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In an ongoing series, the Financial Post explores personal finance issues tied to life’s big milestones, from getting married to retirement.
Ideally, one had a conversation or conversations with their partner about financial planning before committing to a life together. How much of the money is yours, how much is theirs, and what the two of you share are critical things to figure out within a few years of the “I do.” However, sometimes, despite the best efforts of both parties, financial infidelity can occur.
Financial infidelity is not necessarily limited to couples, but occurs when one person in a group with mixed finances lies about excessively large purchases or hidden debts. In the age of email, hiding debt is easier than ever. But approaching such conversations from the point of view of the financial rake or partner in the dark is as difficult as ever.
“Every individual on the planet has a different experience with money,” said Aileen Miziolek, certified financial planner at Family Business Consulting Group. “If people aren’t self-aware (of that experience), they may be sabotaging themselves in their relationship and not even realize what they’re doing.”
In Miziolek’s experience, some of the most common root causes of financial infidelity are fear, such as fear of not having enough, coming from a less affluent background than your spouse, or a pre-existing lack of trust in the relationship. Occasionally, it’s as simple as a lack of financial education.
Sometimes, however, the cause is less complicated: the relationship lacks the necessary structures.
“One person may be fine with a loose structure, another person may need a (detailed) structure to understand how they are doing in achieving their goals,” Miziolek said. “Both people need to be aware of their own structures and both people need to be aware of the other’s and put the right structures in place to help them succeed.”
For the person responsible for infidelity, Miziolek recommends asking yourself why you are afraid to have a money conversation with your partner before committing the sin.
One response may be embarrassment, something personal finance author Kelley Keehn said is a common thread in conversations about financial infidelity that she’s been aware of.
“It’s the anger, the frustration of having to explain, it’s the embarrassment of having to hide the purchase, but they still feel justified in buying,” he said. “A very good (relationship) between parents and children.”
Ideally, both partners are as open as possible when discussing past or current infidelities. But since money is never just about money, outside help, such as a financial advisor or even a couples therapist, may be needed to overcome indiscretion.
What one partner might consider financial infidelity might not be seen as such by the other person, which can understandably complicate the idea that you both have to trust each other to make good financial decisions.
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There’s also a gray area between infidelity and annoyance, Keehn said. Something like secretly ordering Uber Eats at work every day for a period of time might not break any strict agreements a partner has, but it would be fair if the other partner was “a little upset” about the expense. The easiest way to avoid these pitfalls is to analyze your individual and couple financial needs.
At the same time, there may be future emergencies that warrant immediate expenses. Obviously, it’s a bad idea to keep these events a secret from your partner, but there’s also an ideal way to deal with them.
“You can keep the conversation focused on, ‘Well, I did the best I could with the information I had, what would you like me to do in the future? If you were in my situation, what would you have done?’” Keehn said. “I also think it’s important to forgive yourself, knowing that you did the best you could with the information you had.”
The question of whether or not couples can recover from financial infidelity once discovered really depends on the transgression in question. It matters what each one considers an infidelity and the circumstances that surround it. All relationships have an arc, and sometimes one event can end it all.
“I guess it depends on the degree of financial infidelity, how long it was going on and how shocking it was to the other person,” Keehn said. “You can safely end a relationship.”