Financial infidelity is more common than some care to believe, and it often blindsides people who believe they are in a solid relationship, writes Ric Edelman, CEO of Edelman Financial, in a
CNBC guest commentary.
Financial infidelity includes hiding credit card purchases, spending or assets. It also includes lying about income or debt.
One in three adults who have combined their finances in a current/past relationship admit to committing financial infidelity against their partner,
a survey from the National Endowment of Financial Education (NEFE) found.
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While some people are able to keep their secrets well-hidden, it's sometimes obvious that there's a problem.
One indication is when large amounts of money cannot be accounted for, says Edelman, recounting the story of a couple who could not explain where $300,000 of their income had gone.
"In my experience, there are only four reasons that money seems to vanish with no explanation — a marital affair, drug or alcohol addiction, a gambling problem or compulsive shopping," Edelman writes.
"People commit financial infidelity because although they are sharing everything with their partner or spouse they believe that certain parts of their financial situation still should remain private," Patricia Seaman, senior director of NEFE, explains.
"Additionally people are afraid of what their partner is going to say, how they will be judged or they may be embarrassed," she adds.
Still, whatever the reason, financial infidelity can be just as significant among couples as emotional or sexual infidelity is, NEFE finds.
In fact, 76 percent of the NEFE survey participants said financial deception affected their relationship. And
another NEFE survey found that 16 percent of marriages ended because of it.
But, financial infidelity does not have to destroy relationships if a couple is willing to make it work, Edelman explains.
Anyone who isn't being honest — whether it's secret spending or hiding income or debt — should start by coming clean. That may require sharing information like credit reports, pay statements, bank records, insurance policies, debts and investments for the first time, he advises.
To avoid secret spending, Edelman says one of his colleagues encourages couples to agree that each can spend a preset amount each month, however he or she wishes — no explanations, no guilt.
If financial infidelity has led to financial problems, don't cast blame, says Edelman. That serves no useful purpose. Instead, focus on how to move forward. Otherwise, the conversation, or even the relationship, might end abruptly and negatively.
It can take time to rebuild trust, and getting back on course may require shared sacrifice.
So, "be willing to adjust your spending habits and lifestyle as necessary — even if you feel the problems are your spouse's fault," Edelman suggests.
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