Most couples have been played on the edge of financial infidelity: hiding the new pair of shoes in the closet, investing several hundred dollars of “play money” in the stock market, or holding a separate bank account for their own purchases.
While having some financial secrets can be harmless, there’s a fine line when it comes to financial infidelity, says Susan O’Brien, senior wealth advisor with Richardson Wealth in Calgary.
“There are secrets that can really create mistrust – ones that can damage the relationship,” she says.
But while the fallout can be dire, financial infidelity isn’t always based on ill-intent, says Sophie Blais, WealthCo. Group of Companies’ president and chief compliance officer in Calgary.
In fact, it often stems from cultural differences or upbringings. For example, if one individual was raised to hide “money under the mattress” but the other person’s family was comfortable carrying a lot of debt, that can lead to a lot of financial differences that can breed bad behaviour, says Blais.
What’s essential is that communication lines remain open between couples, according to O’ Brien. She suggests that couples establish financial parameters at the beginning of the relationship to create a mutually compatible financial plan – and check in monthly.
This ensures that even in cases where one partner has done something secretive, there is a pathway whereby they can explain and reconcile the behaviour.
“It’s really important that couples actually bring these conversations out into the open,” she says.
Top 5 green flags
What’s OK when it comes to financial infidelity? Here’s our list.
The secret that isn’t a secret
Many couples have “secret” bank accounts, says O’Brien, which they use to buy things that wouldn’t ordinarily fall within the household budget. But in many cases, the other partner actually knows about the account and can joke about a spouse’s shoe budget or vinyl collection. In situations like this, O’Brien says things can work as long as the amounts remain consistent.
The odd spending spree
Blais has no problem in cases where a person spends their “mad money” – a predetermined amount of disposable income. She says that as long as the couple have established their financial goals and objectives, the odd spree can be fine.
Buying something – but then admitting it
Everyone has weak moments. From that late-night online purchase to an impulsive splurge. But as long as partners come clean about it – and admit to what they’ve done – that will build trust, says O’Brien.
Struggling to discuss finances
Most couples find discussing finances challenging, says O’Brien. “You have another glass of wine and you go, ‘Okay, we need to talk about this,’ and then you have another glass of wine, and nothing ever gets resolved,” she says. That’s not abnormal behaviour. She suggests couples meet with a financial advisor who can make that conversation a lot easier.
Knowing when to seek help
The key is not putting your head in the sand, says Blais. If a person realizes they have a financial infidelity problem, as long as they’re open about it and seek help, the outcome will likely preserve trust in the relationship.
Top 5 red flags
This type of spending might set off some alarm bells.
Spending that isn’t accounted for
Maybe it’s mysterious items on a credit card statement the partner has never seen. Or big cash withdrawals over a period of months. Or a sudden increase in debt load. These types of changes could indicate compulsive spending, a gambling problem or an affair, says Blais.
Luxe purchases
When one partner buys a lavish handbag or a motorcycle without consulting the other partner it can lead to strife in the relationship, says O’Brien. The purchase can lead to resentment and a feeling of mistrust, as the other partner has no say in the matter and has not been gifted an equally lavish item.
Lying about money
If one partner is consistently lying about what they’ve spent money on, there’s an issue, says Blais. “These lies are inconsistent with what you know to be true about what the financial situation is,” she says. She says people often lie about receiving no inheritance, big-ticket items or an inability to manage their debt.
Banking changes
If updates such as emails or texts about a monthly bill or bank statement stop coming, it might be due to the other partner redirecting those notifications, says Blais. This might be a way of concealing shady spending – or a failure to pay bills on time.
Changes to estate plans
A sudden change to an estate plan, such as opting to leave nothing or changing the beneficiaries – can signal financial infidelity, says Blais. She suggests that couples draw up wills where the beneficiaries are irrevocable.
In the end, financial infidelity can easily be avoided if partners are honest and transparent about their financial needs and goals.
And if anything seems odd, it warrants a closer look.
“Listen to your gut,” says Blais.