In the midst of the season of love, unfortunately, not everybody will be celebrating as they should, as they might have recently found out about financial infidelity within their relationship. Financial infidelity refers to the secretive and deceptive behaviour of one partner regarding their financial matters within a romantic relationship. It involves actions such as hiding income, debt, or significant expenditures from a partner, creating a breach of trust in the financial aspect of the relationship. This form of dishonesty can have profound consequences, leading to strained relationships, broken trust, and even financial instability. Unlike traditional infidelity, which typically involves romantic or emotional betrayal, financial infidelity revolves around the clandestine handling of monetary matters, making it a crucial issue that can undermine the foundation of a healthy partnership.

Susan and her partner Greg (names changed to protect identities) are very open and trusting with their financial affairs. Susan manages their bank accounts and bill payments, while Greg covers most out-of-home expenditures using the shared credit card account. All was going well until one day, Susan lent close to 300,000 to a colleague without prior discussion with her partner. All came to a grinding halt when she made the revelation months later when the repayment was not forthcoming in a timely manner. What started as a well-intentioned initiative quickly soured when betrayal and quite frankly, financial infidelity crept into the picture.

The truth is this situation is not unusual. According to the National Endowment for Financial Education® (NEFE®), analysing financial infidelity among US adults finds that among those who report having ever combined finances in a relationship, two in five (43 per cent) confess to having ever committed some act of financial deception, with 85 per cent of those individuals stating the indiscretion affected the current/past relationship in some way. This means that chances are either you or someone you know have been on the receiving end or have committed some form of financial infidelity at some point in time.

There are subtle yet telltale signs that may indicate one partner is engaging in deceptive financial practices. These signs often manifest in behaviours that deviate from open and transparent financial communication. A sudden change in spending habits, unexplained withdrawals or expenditures, and secretive financial accounts are red flags that suggest potential financial infidelity. Additionally, keeping financial information hidden, such as undisclosed debts or income, and consistently avoiding discussions about money matters can further contribute to the erosion of trust between couples. Identifying these signs early on can be crucial for addressing and resolving issues before they escalate, fostering a healthier and more transparent financial partnership.

If you suspect your partner of financial infidelity, and depending on the severity of the deception, I dare say there is still hope for your relationship, but it will require frank conversations, openness, and a willingness to change. Here are three tips for confronting the issue meaningfully.

Confrontation

Confronting a partner suspected of financial deception is a delicate process that requires empathy, effective communication, and a commitment to resolving issues collaboratively. Firstly, it is crucial to approach the conversation with a calm and non-accusatory demeanour. Instead of immediately pointing fingers or assigning blame, express your concerns from a place of genuine curiosity and a desire to understand the full picture. Use “I” statements to convey your feelings and observations, fostering an open dialogue that encourages your partner to share their perspective without feeling attacked.

Active Listening

Secondly, focus on active listening during the conversation. Allow your partner the opportunity to explain their financial decisions, motivations, and any underlying concerns they may have. Demonstrating empathy and understanding can create an environment where both partners feel safe discussing financial matters openly. Encourage a two-way conversation to foster transparency and to explore potential solutions together. It’s important to avoid making assumptions and to give your partner the space to articulate their reasons behind any financial decisions that may have raised concerns.

Seeking Help

Lastly, consider seeking professional help if the issues persist or escalate. Financial counsellors, therapists, or relationship experts can provide guidance and mediation to facilitate more productive conversations. Professional assistance can bring an unbiased perspective to the discussion and offer practical strategies for managing finances as a couple. This approach not only addresses the immediate concerns but also helps build a foundation for healthier financial communication and trust in the long run. The ultimate goal is to work together towards a mutual understanding and develop a plan for shared financial responsibility that aligns with both partners’ values and goals.

You might be wondering what happened to Susan and Greg. Even though, sadly, the loan repayment was not forthcoming, their relationship made it through the tough patch brought on by the situation. One key thing that they started doing, which I totally endorse is that they rebuilt their trust by having a designated and open forum for talking all things money. So, whether it is as large as taking a loan or as small as shopping online, all bills, receipts and financial goals are reconciled in this forum. They also got help from a counsellor to work through the emotional and practical parts of rebuilding trust.

Have you or someone you know faced this issue as the perpetrator or on the receiving end? Send us a direct message online at our Instagram or Facebook pages @ncbcapmarkets. Also, our wealth advisors are more than happy to walk you through some helpful money strategies to help you and your partner tackle your financial dreams together.