May 10, 2016
Pattie Lovett-Reid: How to avoid financial infidelity
ANALYSIS: Financial infidelity is a term used when one spouse cheats on the other, financially speaking.
They hide credit card bills because they know their spouse will disapprove of their spending habits and it isn't always to buy frivolous things. Spouses may hide the fact that credit cards may be needed for everyday living expenses. Lying to your spouse, regardless of the reason or your income level, puts a strain on relationships. Ten per cent of couples have said it was the ultimate cause for divorce, according to a number of reports.
It appears that not being entirely truthful about finances can happen fairly early in a marriage. For all the promises exchanged at the altar, parties really aren't that keen on telling their spouses what's going on in their bank accounts.
In fact, 33 per cent of newlyweds are surprised by a partner's financial situation after they were married, and 36 per cent don't know anything about the partner's spending habits, according to a recent survey of Americans by credit-tracking firm Experian Plc.
When asked what the maximum amount they would spend before discussing it with their spouse, men said $1,259, while women said $383. And men were more likely to hide money from spouses. Some 20 per cent of men said they had secret financial accounts their partners didn't know about, compared to 12 per cent of women.
Despite the importance of a healthy credit score to married life milestones such as getting a family car or a starter home, only 40 per cent knew their partner's credit score before getting married. Fifty-six per cent of those polled agreed with the statement: "Before I was married, I considered how a potential spouse's credit score could affect my finances." Credit scores were a source of marital stress for 39 per cent of newlyweds, and 19 per cent required a cosigner after getting married—about a third because of poor credit.
When you’re married, you are in it emotionally and financially. Prior to walking down the aisle, owe it to yourself and the relationship to understand the financial facts pertaining to your partner.
Financial disclosure to your spouse isn't about telling them about every dime you spend, nor is it about commingling all of your assets. It is about respect when you enter into a relationship. Naturally, there are many ways to achieve financial balance in your life, but here are a few strategies:
1. No secret bank accounts
2. Weekly financial chats on expenses - full disclosure on what you have been spending our money on
3. Big purchases are mutually agreed upon
4. Annually establish the next years financial goals and get aligned
5. Never abdicate financial responsibility to your partner - you need to be involved in your financial future
6. Mutually agree on level of spending not requiring partner alignment
Is this perfect and does it work all the time? No. But if you wish to rule out a least one leading cause for divorce — financial infidelity — to me, it all comes down to full, true and plain disclosure of your financial facts.
