How many times have you lied to your partner about money? According to a study by CreditCards.com. This is despite the fact that a third of us believe that financial infidelities are worse than physical cheating. But what constitutes financial infidelity, really? When does a financial fib – or a lie of omission – sometimes become more sinister, toxic and potentially relationship-destroying? And is the complete truth the only option to keep your relationship strong?
The most toxic lies
At its most basic level, financial infidelity is an outright lie about money or spending, but when it comes to how toxic these things are to a relationship, Jill Fopiano, CEO of O’Brien Wealth Partners and Certified Financial Planner, says you need to look at intent. Is it malicious? “I’ve heard stories of people taking their income and funneling it into a separate account, then using their spouse’s income to pay all the household bills until they’re ready to end the marriage. This is extremely malicious intent,” Fopiano says. Other examples of toxic financial infidelity might include a hidden gambling addiction or a partner who withholds money to satisfy a desire for power or control.
Do not disclose credit card debt or any other debt incurred is also high on the “toxic” list, according to Shelly Church, an advisor to Raymond James financial services in Naples, Florida. “When one spouse manages all the family money, the uninformed spouse may assume that because their lifestyle is good, they are doing just fine and there is nothing to worry about” , she says. “A recently divorced client came to me and said he had a plane, a boat, a $3 million house and everything looked good on the outside. But upon finding out about the divorce, she discovered their $3 million home had a $2.5 million mortgage and her husband had also run out of credit cards.
Why does it happen
Many people commit themselves financially infidelities for the same reasons they commit romantic ones — “It wasn’t planned, it just happens,” Church says. “And once that starts, a lot of times people end up sinking deeper than they thought they would. They think the market will save them over time, or they’ll be able to get things paid for before it’s noticed. But more often than not they can’t get out, and the hole gets deeper.
In other words, it’s very easy to dig your own grave with your financial lies, and you might even start with good intentions, says certified financial planner Kimberly Foss, founder of Empyrion Wealth Management and author of “Rich by design“Money lies can start out relatively innocently — like concealing a payment account in order to buy a surprise gift for a spouse — but the behavior often develops an aggravating effect for those who are susceptible,” she says. .with her once, it gets easier next time, and if you manage to lie about buying a $400 blouse, it’s easier to try again with a $2,000 piece of jewelry. deception has begun, it can cling to you and make it very difficult to reveal, Foss points out.
How it can ruin your life
As if the heartache of being betrayed wasn’t bad enough, the financial fallout from a partner’s lies can take years, or even a lifetime, to recover from. From a legal standpoint, you are responsible for any debt incurred by your spouse, says Fopiano. “So let’s say your spouse goes out and runs up a lot of credit card debt, or takes out loans that you’re not aware of. It’s now your debt, legally, and as a factor in your own credit score, so it could be incredibly damaging,” she says.
As if the heartache of being betrayed wasn’t bad enough, the financial fallout from a partner’s lies can take years, or even a lifetime, to recover from.
Even in circumstances where your partner is only lying about a few thousand dollars, it can have long-term consequences when it comes to your overall financial goals. “If your spouse were to make a very risky investment and end up losing money, it could jeopardize your financial future in ways you were completely unprepared for,” says Fopiano.
Solve the problem
Financial infidelities happen because couples don’t talk about money — they don’t sit and look at bank and credit card statements together, and they don’t have an open dialogue about spending. Those doors are completely closed, says Fopiano. “In many cases, when there is financial infidelity, there is one partner who is responsible for day-to-day household finances, and one partner responsible for the overall financial situation, such as tax filings and investments. The partner who is pay the bills may think they have an idea of the big picture, but they really don’t. In successful relationships, both partners have a clear view of money coming in and going out, what’s shown on tax returns, the mortgage, and all things financial. “If you’re told, ‘Sign here and don’t worry’, that’s a major red flag. When a partner limits access to information, it’s easier for them to commit financial infidelities.