Four steps to prevent financial infidelity!

Are you Guilty of Financial Infidelity?

Have you ever hid a purchase from your partner or bought something out of spite? I hate to say it, but you’ve committed financial infidelity. The issue isn't in these big one-off purchases and actions. Multiple of even small actions of accumulated financial infidelity can add up to, not just financial disaster, but even the end of your marriage. I don’t have to tell you that the number one reason couples divorce is because of money.  If you’re on your second or third marriage, things can get more difficult as more baggage is brought into the picture.

Hey, I get it. It’s a hard discussion to have considering people would rather talk about their relationship infidelities than their money! This is exactly why you need to have this conversation, be an open book about your finances, and talk about how his or her actions make you feel. Money is an emotional topic after all, so feelings will somehow be involved!

I’ve heard of people hiding mountains of debt, unpaid taxes, gambling addictions, and even day-to-day purchases – whether it’s out of fear, guilt, shame, or spite.  A lot of these incidents didn’t lead to a happily ever after – could it have? Who knows? I do, however, stand by Elizabeth’s Lesser’s quote, “every household has a story that could lead to divorce, but it doesn’t always have to.”

But we know for certain that it takes willingness and effort from both parties to work on the solution.  Anything short of that is just beating a dead horse.

My story:
Our financial infidelity

My ex and I kept our finances separate and we just split our household bills – we had the attitudes of “Since I make my own money, I will spend it however I wish as long as our bills are paid.” It was simple for us, except that this type of thinking led to selfish behaviour and, eventually, resentment.

Imagine one of us didn’t work – now imagine the power that one of us would be dangling over the other. This is not how a relationship should be. Each person should be valuing one another on what each brings to the table, whether it’s through work, taking care of the household, or supporting each other – there’s value in everything we do and it’s never just about money.

I started off making more money, so it made sense that I picked up more bills. Eventually, my ex started to earn more, but the way we split our bills did not change. I was earning less but paying more of the bills, which was clearly unfair.

I was never a big-spender so I didn’t have any purchases to hide. I did, however, make a large investment ($20,000) without his knowledge and kept it a secret from him for years. I thought, “My money. My business.” I didn’t want to tell him because I didn’t want him to criticize me, judge me, tell me how stupid it was. I just didn’t want to hear it.  I didn’t want to value anything he had to say. Plus, we were both in the investments industry and we had our separate views on things – it would have been a never-ending argument. Our egos played a huge role in how we managed our relationship.

Huge mistake.

The consequences...

My ex would spend a lot of money going out, drinking, and partying.  I never knew how much he was spending doing this, but I knew he would frequent expensive spots.  He even snuck a trip to Miami without telling me – he was down in Orlando for a work conference but had decided at the last minute to stop by Miami for a night to party with a broker. I didn’t find out until he was already in Florida. I asked him, “When were you planning on telling me this?”.  He didn’t think it was a big deal because it was a “last minute” thing.

Zero. Respect.

I was livid, but I just piled that on to my mountain of anger and resentment that had been building for a long time. Eventually, everything just imploded.

The beginning of the end

This was the expectation we had set. We allowed it. I allowed it. There were so many deep wounds that were merely covered up by band-aids, and we never got down to the root of it.  We never considered how each of us would feel – our conversations didn’t go that deep. The only things we expressed to each other were anger.

Sure, we were ambitious and had plans to just get rich and enjoy life. But at the rate we were going, there was simply nothing to enjoy.  We were both high-income earners that couldn’t even deal with our own feelings.  We didn’t value each other and had no regard for each other’s feelings (though I can easily argue I had more regard for him than he did me, but that’s not the point!). I take ownership of why this relationship failed – it takes two to tango.

No matter how much you earn, how much assets you have, if you don’t value each other, your relationship ends up being the poor one.

If you and your partner are not an open book about your finances or you’re in a position where you are hiding something, here are a few things you both need to do. You and your partner need to gain some clarity and understand yourselves a bit better because you need to pinpoint what has been driving your behavior and not draw conclusions like, “You’re a bad person who can’t handle money”, or “You’re just selfish”. You can see how couples can fight endlessly because they just play the blame game back and forth – nobody wins.

Steps to Avoid Financial Infidelity

Warning: this can get deep but you need to if you want to fix the root of the problem and not just have band-aid solutions.

Step one: Ask yourself the following:
  • What are my insecurities about money? What have I grown up with that is causing my behavior? For example, maybe you grew up with kids making fun of you because your family wasn’t well off, so now you’re feeding into that insecurity by spending a lot, maybe racking up some debt (and not saving) to “show everyone” that you’re well off.
  • What are some of the things that bother me about my partner in terms of how she/he handles money? How is this making me feel? How is this affecting the relationship? How is this affecting our financial future? Is it his/her behaviour that is causing me to act this way? Perhaps your continued spending habit is taking away from your future goal of buying a larger home for your family.
  • What are my financial goals? What do I want and how do I envision my future with my partner? Visualizing this also helps. Keep a mental picture and get ready to share this with your partner.
  • How has your current behavior been affecting your financial future? Is what you’re doing serving future you and your family? What would happen if you continue doing what you’re doing? What is the price everyone pays for your actions?

Once you’ve gotten to the root of the problem you need to forgive yourself for your financial infidelity which is essential in moving forward. Don’t beat yourself up – you’re human and everyone makes money mistakes.

Step two: Sit down with your partner and talk about it

Come clean with your partner on what you’ve been hiding. Think of it this way, would you rather have your partner find out what you’ve done or would you rather tell them? If you’re coming clean about something, allow the other person to process it without judgment. There was some element of trust that has been broken so naturally, they’re going to be hurt by it.

Step three: Forgive each other

You both must be able to move past it.  If you can’t, keep hammering out what it is that is really bothering you (or your partner). The last thing you want is to keep bringing up the past – this just means it hasn’t been resolved and if one of you gets triggered, there’s something that needs to be addressed.

Step four: Focus on the solution

Come up with a plan that you both agree to. Whether it’s agreeing to save a certain amount each month or cutting back on certain things. If it’s a big goal, break it down into small bits so that it feels easier to attain. (e.g. Saving $10,000 for the year equates to $833 per month or $192 per week).  Always refer to what you have visualized when you find yourself in a bit of a rough patch – not all days will be good days so it’s important to be able to get back on track if you’ve fallen off the rails.

The goal is to be on the same financial page and achieve financial harmony – and with that includes trust and transparency.

It’s a slippery slope to walk down on if you can’t discuss these matters because one secret can easily lead to another. If there’s no trust, the foundation of the relationship is broken. And of course, seek additional counsel if need be.