One Saturday in my early 20s, I brought home a cute new sweater and, as I pulled it from its fresh tissue paper, announced to my roommate that it had been on super-sale. That was a lie. I had paid the full price (not that anyone had asked), and immediately felt like an even bigger idiot for claiming otherwise. But I kept doing it anyway. For years, I blurted out to strangers and friends and even my own spouse that I’d gotten a special deal on something when I hadn’t. It was weird and ridiculous for many reasons, but primarily because none of these people (including said spouse) ever cared how I spent my money, as long as I pulled my weight in our shared expenses, which I did. But still — what was wrong with me?
I’ve now learned that this behavior, particularly when it involves a partner, falls under the alarming category of “financial infidelity,” the subject of a recent study published in The Journal of Financial Therapy. Defined by psychologists as “any purposeful financial deceit between two or more individuals” who have “a stated or unstated belief in mutual honest communication around financial matters,” financial infidelity is a common phenomenon and, unsurprisingly, it correlates with lower marital and life satisfaction. It can also take many forms, ranging from my relatively benign fibs to full-blown con artistry (if it’s the latter, you’ve probably got bigger problems).
Researchers have identified 14 behaviors that qualify as financial infidelity. They include lying about a purchase (unless it’s a gift for the person you’re lying to, of course), pretending a new purchase is an old one, hiding purchases/receipts, taking money out of savings without telling a spouse, hiding credit card statements, concealing debts, opening a secret credit card, and filing for bankruptcy without telling a spouse (which seems like it would be very difficult to pull off, but has apparently been done). You won’t find many people willing to admit to having done any of these things, but a separate study by the National Endowment of Financial Education found that about 50 percent of Americans have. Meanwhile, another survey showed that people consider these actions to be an extreme breach of trust, on par with sexual infidelity. Lying is lying, after all.
But is it really? When they gathered data, psychologists found something interesting: Many people were engaging in financial infidelity without realizing it, or even knowing that they’d done anything wrong. “We found that only 27 percent of people reported committing financial infidelity, but 53 percent of the same population reported engaging in one of the behaviors that qualified as such,” says Michelle Jeanfreau, a professor at the University of Southern Mississippi. “So there’s a sizable chunk of the population that’s committing financial infidelity, but doesn’t recognize it or see a problem with it.”
Part of the reason, she believes, is that many couples don’t communicate their expectations about spending, period. As a result, many people might not see the need to tell a spouse about an expense, or understand where transparency would be appropriate. Then there’s the element of shame, which is how I’d classify my own indiscretions. I wanted to be smarter with my money than I was, so I faked it — not because I wanted to be disloyal or duplicitous, but because I was embarrassed. Hence, the large gray area: Most of us want to be thoughtful spenders, good partners, and responsible human beings, so we try to put up a good front, even when that involves a slippery slope of not-quite-facts that start to add up over time.
On a positive note, this is apparently quite normal and fixable, says psychologist Michael Mong, who co-authored a study of financial infidelity with Jeanfreau. “A lot of us aren’t raised to talk about money and spending and budgeting, and so we’re ill-equipped to discuss it with a partner,” he explains. The trick, he says, is to understand our own habits first. “Most people just don’t keep close track of their spending, and you can’t be honest about finances until you have a clear picture of your own.” This is perhaps why individuals who test as more “organized” are less likely to commit financial infidelity — when you have a sound financial plan, you have less to hide.
Which leads me to the rather anticlimactic moment in my own story when I stopped lying about my full-price purchases. A few years ago, I got sick of feeling stupid about my spending and decided get more serious about watching it. I signed up for Mint account, read through my credit card bill every week (fine, every few weeks), and even set some savings goals. It was boring, sure, but it also had the unexpected benefit of making me feel more relaxed about my finances, and more comfortable talking about them in general. Now, when my spouse asks me what I want to spend on a new couch, I actually know the answer instead of pretending I do. I’m still not great about budgeting, and I buy frivolous sweaters on a whim from time to time, but now I can admit it — to myself and to my partner, as well as to other people.
Shedding an insecurity has a funny way of getting other people to do the same. Now that I know more about my own money, it seems easier for my spouse to talk about his, and for us to hammer out clearer expectations for each other. We still keep separate bank accounts, but we know what costs we’re supposed to split, and we keep a spreadsheet of shared expenses that we settle up at the end of every month. Yes, there have been some knock-down drag-outs, but I can’t remember how any of them started, which I hope is a good sign. And no, we don’t tell each other everything about our spending, or even close — but it’s a mutual understanding, not an omission.
“It’s impossible for any couple to be 100 percent transparent with finances,” says Mong. “But as long as you have shared goals, both for the long and short term, that are manageable for both of you, then that’s a good jumping-off point for determining what merits discussion and what doesn’t.”
For some couples, this process will be a lot trickier. Researchers have found that people often marry those with opposite financial tendencies, particularly when they’re extreme (compulsive savers marry compulsive spenders, and vice versa — the “opposites attract” maxim is actually true, in this case). This sets up an inherent conflict when it comes to determining rules for how finances will be handled. But instead of just hoping for the best, or believing that your partner’s good financial habits will fix your own bad ones, you need to start where you are. And ultimately, everyone makes the occasional boneheaded purchase that they’d rather no one knew about. The ability for a loved one to shrug it off and keep going is what long-term relationships are built on.
Obviously, I’m not saying that lies should get swept under the rug, and not all financial infidelity is created equal. But how do you know the difference between a relatively harmless untruth, and something that can’t be resolved? “When a person has a continued pattern of lying, and it happens over and over despite repeated conversations about how they shouldn’t do it, that’s when you need to have some serious concerns,” says Mong. “Sometimes the issue is much deeper.” If that’s the case, spare yourself the trouble: No amount of organization, budgeting, or wishful thinking will help. Cut and run.