Are you a victim of Financial Infidelity?

Here are some signs to identify whether you are a victim of Financial Infidelity or not:

Mr Ravi Kumar was an ambitious and a prosperous person. Throughout his career, he had made a lot of investments. But he never revealed any of this either to his wife or any of the family members. Upon his untimely death, the entire family’s future went into trouble. Had he briefed his spouse about his financials, they would have got a monetary support after his death instead of facing deprivation and embarrassment.

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In yet another instance Sushil Agnihotri came to know that his wife had a credit card without his knowledge. It happened when both of them were consulting an advisor for their retirement planning.

A similar thing was experienced by Lalita. She noticed frequent cash withdrawals from the joint account in which she and her husband were joint holders. Upon enquiring, her husband couldn’t justify those withdrawals.

All these situations point to a behavioural anomaly known as Financial Infidelity.

Often, couples don’t prefer discussing finances with each other. But when financial infidelity surfaces in an insatiable form, it can have adverse repercussions. It damages not only family’s economic well-being but also the overall marital relationship.

There are reasons why it’s always received in bad taste by the loyal party. Each family will have a set of financial commitments. It can be anything i.e. paying the bills, contributing to savings or paying off a loan.

Ideally, both the spouses are responsible for contributing towards family’s financial goals. Additionally, family income is limited, and everything has to be done within that means.

But when one party makes unplanned expenditures, it ultimately impacts the overall probability to attain common goals. The money for the unplanned purchases has to come from that fixed budget. It may create a shortfall for other priorities.

The party who digresses from the plan might not consider such behaviour as unwarranted. He/she may justify it as necessary from the perspective of need-fulfillment. On the face, it might look innocent and harmless. But it has long-run implications of putting your financial goals on the back burner.

Your spouse may feel deceived and lose confidence in you. You might be looked upon as self-centered who gives importance to his interests and for whom family goals are not a priority.

It is tough to ascertain whether you or your partner is behaving in a goal-oriented manner or not. Especially; when you are under the influence of the impulse to buy something. That unfulfilled hobby or the dress which you were planning to buy since a long-time or some kind of addiction that you picked up lately; anything can trigger you to act irrationally.

Signs of Financial Infidelity

Here are a few incidents which can be used to determine financial infidelity:

1. Making speculative investments without partner’s approval

It might be possible that one partner has put high stakes in gambling. He has done this without the consent of the other. It is a sign of financial infidelity. There is a high probability of losing money in such speculative activities.

If that happens then, the whole financial plan will go for a toss. When one is in a marital relationship, it’s each partner’s duty to consult the other before undertaking any speculative activity.

Also read: Investing in equity mutual funds vs individual stocks

2. Having bank accounts or credit cards without partner’s knowledge

Sometimes one partner holds bank accounts or credit cards about which the other partner might not know. Concealing of such critical information amounts to dishonesty and financial infidelity. After all, when the credit card debt has to be paid off, it would have to be financed from the family budget.

If the partners are already servicing an old debt, such kind of secretive credit cards might worsen the situation. It might increase the overall burden of debt on the family. If one is treading on those lines, it might increase financial risk not only for the individual but the entire family.

3. Partner is found with high-end possessions

One fine day your partner comes home sporting a brand new high-end leather jacket. You wonder where did your spouse find extra bucks to fund such expensive jacket. You ask the fundamental question: “How much was it?”

Your partner tells a lie about the price, and you find this out somehow. There are high chances that your spouse is not transparent in financial matters.

It is a worrisome situation because there’s fault in his attitude towards family’s goals. The person doesn’t mind making you upset from his deeds. Such practice continued on a guilt-free, and prolonged basis may lead to non-accomplishment of financial goals.

4. The partner doesn’t disclose his recent salary increment

You get to know that your partner has got a raise in the salary. Instead of celebrating the event with you, your spouse stays mum about it. It can be a sign of financial infidelity.

You might wonder “why would your partner conceal a pay raise?” There can be more than one reason for such delinquency.

Your partner might think that revealing the pay hike news might invite additional contribution to household expenditure from for which he/she is not ready. Or simply he/she doesn’t want to make you feel jealous at a time when you are not having a gala time in your job.

5. The partner exhibits an unusual behaviour

As a spouse, you know how your partner behaves in normal circumstances. Suddenly you find him/her behaving just the opposite of his basic nature.

He/she has been avoiding conversations with you lately, especially on financial matters. You want to discuss investment and money management issues, but your spouse shows a lack of interest.

In another case, your spouse, who otherwise spends prudently, is buying things liberally for you unreasonably. There might be a tendency to overcome a guilt arising out of financial infidelity.

How to overcome financial infidelity and restore trust

Maintaining trust is the core of a peaceful relationship. Here are a few ways by which you can restore confidence in each other.

1. Apologise

Letting the partner know that one is sorry for concealing money matters is the first step in this direction. Apologizing before the partner about one’s bad behaviour helps to show that one has become committed to family goals.

It exhibits one’s sincerity towards maintaining a cordial relationship with one’s partner. Initially, such an apology might result in unfavourable reactions from the spouse. But that’s momentary. It will take time, but the partner will understand other’s stand and eventually forgive for the wrongdoings.

2. Start discussing money

The cause of all money-related problems is that spouses discuss everything but money. It becomes difficult to keep track of finances in this way. One might be a saver while other is a spendthrift. So it might affect the achievement of family goals.

To bring a financial order, start talking everything about money. Try to understand each other’s perspective towards spending, saving and investments.

It will help to ascertain that both the spouses are on the same page. There won’t be any ambiguity in financial goal formation and achievement.

3. Designing a plan of action

After the rounds of apologies, it is time to get back to work. Both of you need to sit and plan the future course of action. It would be good to set things in place which have gone haphazard due to negligent behaviour.

It can be anything like replacing cash in the emergency fund or paying the EMIs with the required penalties to defray the accumulated debt. Transform your attitude towards family goals.

Along with this, one may pursue bigger and more important long-term goals like retirement planning and wealth creation.

4. Setting Budgets for each activity

Many times, financially irrational behaviour is caused due to lack of pre-established boundaries for expenditures. One doesn’t know where to stop and keeps acting impulsively now and then. Such activity on a prolonged basis leads to financial infidelity.

To overcome such digression, both the spouse may try setting budgets. You may classify the activities as important, urgent and peripherals. Afterwards, you may allocate fixed amounts out of total household expenditure to each of these categories.

Once the budget has been set, try not to override it. Before spending, ask yourself “is it worth the price?” or “will it affect the long-term goals?” It will help you in keeping irrelevant expenditures at bay.