Ever kept a financial secret from your partner? Hidden debts, undercover bank accounts, secret credit cards, high risk investments – they’re more common than you might think. Actually, the statistics are pretty grim. Financial infidelity occurs in roughly 40% of American relationships. Considering money woes are one of the top reasons for divorce, facing these secrets head-on is a must.

How it starts:

There are plenty of possible reasons why financial infidelity occurs. Many times, the intentions aren’t all bad in the beginning. Maybe the secret keeper is hiding past money mistakes to make their current financial situation seem rosier. The right move? No. Understandable? Maybe. When you’re diving into a new relationship, you want to put your best foot forward. The problem is as time ticks on, the likelihood of the secret keeper fessing up to past indiscretions decreases. The perfect opportunity to have the financial secret “talk” probably never comes. The relationship keeps on, and those secrets remain…secrets.

Lack of communication:

How is financial infidelity kept in the shadows? Sadly, technology makes it easier than ever. Gone are the days of unanticipated credit card statements or bills showing up in the mailbox. If one partner is completely in charge of the financial household, the other may be left totally in the dark. Getting comfortable being out of the financial loop gives you little chance of discovering what’s going on behind the scenes. You’re much more likely to get taken advantage of if you have no idea what happens to your household cashflow.

The snowball effect:

Unhappiness in a relationship can cause these problems to spiral quickly. One person may feel they have more of a “say” in how money is spent. Often they are a higher earner than their partner and feel they are entitled to use the funds without input from their significant other. Or they somehow feel financially inadequate and overspend as a means to cope, in hopes that someday they’ll have plenty of money to pay it all back. In the meantime, the debts keep slowly building up.

The end result:

Unfortunately, it isn’t pretty. More often than not, the financial cheater gets caught. Losing a loved one’s trust takes a big emotional toll. Money can be complicated enough. You build your life around the funds you have at your disposal. Nobody likes feeling lied to, and financial infidelity is no different. Repairing your wounded relationship can be a real uphill battle. Growing interest on loans, credit score difficulties, and years lost on making headway toward shared goals can cause a seemingly healthy relationship to fall apart.

What to do now:

You should know that if you’ve experienced financial infidelity it is completely possible to get back on track. To start, communicate, communicate, communicate. Be open and honest with your loved one. Lay it all out there and come up with a plan to move forward. Make sure your financial big picture is front and center. Talk about your finances openly and often. Most importantly, set strict ground rules for the future. What types of spending need to be talked over first? Where’s that threshold of discomfort? Recognize that the limit may be very low for quite a while. If we can be of any assistance as you work through it, don’t hesitate to reach out.