How Secret Spending Can Lead To Financial Infidelity

“Financial infidelity occurs when couples lie to each other about money matters. It can include hiding debt, making big purchases, and lying about income. Financial infidelity can drastically affect trust between partners and the financial stability of the relationship.” ~Robert Hinojosa LCSW

In today's society, people seem quick to judge others by their clothes, hair, ethnicity, religion, politics, lifestyle, responses to fear, love, pain, observations, and past. People are dissected, ostracized, and compartmentalized, or put another way - pigeon-holed according to a set of standards, origins unknown,  However, the lifestyle is often what breaks the bank. A simple explanation can be found in the follow-the-leader mentality. If you recall, Follow the Leader is a children's game where one child is chosen as the leader, and the remaining children line up behind them. The leader moves around, and the other players must mimic their actions. Any players who do not follow or mimic the leader are out of the game. This is especially true of those craving inclusion. From the year, make, and model of the vehicle you drive, to the type of home you have, to the label on the wine you drink, your ticket to inclusion is constantly scrutinized by those in your circle - social, professional, and others. The problem arises when you can no longer afford to follow the leader. If you can only afford a “beater” and you sign a lease for or purchase the type of vehicle the leader and the other sheep drive, then financial misery looms ever large.

Of course, bad financial decisions are about a lot more than what kind of car you drive, they include and encompass everything that identifies you as a person, and how you manage financial matters. The need for inclusion is now the bane of your existence. That warm emotional blanket of being in social lockstep with others in your circle has allowed you to throw caution to the wind (and money as well), until the bills start to come in, and your mailbox is stuffed with disconnection and dunning notices.

Case in point is Rose Turner (not her real name). Rose grew up in abject poverty – the shabby house she grew up in, the meager meals she and her siblings ate, and the hand-me-down clothes from her mother’s employer that always seemed to be handed down one time too many. Despite all her hardships she graduated from college, secured a middle management job with an architectural firm, and established herself in the corporate social circle. She was well-liked, a real joiner, one always on a guest list. Although she was occasionally reckless with her spending habits, she became extremely skillful at juggling money, and selective deprivation – peanut butter and jelly to pay the new dress bill. On occasions, her more recent purchases had to be returned to bring her credit card balance down. This system worked and didn't work for her because she had no one looking over her shoulder for accountability. That all changed when she married Neil, a tenured college professor who was revered by students and colleagues. His family gave them a well-appointed family house as a wedding present.

The marriage required Rose to entertain more and while her wardrobe was more than adequate for a college professor’s wife, she continually added to it, buying more expensive dresses, hats, bags, and shoes. Although she was an excellent cook, Rose chose to hire caterers for their in-home entertainment venue. Unfortunately, her contribution to the family budget fell far short of what was needed, and the in-her-head accounting method left something to be desired in any realistic attempt to keep up with her new spending habits.

It was not long before Rose realized the depths of her financial transgressions. Dunning letters and disconnection notices began to stuff the mailbox. Every time the first of the month rolled around, she was on pins and needles to get the mail before Neil saw it. She started eating antacids the way kids eat M&Ms. To make matters worse she started taking out small loans and opening new credit cards to stay financially afloat.

Neil Williamson had always been the type of man who kept things close to the vest. Ever since his college years, he had played the ponies, and for a while, his winnings made up more of his income than his professor’s salary. Since Rose managed the family budget, they never really discussed money. The bills were being paid, he put food on the table and life seemed surprisingly good until his good luck changed. He had not bet on a winner in weeks, and although he knew he should not have considered it, he decided it was time to take out a small loan using some of the equity in his home. That way Rose would not have to know. When the bank turned him down, Neil had no recourse but to ask Rose for money from the household budget to clear some of the debt. This is where their financial secrets were revealed.

A survey in January by US News & Report sketched out how widespread so-called “financial infidelity” is. Some 30% of couples questioned by researchers described lies they had experienced or told in their relationship, the main one being secret purchases (31%), followed by hidden debts (28%) and dishonesty about income (23%). Susanna Abse, a psychoanalytic psychotherapist who often works with couples says, “Deceit can be a form of coercive control, as one person seeks to dominate the decisions of the relationship by hiding key information. It can also be poor communication around money, added to the powerful shame of debt, corroding trust inch by inch. And it can, of course, be driven by other lies, other humiliations, such as gambling is incredibly hard to disclose.”

Normally when infidelity is discovered in a relationship, one partner is responsible for the betrayal. However, in this case, Rose and Neil both experienced feelings of being upset, angry, and disappointed in each other, and a misplaced loss of trust. Why misplaced? The fact that Rose and Neil never discussed finances revealed a serious lack of communication. Neither felt the need to discuss financial priorities, establish common goals, or collectively figure a way out of their messes that significantly impacted the marriage. They needed to figure out why it happened in the first place. Each had disastrous spending habits before the marriage. For Neil life was a financial crapshoot, and for Rose, it was all about doing what she perceived was necessary to continue to play follow the leader. They both knew that if the marriage were to survive, they would need to create a survival plan.

Once Neil and Rose were outed, the discovery led to transparency,and it was the most crucial step. Step two required them to share their feelings without fear of judgment or repercussions on why each felt they did not need to discuss their financial issues rather than keep secrets. Step three addresses each one’s relationship with money, i.e., a means to an end, social status or to feed an exaggerated ego. Step four:  Create a value system. According to Claire Parker of Xentum, “Personal values can have a significant impact on money decisions. Our values are the principles and beliefs that guide our behavior, and they influence the choices we make in all aspects of our lives, including how we manage our finances.” Step five: Define your budget. It is clear to see that neither Rose nor Neil had a budget. It was spent until there was nothing left and then tried to figure a way to pay for things, which made the situation worse. A budget is integral to financial health and goals that should happen before a marriage takes place. Step six:  Prioritize and establish personal and relationship money goals. Discuss what, if any, financial baggage each partner brings to the relationship and how it will be addressed. Step 6:  Know the warning signs. Remember when Rosa was suffering such high anxiety trying to get the bills from the mailbox before Neil saw them? She experienced all the warning signs of being financially underwater. These included collection, severe cash flow problems, opening a new credit card to pay an existing one, or having more money available to maintain her spending habits, only to default on them. Step seven: Accepting responsibility. Rose and Neil were addicts. They could not stop until the bottom nearly fell out. Their recovery was contingent upon seeking help from a professional and a determination to follow their new financial rules and not fall off the wagon. Keeping secrets from partners can be devastating to a relationship in many ways. Following the steps to financial recovery may not be an easy pathway, but even in a case like theirs, problems can be addressed and corrected if both parties are willing to make the effort.

Marsha Walker Eastwood BSEd, MSHSVC

©2024 All rights reserved