5. Anxiety
Secret hoarding or spending can fulfill a deep emotional need, says Ed Coambs, a marriage and family therapist in Matthews, North Carolina, who works with couples in financial crisis. Often, he says, this behavior is not just a matter of deception but a coping mechanism stemming from childhood. Money hiders, for example, may come from families with boom-and-bust finances, never knowing whether they’d be living it up or scrimping. As adults, he says, they might revert to their childlike emotional mindset.
6. Affairs
Sexual infidelity and the financial kind can easily go hand in hand, in part because the money for the incidental expenses has to come from somewhere — secretly. But even if financial misbehavior isn’t funding the extramarital sex, they’re often linked, Vasileff says. “It’s easier to be unfaithful in general,” she points out, “because the lies create isolation in the relationship.”
7. Self-preservation
“Sometimes if your partner is very controlling, you can’t reason with that person,” Greer observes. “By siphoning off money, you are not only taking care of yourself but separating yourself emotionally from a fraught situation. Several patients I work with have filtered money given to them for the household to secretly pay for therapy.”
A money-cheating partner can leave you feeling duped and foolish. “If you’re married, you think of yourself as a team,” says one woman who, when she was 60, learned that her husband had clandestinely borrowed more than $100,000. “But when there’s financial infidelity, it’s like you’re both in this leaky rowboat, you’re rowing frantically, and your mate is seated behind you chopping holes.”
And you can pay thepenalty for your spouse’s sins. With few exceptions, that debt your husband racked up playing the ponies or betting on NFL football? Half of it is yours, says New York City divorce attorney James Sexton. (If the IRS comes after you because your spouse lied on your taxes — and you didn’t know or have a reason to know — you may be able to get relief.)
8. Shame and guilt
Not everyone commits financial infidelity because they are selfish, evil or a bad person. Embarrassment often can play a role. Vasileff, for example, recalls a spouse who lost their job and just couldn’t bring themselves to tell their partner they got fired. “The secrecy and lack of transparency is often because they have shame or guilt and they don’t know what to do with it or how to seek help,” she says. “So, they just keep something a secret until they can’t” any longer.
9. Fear of loss
Often, couples equate love with having ample assets, achieving success and living a wonderful lifestyle. So, when the financial reality doesn’t live up to the fairy tale, many spouses use deceit about money for fear of looking bad in the eyes of their partner. “They create something that’s not real,” Guinan says. “They pretend that there’s more money or things are OK when they’re not. They’re afraid to disclose [the money problems] because they may not be accepted or loved afterwards.”
How lying about money affects relationships
The biggest fallout from hiding secrets about money is the sense of betrayal felt by the spouse who is kept in the dark. “When somebody that you are connected with has betrayed you and has lied to you about what you have, I think that trust is just broken,” Guinan says. “It is destructive, and the relationship is pretty hard to repair afterwards.”
No doubt, the relationship takes a big hit when money troubles surface from hiding. The effects of financial infidelity range from arguments between partners (42 percent), to less trust in the relationship (32 percent), to separation or divorce (16 percent), the National Endowment for Financial Education poll found.
A lot of the damage results from the shift in power between the spouses. “The reason [financial infidelity] is so damaging is that money is a form of power,” says Daniel Crosby, a psychologist and chief behavioral officer at Orion Advisor Solutions. “When one partner misleads or lies to another partner about their spending, they are using coercion and exercising power unjustly.”
What to do if you face financial infidelity
Talk it out
If you suspect that your spouse has been financially unfaithful, your first step, Greer advises, is to tell your partner about your concerns in a loving way — as much as is humanly possible. “You don’t start with the accusatory ‘You,’” she says. “Instead, it’s ‘I have been thinking X. I am worrying because Y. This is how I’ve been feeling.’” Greer adds, “You might be mad as hell. But your anger, however righteous it is, will probably only lay the groundwork for more lies.”
Review financial records
Ask to see any financial paperwork — bank records, credit card bills, income tax returns or investment statements — recommends New York City divorce lawyer William Beslow. “Maybe you just require a little more hands-on analysis of the documents and facts,” he says, to confirm or soothe your fears.
Review credit reports
Get credit reports and credit scores for yourself and your partner. If you suspect he or she is lying, these are effective tools for learning whether any loans or new credit cards you don’t recognize have been taken out in either of your names — and when. If you have a financial adviser you never talk to because that’s your spouse’s job, the three of you need to sit down for what could be a painful discussion.
Be proactive
The days of letting your spouse handle the money for both of you are over. “You need to step up to the plate,” Vasileff says. “There’s no excuse for financial illiteracy.” It’s time to find out where the hidden money is, how much the gambling losses or overspending has set you back, and how much debt you’re mired in. Now’s also the time to find out exactly how much you have in your savings and brokerage accounts or 401(k)s, and how much you owe on the house.
Hire a forensic accountant
If the numbers don’t add up or you can’t figure out on your own the true state of your and your partner’s finances, consider hiring a forensic accountant to do the digging for you to help expose financial issues hidden in the dark, Guinan advises. Forensic accountants are trained investigators who help solve complicated financial cases. “If your partner or spouse is not willing to cooperate and share [accurate information], then that is the way to go,” she says.
Warning Signs of Financial Infidelity
Experts share tips for spotting misbehavior with money
Financial deception
“You suddenly see that bank account statements are no longer being sent to your residence. Or your spouse has established a post office box to which credit card statements are being sent.” — William Beslow, attorney (clients include Nicole Kidman)
Lack of transparency
“If the financial statements come in and he says, ‘I’ll take care of it.’ I can see the husband not wanting to give a wife anxieties about money … but you have to let everything” be seen. — Raoul Felder, attorney (clients include Rudy Giuliani)
Intentional isolation
“Your spouse doesn’t let you have contact with your accountant. You would be absolutely floored to know how many people I have seen in their 50s who have never signed a tax return, yet they’ve been filing joint tax returns for the entirety of their marriage.” — Laura Wasser, attorney (clients include Angelina Jolie)
Digital secrecy
“Your passwords are changed for your online accounts and your spouse doesn’t tell you.” — Pamela Meyer, fraud examiner (author of Liespotting: Proven Techniques to Detect Deception)
Suspicious financial behavior
“Things that are out of the ordinary. Unusual transactions you wouldn’t be expecting, such as large cash withdrawals, or if your spouse sets up new accounts in their name alone.” — Donald Schiller, attorney (clients include Robert Pritzker)
— by Emily Paulin
Financial infidelity doesn’t always lead to divorce
While serious financial breaches often end in divorce, couples can and do survive. Such was the case with Sharon, now in her 60s, a former executive in Los Angeles. Early in her marriage, she’d had an affair, but she and her husband, Travis, stayed together. Years later, when they were both unemployed, Travis caused them to lose most of their possessions, which were in storage; he'd failed to pay the monthly fees, then secretly tried to catch up but couldn’t bring himself to tell Sharon about the shortfall until it was too late. The two, still struggling financially, remain married. “I must forgive him,” she says, “as years ago he forgave me.”
After all, there’s more to a relationship than money — though money can say a lot about a relationship. After Carol divorced her shopaholic husband, she fell in love with Alex, who is her spouse now. One thing that attracted her to Alex, she says, was the respect he had for her feelings — including, crucially, her feelings about spending and saving money. “Only then did I realize how little I had been cared for in my first marriage,” Carol says. “Someone who doesn’t consider how their financial behavior affects their partner isn’t behaving in a loving way.”
* Names have been changed to protect the privacy of interview subjects.
