Financial Infidelity: How to Spot It and How to Respond

Infidelity is any action that breaches an unspoken or explicit agreement between two partners.

We’ve all heard stories of romantic infidelity. One spouse cheats on the other, leading to a destructive breach of trust and in many cases, the end of a relationship.

But what happens when the cheating is financial?

Financial infidelity happens when someone deliberately lies about money to a spouse or partner with whom they share joint finances. This type of dishonesty can be as harmful to a relationship as romantic infidelity and it’s a lot more common than you may think.

In 2021, 2 in 5 Americans admitted to financial indiscretions^[1] against their partner.

In this article, we’ll look at the most common signs of financial infidelity, why it happens, and how to overcome it.

What Is Financial Infidelity? 

Just like romantic infidelity, financial dishonesty in a relationship includes certain transgressions that are done without your partner’s knowledge. These include lying about your financial decisions, debt, or hiding any financial information your partner should know about. 

For example, regularly swiping money from your joint savings account to fund a compulsive shopping addiction is a common example of financial infidelity. That doesn’t mean one pair of shoes you bought on sale and stashed in the back of your closet is a crime. However, repeated or large-scale financial infidelity can lead to a loss of trust, arguments, or the end of a relationship.

Let’s explore other common ways financial infidelity can manifest in a relationship:

• Making significant purchases without telling your partner or lying about the true cost of your purchases
• Accumulating debt without telling your spouse 
• Lying about how much you earn and keeping a large portion of it to yourself
• Keeping secret bank accounts, credit cards, or loans
• Hiding cash from your spouse
• Hiding an addiction like gambling or shopping
• Taking money out of your retirement funds or investment plans without consulting with your spouse 

You may have noticed that all these behaviors have one thing in common — your partner would probably not approve of them, which is why many people keep them a secret. 

Common Warning Signs of Financial Infidelity 

Unfortunately, it’s increasingly easy to hide debt, overspending, and many other financial wrongdoings. Sometimes, your intuition and a few telltale signs are all you have to help you spot financial infidelity. Here are some common warning signs to look out for: 

• Frequent cash withdrawals: Noticing consistent significant cash withdrawals from your joint accounts that your spouse can’t account for. 
• Defensive behavior: Your partner becomes defensive, silent, or changes the topic when you bring up finances.  
• Secretive behavior: Your spouse starts acting secretive about their banking information, bill payments, and anything else involving money. For example, if they rush to check the mail every time it arrives, they could be hiding a secret credit card bill or loan they don’t want you to know about. 
• A lifestyle change: Although there’s no change in their income, your partner is spending more than usual on trips, gifts, or other lavish discretionary purchases. 
• Removal from an account: Your partner has removed your name from a joint account or credit card without telling you.

All of these are indications that something is wrong, and financial infidelity is likely to be part of it.

Why Does Financial Infidelity Happen

Although financial infidelity hurts the person on the receiving end of it, most people don’t engage in this harmful behavior to hurt their spouse. People usually hide their financial transgressions because they’re ashamed of what their partner might think and want to avoid a potential confrontation.

Money has always been an almost taboo subject among many couples in the US. A 2018 Fidelity survey found that 34% of cohabiting couples didn’t know how much money the other earned^[2]. Another study found that married couples in particular talk about money the least^[3]. 

The discomfort of money-related conversations, especially when you’re ashamed of your actions, encourages financial dishonesty. And the deeper the hole you dig for yourself, the harder it is to come clean. 

Other times, financial infidelity can be a lot more toxic. According to a Journal of Financial Therapy survey, some people use financial manipulation to gain power over their partners. When this happens, financial infidelity can become financial abuse.

☝️ Financial abuse happens when one partner controls the other partner’s access to financial resources in an attempt to gain power or control. For example, one partner is in charge of all the finances and uses their spouse’s paycheck for their own benefit without asking. 

How Financial Infidelity Affects Relationships 

For this to work there needs to be total financial transparency. When you deliberately choose to hide your financial habits from your spouse, you’re no longer looking out for your mutual interests.

This breach of trust causes a lot of financial stress in a relationship. For example, if you have a gambling problem and accumulate a lot of debt, your debt also becomes your partner’s debt. Your financial infidelity will likely jeopardize their financial security too. 

