What’s Financial Infidelity?
Are You Cheating On Your Spouse… With Money
When you make a promise to love, honor and cherish another person, the faithfulness implied doesn’t have a thing to do with money. Still, according to Long Beach, Calif.,psychotherapist Tina Tessina,also known as Dr. Romance, money is one of three things — along with sex and kids — that cause the most arguments in a marriage.
Tessina, who has written a book on the topic, says if you’re not careful, lying to your partner about money — known as financial infidelity –can end up making your marriage miserable. And in today’s tumultuous economic times,losing your trust in your partners ability to handle money can be an even tougher pill to swallow.
“The U.S. economy is still facing challenges to economic growth, but no matter what stage the economy is in, building trust with your partner concerning finances is a process that can be managed and remains imperative at all times,”according to Steve Paskal and Laura Hyman,accredited wealth managers and certified divorce financial analysts with RBC Wealth Management ofNew York.
Unfortunately, trust is not something that all married couples have when it comes to their money. According to a 2007 survey by online payment company, PayPal, 82 percent of those who were interviewed said they lied to their spouses about shopping purchases. A majority of those surveyed said their spouse was using money to control their relationship.
A big issue for marriages, according to certified divorce financial planner Cynthia Anderson Thompson,MBA,is when spouses have varied money management styles — saver, hoarder, spendthrift, etc.”How couples handle finances while they’re married usually reflects attitudes and habits they formed long ago, observing their own families,” Thompson said. “The problem is bad enough when their styles don’t match.Then proactive financial planning, budgeting, discussion, counseling and self awareness often can help if the spending is just about spending, and the partners are open to honest discussion, compromise, etc.”
Paskal and Hyman advice that couples to make financial decisions as a team: “In all situations, and especially with disproportionate earnings between partners, steps should be taken so that both partners have equal knowledge and authority of their system for spending and saving. It is important to have a discussion identifying the ‘values’ each person attaches to their finances and how they can work together to achieve those goals. Making financial decisions as a team from the beginning ensures that both partners have equal knowledge. This increases the level of trust between them and provides a system of checks and balances.”
When this doesn’t happen,couples usually end up with more than financial problems – they usually end up contemplating divorce,Thompson said. That’s because they’ve discovered– but not discussed — the fact that one of them is an excessive spender and the other then becomes a secret saver in response. “When that mismatch of styles is not discussed, respected, analyzed, acknowledged, when it’s discounted, belittled or ignored, when the spending spouse has no ability or real intention of changing her or his actions to help meet the financial/emotional needs of the other, whether it be for security, investment or savings, then you have a classic standoff. His need to spend, invest, provide, as he alone sees fit, versus her needs for security, investment,savings,” Thompson said.
Divorce360 experts call this “financial infidelity” or lying about how money is being spent. “…A married person who habitually spending more he makes and runs up debt or borrows from future earnings, retirement, whether it’s hidden or not, and knows that this is contrary to his spouse’s wishes, is being unfaithful to the health of the marriage relationship.He is demonstrating a lack of respect, reciprocity, prudence, honesty, especially if he knows that that style of money management is distressing to his spouse.That’s why he may hide spending or he may do it without hiding, but saying ‘I’m the boss tough about your feelings on the subject.’Either way,it’s a kind of financial infidelity,” Thompson said.
According to a 2005 HarrisInteractive poll of almost 1,800 people, about one in three adults had lied to their significant other about how much money they spent on themselves or their children. About one in four adults called this kind of infidelity worse than sexual kind. The problem, according to Divorce360 experts, is that it can lead to bigger lies, large debt and possibility emotional cheating as well.
Wealth managers Paskal and Hyman said: “Imbalances in financial power or equity often occur when a marriage’s authority is divided by traditional role models, income disparity or discrepancy in the level of financial knowledge. The stress of an economic downturn can lead to potentially counter-productive behaviors becoming more exaggerated and apparent during those times.”
Thompson said that imbalance usually ends a couple in divorce court: “What we often see in the divorcing arena: one spouse is both the major earner and an out of control emotional”spender who refuses, even after counseling, many many pleas, conversations, begging “ to reign in his spending. And in fact, he believes he’s entitled to spend, since he’s the main breadwinner. It’s a recipe for disaster and a leading indicator of marital unrest. Eventually, the fights often escalate to either divorce or wanting to divorce.”
“What is the other spouse left to do?Run in the red each and every month? Take on more debt? Save nothing? Live on the financial edge all the time? Or does she try to save back some money for the rainy day that will most likely come, either in secret or not. What if she informs him of the special account “ saved for a trip they might take together, but he demands she empty the account for him to pay back taxes he refuses to set aside for the third year in a row.Or does she in this instance, begin a plan of saving almost out of desperation? If it’s switched in gender, why should his need for saving for the future be trumped each and every pay period by her need to spend?,” Thompson said.
Certified Public Accountant Noah B. Rosenfarb of New Jersey suggests to couples that they use a software package like Microsoft Money or Quicken because those programs can help couples “keep tabs on income and expenses.More importantly, it will highlight if there’s a sudden change in either income or expenses.Both spouses should review the information together, even if only one is responsible for inputting and maintaining the information.Of course, the software could be manipulated to hide information, too, but at least there’s a higher degree of confidence than not using anything to track income and expenses.”
The only way to solve the problem of financial infidelity is commucation, trust, compromise and cooperation, Divorce360 experts said.”Communication begins as partners get to know one another,” said Paskal and Hyman. “Trust grows as we talk and share information about ourselves. There is a feeling of trust and cooperation when each partner has an equal opportunity to participate in the financial decisions, which typically leads to the most successful strategies. You can build trust by being open with your partner about your spending habits, your goals and your strengths. The power of listening will build trust between you and your partner as you actively participate in hearing what their needs and wants are financially.”
Without honesty, the marriage isn’t likely to survive, Thompson said. “If a couple can not openly discuss, come to some compromise ” if the prevailing emotion is anger during financial conversations or if the topic is forbidden because one or the other simply will not discuss it – that bodes very very poorly for the eventual viability of the marriage or at least for the happiness of the marriage,” she said.