How fear of judgment feeds financial infidelity

A new survey sheds light on a worsening trend of financial dishonesty between couples

How fear of judgment feeds financial infidelity

When two adults in a committed relationship combine finances, it’s an act of trust: both of them are committed to making financial decisions and being open about their monetary situations as partners. But a new survey suggests that couples aren’t being as transparent as they should.

“The latest from our biennial survey finds that of the 62% of adults who combine finances with a partner or spouse, two in five of them commit financial deceptions,” said Ted Beck, president and CEO of the National Endowment for Financial Education, in a column for the Wall Street Journal.

Beck pointed out the potentially high stakes of financial infidelity — unpaid bills for low-income households, hidden personal accounts, irreparable challenges to relationships, and so on. While another survey by his organization found that 86% of couples discuss money before getting married, the phenomenon persists.

“Ultimately, financial infidelity occurs– and keeps occurring–because people are embarrassed or fearful of negative judgment,” he said. In the National Endowment for Financial Education’s latest survey, 44% of respondents said they keep financial secrets because they knew their partner would not approve of how they spent money. Spender-saver couples, for example, might include one partner who spends money outside of an agreed-upon budget, while the other might deceptively hide money from their partner.

“I am most surprised that one in three (36%) say that although they are sharing finances in a committed relationship … they still believe some aspects of their finances should be private,” Beck said. “You’ll talk to your spouse about your weight and even their family. Why not money?”

To combat financial infidelity, he argued, there should be regular conversations where each person understands the household finances and assumes an equitable level of input. While some degree of specialization may make sense for a time, leaving only one person to handle all the finances opens the door to risks. Partners should also identify their money priorities as well as their partner’s, from which they can start candid conversations.

A useful compromise, he suggested, is to consider a joint checking account for household bills, and separate accounts for personal spending.

“With such a separate account, it’s crucial that each partner not judge the other partner – and that they keep all negative thoughts about how the other partner spends to themselves,” he said.