On the third anniversary of their wedding, Edwin and his wife April decided to combine their finances. They opened a joint savings account to save money and a current account to manage their bills and daily spending. Once paid, they both transfer all their salary into one account.
The couple combined their finances for one reason: Save for a home down payment. They cut unnecessary expenses and saved as much as possible to manage that. Or at least they thought.
Alost a year into the arrangement, April noticed her husband was spending a lot of money buying unnecessary gaming gadgets. He contributed his share to the joint savings account but still had extra cash to spend on his little idiosyncrasies. After a little investigation, she learned Edwin had a pay raise four months ago and concealed it from her.
April was livid. She had cut all her expenses and saved as much as possible for their goal. Meanwhile, her husband was committing financial infidelity in broad daylight. How could he?
Financial infidelity refers to the act of being deceptive and unfaithful about your finances to your partner. It is the act of hiding financial information such as income, debts, investments, etc., from your partner after combining your finances.
The hidden information usually is something that can affect your budget and goals as a couple and something your partner must know about.
Money is a sacred subject; whenever you talk about it to your partner, it's common to feel awkward and vulnerable. How you make and spend money can affect your pride and ego. It might make you more open about it or deceitful. And when in a relationship, it can fuel financial infidelity.
Let's look at the three leading causes of Financial infidelity:
Addiction: This is a significant cause of compulsive spending. Whether you are addicted to gambling, drugs, alcohol or shopping, when you combine your finances with your partner, ensure you talk about your condition. You should discuss the possibility of investing in professional help and getting long-term support. Addiction is the leading cause of secret spending and can severely hurt your family's finances over time.
Shame: Your partner might feel uncomfortable earning less than you or has a less prestigious career. This can cause them to lie about how much they make and resort to taking loans to stay in the same bracket as you. In the end, it will become unsustainable and affect your relationship.
History: Your partner's previous financial history can force them to be dishonest about their current financial situation. They might have incurred a lot of debt they are still servicing or have other obligations like paying child support and alimony to an ex-partner. Since this can be a deal-breaker when you start dating, they can choose to hide it.
Financial infidelity can exhibit itself in many forms. Some might be easy to catch, and others might fly below your nose. Either way, you should be alert for when it manifests so that you can address it before it goes out of control.
Some of these examples can appear innocent and inconsequential. But when they happen very often, it might be time to act and find a solution.
Here are examples of financial infidelity to be on the lookout for:
To prevent you and your partner from committing financial infidelity or to heal and move past it after it occurs will require patience, learning, and high-level honesty. It will require you to develop a forgiving heart and work toward putting it all behind your backs.
Distrust - Infidelity can lead to loss of trust in a relationship, and financial infidelity is no exception. When your partner commits financial infidelity, you will find it hard to trust them to run the family's finances independently. Even after you've forgiven them, you might find yourself double-checking their spending and income every once in a while.
Financial Losses - When you or your partner commits financial infidelity, your finances hurt the most. It might start slowly by emptying your emergency coffers and balloon to loss of assets like your home when you default on a loan if it was put up as collateral. It can also force you to declare bankruptcy, hurt your creditworthiness and possibly drive you to poverty.
Confrontations - One financial infidelity incident can cause many conflicts when discussing anything related to finances. You might find yourself confronting your partner about every financial decision they make.
Goals are derailed - Financial infidelity can severely affect your goals as a couple. You will be unable to meet your savings target on time, be forced to liquidate investments, etc. All this can lead to you cutting short your plans or delaying them.
Divorce - As financial infidelity persists and trust is lost, if nothing is done to rectify the problem, it can lead to couples separating.
Financial infidelity can show itself in many ways, and the damage it can cause in a relationship is unrivaled. While it is mostly harmless and easily rectified, you shouldn't ignore it when you see it.
Having the money talk often with your partner, forgiving and rebuilding damaged trust can help salvage the situation and ensure you are back on the same page financially. But in the same breath, you should know when to walk away.