Money fights are the most heinous. Let’s face it: all battles are fairly bad. However, you are not alone if you and your spouse (or significant other) have been fighting over money.
When it comes to money, 41% of married couples feel conflict is practically unavoidable. That is why it is critical to have open channels of communication. Because if you and your spouse don’t talk about money, you may both wind up feeling terrible about your spending habits, lying about your spending patterns, or even worse… sliding into financial infidelity.
This post will shed some light on financial infidelity, warning signals to look for, how to overcome it in a marriage, and its implications in divorce.
What is Financial Infidelity?
Financial infidelity is when spouses with joint finances lie to each other about money. For example, one partner may conceal major debts in a separate account from the other partner. Another common example is when one partner makes substantial discretionary spending without consulting the other.
Understanding Financial Infidelity
Money may be a source of friction between couples, so each partner should be honest about their financial condition, spending habits, and attitudes about money. Before combining finances, it is a good idea to review both partners’ financial situations.
Setting up a mutually acceptable approach for handling expenditures might also assist to avert many arguments later on. Many couples, for example, set up an allowance system that permits each partner to spend a predetermined amount each month without consulting the other. This allows spouses to retain some financial freedom while working toward common financial goals.
Signs of Financial Infidelity
I’m not sure about you, but financial infidelity isn’t something I’d like to invite over for pizza night. It’s like letting a bear into your home and then being surprised when it terrorizes your brand-new throw cushions.
That, my friends, is why it’s critical to monitor your spending habits (and know what to look for).
Here are six indicators of financial infidelity:
#1. Intentionally concealing a transaction.
Relationships are built on trust, which is why (no matter what), honesty is the best policy. So, if you buy anything and keep it hidden from your husband or wife, you’re jumping into the deep end. Remember that creating a budget is the greatest way to get everyone on the same page—and spend money guilt-free.
#2. Obtaining cashback without informing your spouse.
This one may appear to be innocuous, but cashback incentives on debit card purchases can soon mount up. It could begin as a simple $10 here or $20 there. But before you realize it, you could be withdrawing large sums of money without informing your spouse. Not only will your bank account suffer, but so will their trust. Ouch.
#3. Keeping a hidden savings account.
This one is difficult. When you and your spouse agree on money, you’re probably in agreement on your financial goals. A hidden savings account will only sabotage your family’s financial ambitions.
#4. Keeping cash on hand.
I adore birthday money. I like knowing that I have my own “stash” of money that I can spend any way I want. But when it comes to stashing funds beyond presents and into stashing wages, that’s a different matter.
#5. Obtaining covert credit cards or opening new accounts.
People will sometimes open a secret credit card or bank account in order to conceal their spending from their spouse. I’ve already stated that such behavior is prohibited. In other instances, one spouse is desperately attempting to conceal a financial disaster by moving credit card balances or taking out loans to meet bills—all without informing their spouse. The damage you cause by attempting to “fix” the problem may be worse than the problem itself. If you’re in more debt than you’d want to acknowledge, there’s still hope. And now it’s time, to be honest.
#6. Engaging in dollar-for-dollar games.
Is your spouse involved in a costly hobby? Perhaps they enjoy golfing, hunting, or skydiving for recreation. Those are not inexpensive. It’s easy to convince yourself that you should be able to equal what your spouse spends on their favorite things. That is correct in theory. However, you must both agree on the strategy and incorporate it into your budget. Spending freely without informing your spouse is a risky game. If it describes you, it’s time to call it quits.
How to Deal with Financial Infidelity
It’s not the end of the world if you or your spouse have committed financial infidelity! However, you must come clean and work together to clear up the mess. There is yet hope! And it all starts with these four pillars of creating a life you love:
#1. Communicate with others.
Everything should be shared. Yes, I do mean everything. There is no such thing as overcommunication in marriage (or money). In fact, saying too much is preferable to saying too little. Not only will this help repair trust, but it will also demonstrate your (or your spouse’s) determination to quit hiding or lying about money.
#2. Get everyone on the same page.
You two! Being on the same page with your spouse is critical in almost every facet of life, including parenting, life goals, professional decisions, and so much more. Money is the one common thread that binds everything together. So, if you and your partner aren’t already on the same page (making a monthly budget together), now is the time to start.
Budgeting changes everything. It not only forces you to talk about money, life goals, and desires, but it also helps you get there. It’s okay if you’ve never done a budget together before! It is never too late to begin. Check out EveryDollar, our free budgeting app. It will guide you through the process of constructing a zero-based budget. You’ll be a pro in approximately three months.
#3. Always tell the truth, even if it means losing money.
Nothing is more agonizing than discovering that someone purposefully lied to you. And, while it’s difficult, to tell the truth when you’re carrying the weight of financial mistakes on your shoulders, it’s far more difficult to dig yourself out of a hole if you don’t. Marriage is a roller coaster ride. However, your spouse serves as your built-in accountability partner. They can help you grow, learn, and develop better habits in the same way that you can help them. It’s a lovely thing! (Is anyone else in need of a hug?)
#4. Create a budget and spend without feeling guilty.
Many people believe that a budget exists to prevent you from wasting money. A budget allows me to spend freely and guilt-free.