Financial infidelity also puts a big strain on a marriage, leading to arguments and a loss of trust. According to the earlier Journal of Financial Therapy survey, 76% of married couples say financial dishonesty negatively affected their marriage and 10% got divorced over it. 

How Should Couples Deal With Financial Infidelity?

To overcome financial infidelity, the partner committing it has to come clean and take full responsibility for their actions. They also need to be willing to take the necessary steps to change their behavior and work through their problems. 

Some participants in the Journal of Financial Therapy survey said opening up to their partners and taking ownership of their financial mistakes led to more proactive communication and even brought them closer.

That being said, overcoming financial infidelity doesn’t happen overnight. If you’re the one who’s been lied to, you’ll feel deeply hurt and betrayed. You might begin to question your relationship. If they’ve lied about this, what else could they be lying about? Getting to a place of forgiveness and learning to trust your partner again takes time and patience.

Consider these steps if you’re decided to work together to overcome financial infidelity:

1. Have Regular Money Conversations and Check-Ins

The only way to repair the trust that was broken and build a solid foundation for your relationship moving forward is through regular and open dialogue. The more you do it, the less of a taboo the topic of money will become. 

Start with conversations about lighter financial topics and work your way up to more difficult conversations. Here are some topics to consider talking about: 

• How to budget money going forward 
• How to get out of debt 
• Your spending habits
• Short-term and long-term financial goals 
• Your relationship with money 

The goal is to get to a place where you’re both financially in sync. If you’re in the habit of being open about money you’re less likely to hide money issues.

2. Consider Counselling 

Moving past a financial betrayal and reconciling is often difficult. If you’re struggling to overcome this together, consider financial therapy. A financial therapist or counselor has the tools and expertise to help you and your partner work through your emotions together and repair the trust that was broken. 

Doing deep, introspective work with the help of an expert can help you make meaningful changes in your relationships and your behavior around money. 

3. Build a Recovery Plan Together  

If financial infidelity has caused some debt to accrue, you’ll need to work together and come up with a debt repayment plan. If your spouse has maxed out multiple credit cards, for example, you could use the avalanche method to pay off the card with the highest interest rate first. 

4. Have Full Transparency Moving Forward 

To move forward, you need to ensure you have access to all your unfaithful partner’s accounts and that there are no more secrets between you. 

If your partner was the only one in charge of the finances until now, it’s time to change that. You need to be aware of the money that’s going in and out and every other financial household matter.  

Should You Forgive Financial Infidelity?

Choosing to forgive a financially unfaithful partner is ultimately a personal decision. 

Your decision might depend on how severe the infidelity is. A partner with a shopping addiction is different from one that steals your personal identity, takes out loans in your name, and ruins your credit score. 

Or maybe you’ve already tried to forgive your partner but they continue to hide things from you and don’t show remorse or a willingness to change. 

If you can’t move forward and the relationship is irreparable, it’s perfectly acceptable to end things.

How Can Financial Infidelity Be Avoided? 

As we touched on earlier, not talking about money is one of the biggest financial mistakes couples make. 

To prevent financial infidelity from rearing its ugly head, experts suggest having an honest conversation about money before you tie the knot. 

In our article The #1 Money Question to ask Ask Before Marriage, we’ve asked a panel of relationship experts and finance professionals the best questions to ask your partner before marriage. Asking the right questions before the big day helps you build a strong foundation for your marriage and ensures you’re on the same page regarding finances. 

For instance, asking each other how much debt you have can prevent harmful secrets from being kept. Fidelity reports that 74% of millennial couples brought dept into the marriage, and 46% admitted debt hurt their relationship. 

Once you’re married, it’s equally important to continue having regular financial check-ins. Research has found that couples who talk about money regularly have a more satisfying relationship^[4]. For example, set a household budget to manage your finances and have monthly budgeting meetings where you go over everything as a team. If a problem arises, nip it in the bud before it escalates. 

💡 Make financial conversations a judgment-free zone where open and honest communication is encouraged. People who are afraid of getting negative reactions or starting a fight are much more likely to hide a financial issue.

Final Thoughts 

Financial infidelity can be just as devastating as a romantic betrayal. 

The best antidote is honest and frequent communication around money. If you’ve decided to move on, start rebuilding a solid foundation for your relationship and break the taboo of money conversations.