If your partner is financially two-timing you, it could mean there’s a bigger problem in the relationship. Read on to find out what experts have to say about financial infidelity.
According to CreditCards.com’s latest financial infidelity poll, 44% of those surveyed are hiding a checking, savings or credit card account from their partner, have secret debt or are spending more than their partner would think was OK.
A mere 19% of respondents came clean in last year’s poll, but we asked only about secret checking, savings or credit accounts – not furtive debt or unbridled spending – which likely accounts for this year’s bigger percentage of those who fessed up.
In addition, this year’s survey revealed that millennials are much more likely than Gen Xers and baby boomers to have committed some form of financial infidelity with their current partner.
Financial infidelity inevitably leads to mistrust within a relationship, said Carissa Coulston, a clinical psychologist and author of a relationship blog for The Eternity Rose.
“Once it is discovered, the victim of infidelity often finds him or herself questioning what other secrets are being kept – then, suspicion begins to cloud the relationship around issues that don’t even involve money – and arguments become frequent,” Coulston said.
Morghan Leia Richardson, matrimonial partner at the firm Davidoff, Hutcher & Citron LLP in Manhattan, said finances are still one of the key stressors in any marriage that can lead to divorce.
“I often think that the marriage vows should come with a financial disclosure form,” Richardson said.
Financial infidelity poll: key findings
Here are some other major findings from our latest financial infidelity poll:
- Financial hanky-panky is rampant: According to the survey, 44% of those who are currently married, in a civil partnership or living with a romantic partner have been financially unfaithful. That includes keeping a secret checking, savings or credit card account; carrying secret debt or spending more than their partner would want. Breaking that down, 17% kept a covert account and 12% have secret debt. And 34% of all respondents have spent too much on the sly.
- Millennials are carrying on the most: Fifty-seven percent of millennials have deceived their partners financially, compared to 45% of Gen Xers and 37% of boomers. And secret spending is millennials’ biggest area of financial deception (42% versus 37% of Gen Xers and 28% of boomers).
- Reasons people cheat: The biggest reason respondents gave for financial cheating was to maintain privacy or the desire to control their own finances (36%). A large percentage claimed they just never felt the need to share (27%) and some said they were embarrassed about the way they handle money (26%). And those in the highest income bracket were most likely to use the last excuse (39%).
- Many believe financial cheating is worse than having an affair: Twenty-seven percent of respondents said financial infidelity is worse than physically cheating and 30% said it’s about the same.
- Lower-income households judge more harshly: Thirty-three percent of the lowest-income households (under $40,000 per year) think financial infidelity is worse than physically cheating, compared to 21% of the highest-income households ($80,000 per year and higher).
The survey of 2,501 U.S. adults was conducted online between Jan. 2-6, 2020. See survey methodology.
Partners are sometimes reluctant to talk about finances
“Financial infidelity is still very much present in relationships, which indicates how difficult it can be for partners to communicate with each other about problematic areas of their finances,” said Thomas Faupl, a San Francisco-based marriage and family therapist and specialist in financial therapy and coaching.
Issues of trust, safety and control come up around finances and partners often don’t know how to talk about their feelings. For some, it’s just easier to keep financial secrets rather than be transparent and take the risk of being judged, shamed or finding oneself in an all-out conflict about money with their partner, Faupl said.
Coulston said there are several reasons why an individual may hide spending from their partner or hold a secret bank account. For instance, one partner may have plans of which the other disapproves, such as going back to school or spending money on family members and friends.
Another potential reason is that one partner is irresponsible with money – for instance, he or she may be a compulsive shopper or have a gambling addiction – and it compels the other person to hold a secret bank account for safekeeping.
Millennials likely have a sense of ‘yours vs. mine’
Ted Rossman, industry expert at CreditCards.com, said financial infidelity is most common among millennials because they’re much more likely than Gen Xers and boomers to have divorced parents.
“Living through that experience probably caused many of them to be more protective of their own finances,” Rossman said.
Millennials are also getting married later than previous generations, so their financial habits are more deeply ingrained – and they’re more likely to be in relationships where both partners are working, he added.
This scenario can foster a sense of “yours versus mine.”
“Yours, mine and ours can work if you agree on the parameters, but not if one person is hiding secrets,” Rossman noted.
Millennials who are getting married these days are far more likely to enter into prenuptial agreements that clearly define what is separate and marital property, according to attorney Richardson.
They are typically more willing at the beginning of the marriage to discuss how much of their wages they will use to support the relationship goals, while carving out personal finances for themselves, she said.
“Still, many millennial divorce cases that I’ve handled involved couples who grew up during years of historically high divorce rates and therefore they set ‘secret’ money aside ‘just in case,’” Richardson said.
These divorced millennials have learned to protect themselves from the mistakes they’ve seen their parents and grandparents make, she noted.
Financial deception can be as harmful as physical cheating
Financial infidelity has the potential to be as harmful to a relationship’s health and longevity as sexual infidelity, said Emily N. Garbinsky, a marketing professor at the University of Notre Dame who studies financial decision making in relationships.
One could also argue it’s easier to engage in financial infidelity than sexual infidelity, she said. Physical cheating requires directing advances and emotional resources to a third party, whereas financial infidelity can be done alone. A partner can secretly save money to buy something for personal use, Garbinsky noted.
Garbinsky always advises everyone, especially women, to have a $5,000 “slush” account or line of credit in case of emergency.
Not only does it protect you from unexpected shortfalls and give a sense of security, but it allows you to put a retainer down on a divorce lawyer, she said.
The dividends of lying compound over time
“The group with the greatest risk right now for divorce are those who are 55 years and older – also referred to as ‘The Gray Divorce,’” attorney Richardson said.
Richardson noted that discovering secrets early in the marriage may be an event that you can weather, but finding out after decades that financial infidelity was ongoing can be a death knell for the relationship.
“Imagine going to retire and discovering your spouse of 25 years has accumulated so much secret debt that you will need to keep working well beyond what you expected,” she said.
Richardson talked about one of her cases in which the husband drained his pension to purchase properties in Florida that have since rapidly depreciated.
Her client was facing not only divorce but also bankruptcy.
“Older couples need to be actively involved in how their money is being used to protect against such a nasty surprise,” she advised.
Richardson has also handled a number of divorce cases in which one spouse was blindsided by their partner’s extensive debts – and when those cases involved children, the quality of everyone’s lifestyle was compromised.
People hiding their spending may be simply trying to avoid a fight over that new pair of Jimmy Choo shoes they know their spouse wouldn’t approve of, but over time the dividends of lying compound, she said.
See related: Carrying debt while approaching retirement on the rise
Talk with your partner about the hard stuff
It’s important to discuss your thoughts and feelings with your partner if you are a victim of financial infidelity – and seek professional help as a couple if you cannot work through it alone, Coulston said.
Faupl said it’s crucial that couples find time to talk about their values, successes and difficulties around money to find where they have common ground and where they don’t.
Rebuilding trust takes time, and both parties need to be patient, supportive and committed to finding a solution, Coulston added.
CreditCards.com commissioned YouGov Plc to conduct the survey. All figures, unless otherwise stated, are from YouGov Plc. Total sample size was 2,501 adults, including 1,378 who are legally married, in civil partnerships or live with their romantic partners. Fieldwork was undertaken online from Jan. 2-6, 2020.