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What is financial infidelity, and how do I deal with it?

| Feb 20, 2018 | Divorce |

When most people think of infidelity, they think of a romantic liaison between their spouse and another person. One spouse discovers that the other has been having an affair. Sneaking around, keeping secrets and spending time with another person–it is definitely enough to strain any marriage. But romantic infidelity is far from the only type of cheating. As it turns out, financial infidelity is also common among spouses, and can also put strain on a marriage.

Financial infidelity is when one spouse hides financial activity from the other. Some examples include hidden bank accounts, secret reserves of cash, payments to paramours, offshore assets and surreptitious financial transactions. A survey from the National Endowment for Financial Education found that 40 percent of spouses admit to hiding financial activity from their partners, whether lying about bills and debt or covering up their spending habits. The frequency of financial infidelity has increased over the past 10 years and may continue to rise.

So, what are some ways to cope with a spouse who has been concealing their financial activity?

Have an honest discussion

The first step in dealing with financial infidelity is to have an honest, straightforward discussion with your partner. You may want to address your shared finances, your future financial goals and the particular issues that you have regarding their financial habits. This will not be an easy conversation, but being up-front now can prevent many issues later.

Establish clear expectations

Some spouses conceal their finances because they think that their partner would disapprove of their spending behavior. But concealing a few seemingly small transactions can eventually snowball into a much bigger issue. You and your partner should establish your expectations about what purchases are okay to make without the other person’s permission, which ones should be mutually approved and which ones are completely verboten.

Stick to it

It can be tempting to brush off financial infidelity as no big deal. In fact, it can have a major impact on your long-term financial stability as well as your marriage. Seventy-five percent of spouses surveyed who experienced financial infidelity say that it caused trust issues, arguments and even separation or divorce. It is far better to deal with the problem head-on, and to document any agreements and violations of agreements.  A Board-certified family law expert attorney can also help negotiate a binding Post-marital agreement as well as a divorce in the event an agreement can not be reached.

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