10 financial infidelity examples & how to easily spot the signs

Financial infidelity and divorce often go hand in hand. And it’s more common than you might think.

By Bill Kordos, Head of Family Law at Roger Fritz LLP, Melbourne.

 

Some experts believe that financial infidelity can be just as damaging to a relationship as physical infidelity and one in five Australians see it as worse. 

In one survey by US News & Report, over 30% of couples interviewed admitted to some form of financial infidelity, including secret purchases, hiding debt, and even being dishonest about income. And here in Australia, two in five (40%) of Australians don’t know how much their partner is worth.

If you’ve ever felt a twinge of doubt about your partner’s spending habits, hidden debt, or spending yourself, you’re not alone. But financial infidelity can be a tough wave to ride in any relationship. Understanding it is the first step to navigating its challenges.

 

What is financial infidelity?

Picture this: you think you know everything about your partner’s finances, only to discover that your partner has $20,000 debt or a wallet full of secret credit cards. That’s financial infidelity. When one partner keeps major money secrets from the other.

 

Reasons and examples of financial infidelity

There are many reasons that one partner might keep financial secrets. From embarrassment or shame through to addictions and intentionally hiding assets. Here are some of the most common.

Unclear boundaries and communication

Example: Brenda bought birthday presents for their Financial Institutions. She expects Bill to pay her back without discussing it first. This lack of communication over financial responsibilities can create misunderstandings and mistrust in a relationship.

Addiction

Example: Joe is battling a gambling addiction. When he secretly drains the joint account and loses it all, he’s too ashamed to confess to his wife, so he moves money around to hide the loss. 

Addiction, whether to drugs, gambling, or even sex, can drive people to make financially destructive decisions. They then hide these decisions out of guilt or even denial.

Control

Example: Sarah insists on managing all finances. She gives her partner Mark an allowance and requires that he give her receipts for all his spending. This kind of control is a form of financial infidelity because it creates distrust between a couple. It could happen because one partner feels a need to dominate the other or simply doesn’t trust the other’s financial decisions.

Narcissism

Example: Alex buys luxury items for himself while ignoring the family’s needs and budget. He simply believes he deserves it more. Alex’s self-centred behaviour can lead to significant financial troubles. It can also lead to resentment in the relationship and the family as a whole because he treats himself better than he treats others in the family.

Physical infidelity

Example: Lisa secretly pays for lavish gifts and expensive overnighters for someone outside of her relationship. This is a physical affair, but it’s also draining the family’s savings. Affairs often involve financial deception, which adds another layer of betrayal.

Fear

Example: Jack has lost his job, but he’s afraid to tell his wife, Emily. So he hides his job loss from her and continues to spend money, as usual, to avoid confronting the issue. 

Often, the fear of a partner’s anger, fallout, judgment, or even having to have a confrontation can lead one partner to hide significant financial information from the other. But doing this just leads to an exacerbation of all those possibilities and financial distrust as well.

Sexism

Example: Tom believes his wife shouldn’t handle money, feeling that it’s his responsibility as the man. So he invests their savings as he sees fit without her knowledge or input. This type of sexism in financial decisions can lead to power imbalances, undermine relationships, and sow more mistrust.

Revenge

Example: After a fight with her partner Matt, Emma splurges on high-end designer items on a shopping spree. She knows it will hurt her partner financially, and she’s using her spending as a tool for revenge. This kind of behaviour is damaging to both the couple’s financial situation and the stability of the relationship.

Independence

Example: Maria opens a separate bank account which she doesn’t tell her husband about. Her idea is simply to save money for her personal goals. While trying to establish financial independence is a good thing to do, keeping it a secret from your partner is a form of financial infidelity, and it can create feelings of betrayal.

Preparing for separation

Example: Sarah is unhappy in her marriage and wants to divorce her husband. But she worries that she will be left with nothing when she leaves. In anticipation, she begins squirrelling a bit of money away in a secret account each week without her husband’s knowledge. 

This is also a type of financial infidelity. And at the end of the day, it simply won’t work. During divorce proceedings, Sarah will have to reveal the money in the account and it will form part of the property pool. And if Sarah continues to try to hide assets she might find she’s now on the hook for her ex-partner’s legal fees, that her application is dismissed or even that she’s found in contempt of court.

 

Is financial infidelity a crime in Australia?

In Australia, financial infidelity itself isn’t a crime. But it can have legal ramifications, particularly in divorce cases. While The Family Law Act 1975 also doesn’t explicitly name financial infidelity in its terms, case law does show that non-disclosure, hiding assets or trying to keep money secret plays a significant role in how the property pool is ultimately divided.

 

10 signs of financial infidelity

If you are wondering whether there might be financial infidelity in your relationship, here are 10 signs to look out for.

1. Hiding debt

You’ve uncovered loans or credit card debts kept secret by your partner.

2. Evasive or defensive responses to normal questions

Your partner is unusually defensive or evasive about financial questions.

3. Concealing spending

You’ve found secret credit cards or noticed unexplained purchases that seem to indicate that your partner is spending money without your knowledge.

4. Overspending without agreement

Your partner makes large purchases without discussing them with you.

5. Unexplained shortages

You find that your account balances are regularly less than you expect. 

6. Complete financial separation

Separate bank accounts is fairly normal, but complete financial separation might be a sign of financial infidelity.

7. Hidden assets or investments

You’ve found bank accounts, property holdings or investments that you knew nothing about.

8. Unexplained changes in financial behaviour

Your partner suddenly changes their financial behaviour, like becoming overly frugal or much more secretive.

9. Opening new forms of credit

Your partner opens a secret credit card or line of credit in one or both of your names.

10. Getting you to execute documents without reading them

Your partner asks you to sign documents but says there’s no reason to read them.

 

Each of these signs in and of themselves may be no big deal. But if you find more than one is evident in your relationship, or you just have a bad feeling about something, it’s best to speak to your partner or investigate further. 

 

Can your relationship heal from financial infidelity?

Healing is possible. Open communication, setting clear financial boundaries, and seeking professional advice, both legal and through counselling, can help rebuild trust. But it will take time and effort.

With honesty, effort, and maybe a bit of legal guidance, couples can find their way back to financial harmony. Remember, you’re in this together. 

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