A zero-based budget demonstrates to your money who is in charge. That’s correct, you get to direct every single dime. And consider this: EveryDollar saves the typical household $332 in their first month of budgeting.
The Relationship Between Financial Infidelity and Significant Debt Loads
Carrying the weight of debt may make or break a relationship for many couples, especially when one partner is unaware of the other’s financial strain.
According to the U.S. News poll, more than half of couples who experienced financial infidelity were also heavily in debt. On the other hand, just 22.7% of individuals who did not suffer financial infidelity were in debt.
Dealing with your debt, or at least discussing it openly with your partner, is a smart first step toward getting on the same page. “When it comes to debt reduction, couples must agree,” Harzog argues. “You’re setting a joint financial goal, and you’ll need to work together to make it happen.”
What Should You Do if You or Your Partner Is in Credit Card Debt?
“Most major [credit card] issuers do have apps to help you track spending,” says Harzog. “Consider using a balance transfer credit card to get out of debt if you still have a very good credit score.” Reduce your spending once you’ve decided on a debt-reduction approach to help you attain your target.”
Balance transfer credit cards do not charge interest on balance transfers for a defined period of time, usually at least six months and up to 21 months. You can pay off debt without incurring exorbitant interest costs during the introductory 0% APR term. For example, both the Citi® Diamond Preferred® Card and the Citi Simplicity® Card offer an introductory 0% APR for 21 months on balance transfers from the date of the first transfer (after that, the Citi Diamond Preferred has a 17.74% – 28.49% variable APR and the Citi Simplicity has an 18.74% – 29.49% variable APR). All transfers must be finished within the first four months.
The Citi® Double Cash Card is another wonderful option that allows you to earn cash back on your purchases. This card offers no interest on balance transfers for the first 18 months (after that, a variable APR of 18.74% – 28.74%). Cardholders receive 2% cash back on all eligible purchases (1% when they buy and another 1% when they pay their credit card payment).
Remember that once the 0% APR intro period expires, interest will begin to accrue, so make sure you pay off your debt during that interest-free period.
What Should You Do if You or Your Partner Owe Money on Student Loans?
Is your spouse in need of some push to finally pay off their student loan debt?
Chipper, for example, offers a specific round-up feature that lets users chip away at their student loans by using spare change from routine transactions. This program, which should be utilized in addition to users making the minimum monthly payment on their student loans, will ensure that you are always paying money toward your debts without having to think about it too much.
Chipper can also assist you or your partner in developing a repayment strategy for student loans by connecting the user to forgiveness programs and income-driven repayment plans, which may help lower monthly payments.
Private student loan holders may consider refinancing their loans for a lower interest rate, especially now that interest rates are expected to rise in March. When you refinance your student loans, you have the opportunity to acquire a cheaper interest rate, as well as the ability to extend or shorten your loan term depending on how quickly you want to pay off your debts. This could reduce your monthly payments and save you money in the long term.
SoFi Student Loan Refinancing is an excellent choice for students who want to refinance at a reduced rate while also having some protections if their financial position changes. Applicants with a weaker credit score can also apply with a co-signer to achieve even better-refinancing terms or lower rates.
Why Financial Infidelity Frequently Causes Divorce
#1. Differences in Lifestyle
Financial infidelity is frequently caused by differences in how each partner wishes to live his or her life. For example, one partner may want to spend every last dollar on lavish vacations and designer apparel, whilst the other may want to save as much as possible. If the couple cannot agree on how to spend their money, their marriage may fail.
#2. This begs more questions.
When you discover that your partner is lying about finances, you may have questions and doubts. What else is your spouse hiding if he lied about his finances? Every marriage should be based on trust, thus when financial infidelity kills trust between a married couple, the relationship may never recover.
#3. Resentment is triggered.
Assume you are the primary breadwinner in your family and discover that your spouse has been covertly going on shopping sprees and spending thousands of dollars. In this case, you may begin to resent your spouse for frivolously spending the money you have worked so hard to achieve. When you are resentful, you may lash out at your partner, especially if you are unable to disclose your genuine sentiments. If the underlying issue is not addressed, these resentful feelings may lead to divorce.
#4. Increases Stress
Many spouses who conduct financial infidelity end up in severe debt as a result of their deception. Debt incurred during a marriage is shared by both partners, which means you are partially accountable for debt committed by your spouse behind your back. This can put further pressure on you to generate more money so that you can begin paying off your spouse’s obligations. You may need to change your household budget and cut out on pleasures to finance debt repayment. Unfortunately, some marriages are not strong enough to survive this trying time.
What if You Don’t Want a Divorce Because of Infidelity?
You can always try to persuade your partner to attend couples counseling with you. There are marriage counselors who specialize in seeking to resolve financial infidelity in a marriage. It’s a good idea to keep your funds separate while you and your husband try to work things out.
It is always difficult to realize that someone we love and trust has been deceiving us. Sometimes the problem can be resolved between the pair and other times you just have to step away before more damage is done. If you feel you cannot continue the marriage, you should seek the advice of an expert Wisconsin family law attorney. Furthermore, you should inform your attorney about the financial concerns that led to your marriage’s dissolution so that a suitable strategy can be established.
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