Welcome back to Uncomfortable Money Talks, a new series where we’ll tackle topics or situations around money that make you uncomfortable. We will describe the problem and try to provide you with some workable solutions.
Dilemma:
A woman has a habit of buying – and hiding – expensive shoes from her husband.
A man with a secret internet gambling addiction.
One partner racking up credit card debt for purchases the other partner doesn’t know about.
All of these are examples of financial infidelity.
But what is financial infidelity?
“At its core, financial infidelity is a breach of trust about what you are doing or not doing with money,” said Ed Coambs, a financial therapist.
“When we’re financially unfaithful, we’re doing it because we’re either trying to protect ourselves from feeling some pain in the relationship, or experiencing them, or me evoking something inside them that’s uncomfortable,” he said.
Coambs is past president of the Financial Therapy Association, an organization of professionals with combined therapy and financial planning expertise. He is also the author of The Healthy Love & Money Way and hosts a podcast called Healthy Love & Money.
Financial infidelity can affect any type of relationship, including a spouse or partner, sibling, parent, friend, employer or — “here’s the real offender against himself,” Coambs said.
You’re being disloyal to yourself when you’re not realistic about your finances or when you avoid your relationship with money, “so we’re cheating our integrity about what we want to do with money,” he said.
More broadly, financial infidelity usually occurs when “there’s likely something going on in that relationship that’s making it unsafe or acceptable to be honest or transparent about how you’re spending money,” Coambs said. “When we fear criticism, shame or judgment about what we’re doing with money, we’re much more likely to start hiding what we’re doing.”
That could mean hiding your 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 grown children when it comes to estate planning.
More than 40% of people have committed financial infidelity
Financial infidelity is quite common in relationships. In a 2021 study, the National Endowment for Financial Education found that two in five (43%) people in a relationship admit to having committed an act of financial fraud, with 85% stating that the carelessness affected the current/former relationship in some way. the past.
In a more recent study by marketing solutions company Vericast, 53% of people believe that hiding finances from a significant other is a betrayal of trust.
Business stress, lack of self-esteem led to financial infidelity of the therapist
Coambs himself committed financial infidelity 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 feelings of self-worth and unwillingness to admit to his wife, who had a thriving business, that he wasn’t successful, led him to rack up $30,000 in debt — without telling her.
“When it came to light, she was really disappointed,” Coambs said. “She was frustrated and she had more financial responsibility because her business and practice were growing and successful.”
His unwillingness to disappoint his wife resulted in him cheating on her instead.
“It led to some really difficult conversations,” he said.
Coambs said of him and some of his patients, there’s a bunch of expectations that can’t be met, “and then we felt like we couldn’t talk about it. And so we got stuck in secrecy. And that secrecy then turned into in shame and it’s such a hard space to free yourself from. It’s like a dark hole.”
Coambs and his wife sought couples therapy to find out why Coambs felt he had to hide the debt and figure out how they could repair their relationship.
There is no reason for financial infidelity
Because there is such a wide range of financial fraud, there are different reasons why it might happen, he said.
For example, a hidden gambling addiction is rooted in a mental health issue, which is layered into the infidelity, Coambs said.
Coambs said there can also be cultural differences — a 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 arise with grown children when one parent feels that financial support is required and the other does not, Coambs said.
When it’s self-defense, not infidelity
Another scenario is a spouse or partner who is in a risky relationship and feels the need to put money aside to help them get out of it.
Coambs said in that case, it was not considered financial infidelity, but financial self-defense.
“The time you can be completely honest and transparent about your finances is when there is enough security in the relationship, when you have a reasonable expectation that your partner can move from anger and frustration to compassion and empathy,” Coambs said.
Expert advice
So how does someone who has committed financial infidelity come clean?
“In an ideal world, you’d have enough emotional resolve or maturity to be able to come to your partner and just say, ‘I need to invite you into a difficult conversation about our finances. You’re in a place where can we talk about something that’s likely to make us both comfortable?’ Coombs said. That sets the stage so “we’re not psychologically blinding them with the news.”
Coambs said most patients have told him they want to be able to talk to their partner in a safe, responsible and respectful way “because they don’t want to do unfortunate things or say things about It will be a shame when this comes out,” he said.
What is the advice for the other party? Coambs said infidelity is often discovered by a partner, employer or friend because some kind of document or other evidence comes to light.
Most likely, the person will have “some pretty big emotional reactions, or you might go numb,” he said. Admittedly, you were hurt and caught off guard.
Unpleasant conversations:Being a bridesmaid is expensive. Can or should you say no?
Some people who receive news of financial betrayal respond by journaling or reading, talking to a therapist, or practicing mindfulness.
“It’s time to be honest with yourself about what’s going on because your partner may not be in a place where they’re willing to be honest with you, which really complicates exposing financial infidelity.” he said.
It could also be a signal that you and your partner could use professional help, Coambs said.
A financial therapist can be a neutral third party.
“We can stand in a place where we suspend any judgment about any person and what they’ve done,” Coambs said, “and we can bring curiosity and compassion and empathy to all parties involved in trying to help them come back together around what it means to have this money between us and how to find a place of safety and acceptance.”
We want to hear from you
Here are the next Uncomfortable Money Conversations we want to cover:
◾ So you have a grown child who is financially ready to leave home but won’t?
◾ Have you gone on vacation with friends and their spending habits were so different that it made it awkward?
So have a funky Money Talk topic you’d like to suggest? Or would you be willing to be featured in a future story for your Uncomfortable Conversation? Email blinfisher@USATODAY.com with “Uncomfortable Conversations” in the subject line.
Betty Lin-Fisher is a consumer reporter for USA TODAY. Contact him at blinfisher@USATODAY.com or follow him on X, Facebook or Instagram @blinfisher. Sign up for our free The Daily Money newsletter, which will include consumer news on Fridays, here.
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