The leading cause of divorce in the U.S. is financial trouble or stress. This phenomenon is bad enough, but if one spouse creates money trouble and hides it from their partner, divorce proceedings can transform from unpleasant to nightmarish.
What is financial infidelity?
The term can apply to many activities, including a spouse hiding money in a private account, lying about purchases or playing down the prices of recent purchases, withdrawing cash from a savings account, acquiring a secret credit card, or lying about a maxed-out credit card, borrowing money to cover more purchases and withholding news about a bonus or raise.
Financial infidelity isn’t always intentional or nefarious. Less deceitful actions include making significant financial decisions without consulting a spouse, allowing debt to slowly grow out of control or giving large sums of money to children or other family members.
How harmful is it?
The irony is that financial infidelity is usually not regarded as legal grounds for divorce, though perhaps it should. In a 2021 Harris poll, 85% of respondents reported that financial dishonesty by their partner harmed their relationship, and 52% believed financial infidelity is worse than adultery.
In short, the problem is more common and harmful than widely believed.
What are some financial infidelity signs people should watch for?
In the Harris poll cited above, 42% of respondents admitted to financial deception in their marriage. Remember that just one of these signs alone doesn’t necessarily mean financial infidelity is happening, but here are a few clues that might necessitate more investigation.
- Unexplained receipts or credit card purchases
- A pattern of cash withdrawals without explanation
- The appearance of a new or unfamiliar credit card
- Signs that a spouse has a private bank account
- An uptick in calls from collection agencies
- Passwords to financial accounts changing for no reason
- A spouse’s spending habits suddenly becoming extra frugal or remarkably charitable
- Missing bank or credit card statements
What should I do if I suspect financial infidelity?
If you have noticed multiple signs of deception, you can do several things to confirm your suspicions without immediately confronting a spouse and potentially forcing a new web of lies. Start by collecting bank and credit card statements as far back as possible and requesting credit reports from all three agencies: Equifax, Experian and TransUnion.
If your suspicions have been confirmed, you should contact an attorney for advice on the next steps.