How financial infidelity can erode trust and wreck your finances

Common forms of money deception among couples can include secret purchases, hiding debts or accounts and lending money without mutual consent

For someone indulging in financial deception, financial experts recommend them to come clean and confess to their partner as soon as possible, or get a third party such as a friend, family member or a financial planner involved to help manage the situation. Photo: Getty ImagesShow less

In 2016, David*, a British expat living in the UAE, decided to buy his wife a car for her birthday and used his credit card to make the Dh40,000 down payment. However, he lost his job and after 10 months, found he couldn't keep up with the monthly instalments for the car loan or the credit card.

Rather than tell his wife about his financial problem, he started borrowing from friends to make ends meet in a desperate effort to keep up with his financial liabilities. Eventually, he stopped making any repayments towards his debts.

"To my wife, I made it look like it was not a struggle and everything was all right. I didn't want her to feel like she had to give up the car if I was struggling to meet the payment," David tells The National.

We've heard stories of people taking on mountains of debt to fund their lifestyle – something which would be difficult for them to admit, even to partners

David, a senior sales consultant, kept his finances a secret from his wife for about two years. However, he had no choice but to come clean when he was prevented from boarding a flight at the airport because the bank had issued a travel ban against him for overdue debt payments. His wife questioned him and he was forced to confess.

“I didn’t break her financial trust, she was just hurt that I chose to keep my finances a secret," David says. "My wife was upset that I thought she was shallow enough to worry about keeping the car instead of resolving my financial situation.”

Financial infidelity, which includes hiding purchases, having a secret bank and credit card account or taking out a loan without their spouse knowing about it, can have a devastating effect on a marriage and create trust issues between couples if one of them is not honest about money.

Because of the ease of access to debt and credit, it is easier and quicker for financial issues to spiral out of control, financial experts say.

“We’ve heard stories of people taking on mountains of debt to fund their lifestyle – something which would be difficult for them to admit, even to partners,” Stuart Ritchie, director of wealth advice at financial advisory AES, says. “I’ve heard of couples who’ve faced troubles in their marriages because of a lack of financial disclosure.”

Spending more on what a partner might consider frivolous items, such as clothes, coffees and paying for taxis rather than taking public transport, are minor examples of financial infidelity, Carol Glynn, founder of Conscious Finance Coaching, says.

"Other examples of financial infidelity are bank accounts that only one partner is aware of. These accounts are used for expenditure they don't want their partner to know about," Ms Glynn tells The National.

In 2020, a survey by creditcards.com found that financial infidelity in marriages is on the rise, with 44 per cent of US respondents admitting they kept money secrets from their spouses.

Jamia*, an Indian communications professional in the UAE, has been lending money to people without her husband’s consent. In total, Jamia's friends and acquaintances owe her about Dh20,000.

"My husband believes not every individual has a genuine need. He asks me to categorise and lend money only to those in dire need. I don't quite agree with him, and that's why I have not disclosed this information," she tells The National.

Jamia admits that she's been lending money since she started earning a salary. She has been married for 13 years and kept her lending secret from her husband since then.

“Be it a family emergency or a loss of job, I have always been there to help in whatever way I can. While many have returned the money, some have not,” she adds.

Although Jamia’s husband knows she lends money, he doesn’t know the specific amount. She says she wouldn’t want to disclose this information to him under any circumstance.

There can be many factors at play when it comes to financial infidelity among couples, financial experts say.

There is a lot of shame attached to making bad financial decisions and so this leads to people hiding their issues

“Poor communication leading to misunderstandings about finance between couples is one, deliberate and intent deceit is another, but I find the most common driver is poor communication combined with shame and fear,” Ms Glynn says.

“There is a lot of shame attached to making bad financial decisions and this leads to people hiding their issues, not seeking help and this includes not telling their partners and not wanting to admit they have made mistakes. They unsuccessfully try to fix the situation themselves or worse, bury their heads in the sand but the situation spirals out of control.”

Another survey conducted by creditcards.com in January 2021, found that 38 per cent of respondents have either committed financial infidelity or been a victim of it in the past year due to the impact of the Covid-19 pandemic. Among those who experienced financial infidelity, almost two thirds say they suffered financial stress due to a lost job or reduced income in the past year.

About 28 per cent of those who committed financial deception say they made secret purchases, 20 per cent hid debts or accounts, 19 per cent drained money from savings, 18 per cent lent money without mutual consent and more than 16 per cent lied about their income, the survey found.

Meanwhile, 29 per cent of respondents say they hid financial information from their partner to avoid an argument, 21 per cent wanted to feel more in control of their finances, 20 per cent were embarrassed by their money-handling skills, 17 per cent did it to help someone else and 13 per cent didn’t want to share bad news, according to the survey.

In older generations, it is common for the male counterpart to take on all financial responsibilities and the wife to have a secret savings account, whose purpose is to serve as an emergency fund or to buy things the husband would not approve of, Ms Glynn says. This could also be considered a form of financial infidelity.

This lack of communication allowed financial indiscretions to go undetected for years, often only coming to light after a spouse's death, Ms Glynn adds.

“Like other forms of infidelity, society attaches a lot of shame and blame, often on both the perpetrator and the victim. It’s very common for both partners to feel too ashamed to talk about what they are going through with friends and family. It can be a very lonely experience,” Ms Glynn says.

Meanwhile, the likelihood of committing financial infidelity can also depend on age, according to a February survey by creditcards.com. Millennials are more likely to commit some form of financial infidelity with their partner than Gen Xers and Baby Boomers, it found.

“Among many younger couples, one partner [usually the male] takes care of everything and the other partner [usually female] being close to, if not completely, oblivious to the detail of their financial situation. This makes it very easy for financial infidelity to both occur and continue undetected,” Ms Glynn says.

Couples need to have more open and honest conversations with each other – and sooner rather than later, according to Mr Ritchie. Talk about your earnings and liabilities so the relationship can be built on a foundation of trust and accountability, he says.

“Too often, we avoid telling the truth for fear of how someone else may respond. But, who knows, your partner may surprise you and support you to pay off your debt,” he adds.

It is important for couples to talk about their financial mindsets, aspirations, feelings about debt and investing early in the relationship because “what one person may consider unacceptable financial habits or behaviours may be normal for the other”, Ms Glynn adds.

Financial experts recommend both partners to be involved in family finances. Spouses must be careful not to sign any financial forms such as tax returns or loan applications without reading and fully understanding them.

“I have seen women signing off on loans they thought were in both their names but they were in fact only in the woman’s name, which means she is solely responsible for the debt. Or signing off on tax returns that are deliberately fraudulent,” Ms Glynn warns.

Couples must also set aside at least an hour every month to review and talk about family finances. Both spouses must have their own access to all bank, investment and loan accounts. This way, they can independently review the family’s finances at any time, making it much harder for any partner to hide issues, she adds.

For someone resorting to financial deception, Mr Ritchie recommends them to come clean and confess to their partner as soon as possible, or get a third party such as a friend, family member or even a financial planner involved to help ease or manage the situation.

“Once exposed, there’s no point hiding any longer. Admit your mistakes and allow yourself to be vulnerable. Tell your partner the reasons behind your financial indiscretion,” Mr Ritchie says.

“Try to have a calm and rational conversation, discussing how to solve the problem and move forward rather than focusing too much on what’s already been done. You can’t control the fact that the debt exists. But you can control how you manage it from now on.”

* Names have been changed for privacy reasons