Understanding Financial Infidelity – Symptoms & What to do…

Wikipedia defines, “Financial Infidelity is the secretive act of spending money, possessing credit and credit cards, holding secret accounts or stashes of money, borrowing money, or otherwise incurring debt unknown to one’s spouse, partner, or significant other.” In Indian context compulsive shopping, wining or dining with undisclosed friend, buying hidden property to settle extra-marital relationships or losing money in stocks or by way of gambling etc are also reasons of financial infidelity.

Financial Infidelity

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Few Facts

Adding to the monetary strain commonly associated with financial infidelity in a relationship, there is a subsequent loss of intimacy and trust in the relationship. One of the recent survey reports that 33% couple who had combined finances have committed infidelity. Financial infidelity appears to be on the rise, with a 2005 study showing that 30% of respondents had lied about financial information and 25% had withheld information, whereas a 2008 study showed that half the respondents had committed some form of financial infidelity. CNBC (US) “Studies show that financial infidelity occurs evenly across all income levels and both sexes.”

Huffington post says,

“1 In 3 People Admit To Lying About This in a Relationship”

“The Money Issue that Drags down One in 10 Marriages”

Why I am writing this?

It may seem like a work of fiction, but a one of my friend is planning to invest in a ready to shift condo. I knew his family would lack space due to its size, so of further enquiry he revealed his real motive. He wanted to use this as a bachelor pad, where he can relax with friends, catchup old times over drinks and have isolated weekends and not the family ones.

Reason may be strange but a property investment is a huge outflow. May be you purchase it all cash or over loan. Important thing is that the decision to invest has been made without consulting from the stakeholders. This can be very dangerous situation in our country as it may lead to separations, which is again a financial drain (thanks to one sided laws- will not debate this one). Although divorce come at later stage or as a result of other issues, but trust is lost and if two souls living under the same roof but not trusting each other, it is called landing in HELL.

Symptoms of financial infidelity

  • Spending or debt: Your partner will show variation is his spending habits. It can be both ways that one can go for purchases beyond means or he/she may try to cut some usual expenses. Your partner can go on loan spree also. If you notice that partner has started making loan enquiry from financial institutions or relatives without much discussing at home, it is a sign.
  • Topic avoidance: Normally the spouse avoids talking about finances or becomes defensive or angry around the topic. He/she will make you feel that he is correct in finance and would try to show case a normal picture.
  • Hiding Purchases: The spouse would hide a big purchase. Than he may react normally to cool off his stand that he purchased something without talking to you first.
  • Home auditing: You may find bills or receipts for items you didn’t know about. It could be utility bills not installed in your home or may be invoices from a share broker.
  • Credit enquiries: You may discover new enquiries of credit opening in your spouse’s or in worst condition in your name. You may see an upside down change in your monthly account balances or house budget.
  • Acting fishy: The change can be behavioral also. Your spouse can hide or prevents you from seeing bills and bank statements which earlier your were seeing normally. Watch out for abnormal financial behavior.

What to do?

Tackling financial infidelity is more difficult than discovering it. In western countries the specialists and counselors are available, but in our country everyone is an advisor/opinion holder so serious counselling is ruled out. Hence it comes on the two individuals, among whom one is plaintiff and other the guilty one, to come on a meaningful solution and save the relationship.

4 Step Process

I checked lot of readings on this subject and all had just one solution packed in different words. And this was a 4 step process that the ailing couple need to follow. These four steps are:

  • Confront the issue: denial is not the scenario from where one can look at the solution. Have a serious conversation about your expenses, budget and variations. Be clear why infidelity has happened. Reassure that you and your spouse are in one direction for future plans and aspirations. A multi-focused team is not appreciated in financial planning.
  • Re-agree to a plan: determine the joint goals and compromises that now you have to make in your present finances. One of the major reason of financial infidelity is that one assumes that certain part of finances should be private. If one is adamant in thinking so than a mid-way needs to be chartered out for fulfilling the shared responsibilities.
  • Follow the plan: once you have given a fresh start, it is important that it’s followed in all spirits. Revision is important and in inception stage a monthly review should be followed and after some time the reviewing period can be increased. Symptoms as discussed earlier have to be watched and if you are getting red flags… confront it.
  • Emergency plan: What if the financial infidelity was due to marital woes or habit? What if one of the partners resorts to earlier means? Emergency plan should be made in consultation of your financial planner and he may assist you in understanding the damage involved in separation and other issues.

