repair your marriage or committed relationship. Keep in mind that conversations about money can easily escalate into high conflict. Consider working with a couples therapist who can facilitate low-conflict conversations about money.
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