Financial Infidelity in Marriages 

Infidelity, or cheating, is the act of being unfaithful to a spouse or other partner. It typically means engaging in sexual or romantic relations with a person other than one’s significant other. Various types of infidelity that involve other people include physical infidelity, emotional infidelity, and cyber infidelity, among others.  

So, it may be surprising that not all infidelity includes another person outside of the marriage or relationship. I’m referring to financial infidelity.  

What it is 

Financial infidelity is defined as, “Spending money, possessing credit or credit cards, holding secret accounts or stashes of money, borrowing money, or otherwise incurring debt, without the knowledge of one’s spouse, partner, or significant other.” In other words, one person is not being fully transparent about their finances, which puts the whole family at risk.  

One form of financial infidelity, and the one that most people assume to be the case, is hiding assets. In some states, and under certain circumstances, some assets may have and retain a non-marital status. While these assets might be totally legitimate, they may be hidden because one spouse does not want the other to have access in the event of a divorce. In some cases, this could be an indication of “divorce planning” – an attempt to tip the balance in dividing assets.  

Another common way people engage in financial infidelity is by hiding debt. This form of financial infidelity is the flip side of hiding assets. While the owner of the hidden assets aims to conceal them during a divorce, those with hidden debt aim to have the debt classified as marital, thereby including it in the marital estate. This means that the party who did not incur the debt and did not know about the debt will have to help pay it off.  

Another less recognized form of financial infidelity occurs by misleading one’s spouse about the sources and amounts of income. In divorces, especially for business owners, the “paying” spouse (the one who will be paying spousal support and child support) can develop a case of RAIDS – Recently Acquired Income Deficiency Syndrome. This is a claim that the business is down, and the income isn’t there for the support requested.  

51% 

Studies have shown that millennials are more likely to engage in financial infidelity. CreditCards.com reports that roughly 51% of millennials admit to concealing some sort of financial information from their spouses. What’s more, the financial stress put on by the COVID-19 pandemic only exacerbated these issues. Now that the pandemic seems to be abating, we are slowly returning to our normal lives. This is an opportunity to start fresh and be transparent with our partner about finances that affect the marriage’s and the family’s stability.