I admit that I have written on a very serious topic which in our country is termed as breaking-a-house. People avoid it knowingly till it is suffocating, but change in society, openness in financial relationships, joint goal planning and inclusions of females have made it important that negative aspects of a particular concepts are also explored. Hence this is not scare you but to caution you. Must Share your views…

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{ 4 comments… add one }
  • Bhim September 10, 2014, 12:09 PM

    I think this is a very topical in todays modern living. There is so much of financial infidelity we can find around our society. Infect I liked this new coined word – “financial infidelity”

  • Rama September 15, 2014, 11:52 AM

    I appreciate your effort in bringing out such a common blunder committed by even educated ppl.

    But there are cultural and social roots to this problem.

    Even wife’s commit this sort of acts.

    For discussion and knowing others views in different angles I will quote a few instances

    1)Working Wife though a salaried person whose husband doesn’t allow her to spend even Rs100 in the way she likes
    2)Wife whose husband is an addict – be it alcohol or buying unnecessary electronic gadgets for fancying or something else
    3)When the priorities for spending/investing differ – one would like to spend for religious ceremony or trip , the other would like to explore for fun or just save money without spending; one would like to spend to keep the house with modern touch and elegance and the other thinks it is waste of money
    4)Te age old belief that wife and husband should have different investmnets/hiding strategies and it is foolish to share everything with each other
    5)if one shares everything and the other doesn’t; such acts don’t even get condemned since everyone does in some way or the other; our society is full of people who needs fine or imprisonment for avoiding drunken driving which costs their life. For such people it needs lot of education to make them understand that this sort of acts are wrong – amount to infedility………but how to make sure the othr partner is fair and open and straight, most importantly reliable?

    My husband is most often advised/suggested that he should not reveal everything to wife ; not just others but my own brothers and other relatives too. I am sure this is the case with more than 90% of the people………..whether man or woman………..

    Plz shre uour thoughts

    Hemant hope you are not thinking that it is a deviation
    I am a regular reader of your posts and most of the times I felt that the family money matters are more controlled /distorted by social frame work/beliefs/norms than financial education

  • majibar rahman sheikh September 16, 2014, 4:33 PM

    Dear Sir,
    You have stirred up the hornet’s nest. This is the simple reason why Term plans are avoided in India by many. You may buy an FD, PPF or RD for a specific cause but may end up using the proceeds into somewhere else. One of my clients secretly married another girl half his age and now after his death, his two wives are vying for the insurance claim amount. The first wife has a son studying Engineering and if she does not get the entire insurance amount , her dream of making her son an Engineer may remain in her dreams. Nobody knows when this client married the girl- but the girl has got valid papers and her claim to the insurance amount is genuine- Sir, this is the simplest reason why we, LIC agents avoid Term plans- at least I- because you may suggest a Term plan for Mr X after analyzing his financial liabilities etc., but he may have hidden liabilities and a mix of insurance+investment may work well for him. You never know- the Saradha scam has unearthed many secrets- that Mamta Banerjee and Co was involved in stashing hard earned money of many people amounting to 30 thousand crores. Therefore, Sir, suggesting the right insurance plan to a person is impossible. Thanks a lot for the eye opener. Keep things up. Kudos to u sir……

  • srrk December 5, 2015, 11:46 PM

    Dear Hemantji

    Thankyou so much for giving respect to women so much in terms of sharing finances in between the spouses.If all men become intelligent like you then I dont think divorces are going to happen ever in India esp due to yr said word Financial Infidelity.

    Its really overwhelming to read things from yr side that imparts knowledge to people like us but its difficult for men to adopt it as per their psycology (I mean a few men)

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