With wedding season under way, it seems appropriate to bring up the subject of financial fidelity. The topic couldn’t be more important for couples, and not only for those just starting out. A recent survey reports that one-third of adults who combine finances with a partner or spouse have committed financial infidelity, defined by financial psychologist Brad Klontz as “those little green lies that ruin relationships.”
The survey, conducted for the National Endowment for Financial Education, found that of those who said they had cheated, three in ten hid cash, a purchase, a statement or bill, or even a bank account from their significant other. And 13% engaged in more-significant deceptions, such as lying about how much they earn or what they owe.
Not surprisingly, a financial deception ultimately caused an argument nearly half the time. What may surprise you, however, is that fights about money lead to divorce more often than disagreements about chores, in-laws, spending time together or even sex, according to research by Utah State University professor Jeffrey Dew, an expert in money and family relationships. “Money brings about these intense arguments,” says Dew. People who disagree about finances almost every day are 69% more likely to divorce than those who never or rarely argue about money, Dew has found.
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You can often spot the signs of financial infidelity the same way you spot the other kind—by finding a stray receipt or a statement you don’t recognize, says NEFE’s Patricia Seaman. “Or you’re not seeing the stuff you’re supposed to see,” she adds. “Your partner handles the bills and you never see how the money was spent. If you bring up the subject of money, the other person will try to deflect it, or be defensive or withdrawn.”
Sometimes financial infidelity is a symptom of something more serious, such as addiction, gambling or a compulsive buying disorder, or deeper relationship issues, such as a lack of trust or an abuse of power. Extreme cases call for a therapist equipped to deal with money issues, and increasingly therapists are on staff or on call in financial-planning practices.
Face the issue. But most couples can address financial infidelity with Klontz’s four-step process, which he calls SAFE. First, “Speak the truth.” It’s crucial to ’fess up, and then have a serious conversation about your budget, spending habits and goals for the future.
Start by determining whether you and your partner are aligned in your money values. Maybe one of you is focused on the physical comforts of life (a nice house, car, wardrobe) and the other cares more about experiences (travel, the arts or professional sports). Take the NEFE quiz at www.smartaboutmoney.org/tools-resources/lifevalues-quiz to find out what your money values are. There are no wrong answers, and you probably won’t change your partner’s core values, but at least you’ll know where you stand.
In Klontz’s program, A stands for “Agree to a plan.” Determine joint goals (a down payment on a home, say), then compromise by budgeting for the vacation and the new car. Maybe you’ll agree to keep a certain portion of your finances separate. (About 35% of those committing financial infidelity said they did it because they believe some aspects of their finances should remain private.) Or perhaps you’ll decide to discuss spending anything over a certain threshold—$100, $200, or whatever the two of you deem appropriate.
F is for “Follow the agreement,” which sounds easier than it is. Revisit your plan in a month or two, so that you can tweak it instead of giving up. Finally, “Establish an emergency plan.” If you’re fighting a lot or you’re at an impasse, it’s time to consult with a counselor.
Anne Kates Smith is a senior editor at Kiplinger’s Personal Finance magazine.
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