Financial Infidelity: What It Is and How to Recover

Financial infidelity can erode trust and derail relationships. But transparency, collaboration and careful planning can help you get back on track.

Your finances are no one else’s business. Well, no one but your partner’s, right?

When it comes to money, many couples rely on transparency in order to prepare for the future. If a partner is dishonest about their finances, it can damage more than just the bottom line.

“Finding out that my partner had been hiding a boatload of debt was a major punch in the gut,” says Michael Murphy, a 37-year-old business owner from Wyoming, United States. “Trust went out the window, and I was left feeling hurt and unsure about where we stood.”

If this sounds familiar, don’t panic; it’s possible to move past financial infidelity, rebuild trust and create a strong financial partnership.

What is financial infidelity?

Financial infidelity is the act of being dishonest with your partner about your finances. Examples of financial infidelity include lying about the amount of debt you have or the amount of money you earn, as well as hiding your spending habits.

While most (86%) Canadians say they have not been dishonest or withheld information about their debt, income or purchases to a significant other, some say they have, according to a recent survey conducted online by The Harris Poll on behalf of NerdWallet.

For example, six percent of Canadians say they have made a secret purchase that they hid from their significant other. And Gen Z (ages 18-26) are significantly more likely than Gen Xers (ages 43-58) and Baby Boomers (ages 59-77) to say they have done this (14% vs. 5% and 3%). This might suggest that members of Gen Z are more likely to commit financial infidelity, but perhaps they’re just more honest about being dishonest.

What causes financial infidelity?

Financial infidelity tends to be rooted in a person’s preexisting fears and beliefs, according to Natasha Knox, a financial planner and founder of Alaphia Financial Wellness, a holistic financial wellness service based in British Columbia.

For example, some partners may fear a loss of love, respect or self-esteem if they reveal their mishandling of money, so they hide it. Others may fear confrontation or the loss of autonomy, so they make purchases in secret to avoid a “no” from their partner.

Although it occurs across many demographics, Esanju Bonga, a registered psychotherapist based in Ontario, tends to see financial infidelity among people who are new to high levels of wealth.

“We all have different relationships to money,” Bonga says. One partner may see a sudden influx of cash as an opportunity to save, while the other may see it as an opportunity to have the things they’ve always wanted.

Being aware of your relationship to money, as well as your partner’s, can help you better understand the “why” behind each other’s behavior.

How to recover from financial infidelity

The effects of financial infidelity can be tough to move on from, but not impossible. Here are some tips on how you and your partner can repair the damage and move forward.

Present solutions and listen

If you are the one who has been dishonest, and you want to come clean, bring more than just the facts to the table. “Before you tell your partner, you need to have a plan,” Knox says. If you have hidden debts, for example, provide a strategy for paying it back, no matter how simple.

Also, invite your partner’s input. “They may have suggestions, they may have ideas, they may have feelings that need to be fully expressed and heard,” Knox says.

“We had to readjust our budget and make sacrifices to deal with the hidden debt,” Murphy says of his partner’s financial infidelity. But by setting spending limits that required mutual consent for significant purchases and implementing a monthly review of financial statements, they were able to get back on track.

Honesty is king

Be open about your financial fears and needs with your partner, and enlist the help of a financial therapist, if possible. Neutral parties with a background in financial infidelity can help facilitate the conversations and offer impartial advice to both partners.

“We had to rebuild trust. That meant being transparent about our finances, involving each other in decisions, and sticking to the plan we agreed on,” Murphy says.

Avoid punishments

Financial infidelity is not illegal, per se, but that doesn’t mean the act goes unpunished. If your partner has lied about their finances, you may feel angry and compelled to restrict their access to money.

But according to Bonga, putting your partner on an allowance can cause them to feel patronized and controlled. This may cause more distress and make them even less likely to be transparent about missteps or struggles in the future. Instead, find out where the infidelity is happening and consider specific, short-term solutions that still allow for autonomy.

“By actively involving each other in financial decisions and monitoring, you can rebuild trust and ensure that both parties feel accountable for their actions,” Murphy says.

Methodology

This survey was conducted online by The Harris Poll on behalf of NerdWallet from April 26-28, 2023 among 1,050 Canadian adults ages 18 and older. The sampling precision of Harris online polls is measured by using a Bayesian credible interval. For this study, the sample data is accurate to within +/- 2.89 percentage points using a 95% confidence level. For complete survey methodology, including weighting variables and subgroup sample sizes, please contact Mauricio Guitron at [email protected].

DIVE EVEN DEEPER

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Financial red flags, like hidden debt or excessive spending, are concerning but they aren’t always dealbreakers. Candid conversation and prompt action are promising paths forward.