Welcome back to Uncomfortable Conversations About Money, a new series where we will tackle topics or situations around money that make you uneasy. We’ll outline the problem and try to get you some usable solutions.
The dilemma:
A wife with a habit of buying – and hiding – expensive shoes from her husband.
A husband with a secret online gambling addiction.
A partner racking up credit card debt for purchases the other partner doesn’t know about.
These are all examples of financial infidelity.
But what is financial infidelity?
“At its core, financial infidelity is a breach of trust around what you’re doing or not doing with money,” said Ed Coambs, a financial therapist.
“When we’re in financial infidelity, we’re doing it because we’re either trying to protect ourselves from feeling some relational pain or from them experiencing or me evoking something inside of them that’s uncomfortable,” he said.
Coambs is the past president of the Financial Therapy Association, an organization of professionals with combined therapy and financial planning expertise. He’s also the author of “The Healthy Love & Money Way,” and hosts a podcast called “Healthy Love and Money.”
Financial infidelity can violate any type of relationship, including a spouse or partner, sibling, parent, friend, employer, or – “here’s the real kicker, against yourself,” Coambs said.
You’re being unfaithful to yourself when you are not realistic about your finances or avoid your relationship with money, “so we’re kind of cheating on our own integrity around what we want to be doing with money,” he said.
More broadly, financial infidelity usually happens when there’s “likely something that’s happening in that relationship that’s making it not safe or acceptable to be honest or transparent about how you’re spending money,” Coambs said. “When we fear criticism or shame or judgment for what we’re doing with money, we’re much more likely to start hiding what we’re doing.”
That may mean hiding your shopping habits or purchases, Coambs said. But Coambs has also had patients who have failed to pay personal or business taxes, and parents who don’t want to disclose their financial problems to their adult children when it comes to estate planning.
More than 40% of people have committed financial infidelity
Financial infidelity is rather prevalent in relationships. In a 2021 study, the National Endowment for Financial Education found that two in five (43%) people in a relationship confess to having committed some act of financial deception, with 85% stating that indiscretion affected the current/past relationship in some way.
In a more recent study by marketing solutions company Vericast, 53% of people believe hiding finances from a significant other is a betrayal of trust.
Business stress, lack of self-worth led to therapist’s financial infidelity
Coambs committed financial infidelity himself about seven years ago in his marriage. He and his wife, Ann, had agreed that Coambs would use credit cards to start his new therapy business. The agreed-upon amount was about $10,000.
But building the business proved more difficult than Coambs anticipated. Coambs said his own feelings of self-worth and not wanting to admit to his wife, who had a thriving business, that he was not successful, caused him to accumulate $30,000 in debt – without telling her.
“When it came to light, she was really disappointed,” Coambs said. “She was frustrated, and she was left with more financial responsibility because her business and her practice was growing and successful.”
His not wanting to disappoint his wife resulted in him betraying her instead.
“It led to some really difficult conversations,” he said.
Coambs said for him and some of his patients, there’s this stacking of expectations that can’t be met, “and then we felt like we couldn’t talk about it. And so we were stuck in secrecy. And that secrecy then grew into shame and that’s just such a difficult space to free ourselves. It’s like a dark hole.”
Coambs and his wife sought out couples therapy to work out the reasons Coambs felt he had to hide the debt and to figure out how they could repair their relationship.
No one reason for financial infidelity
Since there is such a wide range of financial infidelity, there are different reasons for why it might occur, he said.
For instance, a secret gambling addiction is rooted in a mental health issue, which is layered into infidelity, Coambs said.
Coambs said there may also be cultural differences – one spouse may feel stuck between a cultural expectation to provide support to parents and a partner who doesn’t share or understand that obligation. A similar situation can come up with adult…
Read More: Financial infidelity can breed mistrust. Here’s how to come clean.