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| Capitalstars Investment Advisor |
Financial infidelity is more common than we think. There are some harmless forms, where the couple simply hides a spend to avoid an argument. Then there are serious forms where the family’s long-term financial goals are put to risk.
A friend called in a panic. Amidst tears, she declared her marriage was over. She could not live with the man who had cheated her. What happens to the children and their future? The issue was not the discovery of another woman in their lives. The husband was guilty of financial infidelity. He had built up a credit card debt of lakhs, mostly due to his gambling habit. What began as a weekly hangout with friends for a few games of poker, had become an addiction. The wife knew and approved of the outings as his stress buster. She did not know he had become addicted and set up a completely secretive operation. There was a new card, a new email, and now mounting dues he had hoped to pay off from gambling gains that never came.
Financial infidelity is more common than we think. There are some harmless forms, where the couple simply hides a spend to avoid an argument. Then there are serious forms where the family’s long-term financial goals are put to risk. There are many variations to this theme.
Hiding income from the spouse is one. There are many reasons why couples do not discuss their actual earnings with the other. There are men who believe their earnings are not adequate, or that the wife might not respect them enough if they knew what they earned. There are women who think their incomes are too low compared to the husbands, that they prefer to not talk about it. Lying about income can come from several issues of guilt, fear, or embarrassment.
We have heard of people who lost their jobs but pretended to go to “work” every day. Some lie about their income and increment, even to the spouse, to earn their acceptance. These are instances where earnings are indicators of performance, competitive status, and social acceptance. Without a marital relationship of trust and communication, the deceit can get perpetuated.
The primary reason for financial infidelity is the avoidance of conflict. Couples do not wish to bring into the open issues that can trigger arguments and drive a chasm in the relationship. Attitudes towards money are molded, among other things, by upbringing and life experiences. For two individuals brought up with different family values, arriving at a consensus about many household decisions is tough.
A friend of mine carries a tiny pair of scissors on her shopping trips. On her way home, she clips off the price tags on all her purchases. She resents her husband asking the price when she shows him what she bought. He disapproves of anything he sees as expensive. While she prefers branded clothes and pays the premium, he sees it as vanity and a waste of money. To avoid his lectures, she hides her purchases from him.
Some belief persuasion and nagging work best. Compromises may be forced and may not hold for too long. They may find themselves breaking promises and reluctant to let the partner know.
Sometimes, couples just tire trying to get the partner to see the merit in their argument. I know of women who support their parents without the knowledge of the spouse. They do not hope to get approvals for such expenses in a traditional household that expects the woman to severe her relationship with her maternal home. They believe their behavior is justified as the cause is worth the defiance.
Conflicting goals for living, secret feelings of guilt and embarrassment, and well-concealed addictions and habits are among the drivers of financial infidelity in couples. Arriving at an understanding seems too difficult to achieve. Getting into long-drawn and emotionally charged arguments is thus avoided.
There are a few ways to think about this problem. First, it is easier to set boundaries and rules, rather than seek consensus and conformity. Two individuals who are independent in their ways, maybe attracted by their contrasting natures. That very basis for attraction makes it impractical for both to agree, compromise and confirm on matters personal to them.
Instead of expecting the husband to seek approval for every spend, or the wife to limit the money she spends on clothes and shoes, it might be feasible to divide the household income into three. One for him, one for her, and one for the family. If both contribute to the common pool that protects all long-term goals and commonly agreed priorities of the household, the portions set aside for themselves leaves them with discretion to spend and allocate as they wish.
Second, trust is precious both for the difficulty in earning it and keeping it. People differ in their ability to trust and be trusted. Partners should strive to set principles that are trust reinforcing: transparency, disclosure, sharing, and communication are all key drivers of trust. Keeping joint accounts, ensuring that account information is shared, working on financial decisions keeping the other fully informed, are all financial trust-building activities.
Third, if consensus is difficult, co-operation is always possible. Couples with diverse preferences and attitudes make for a strong team, as they bring in complementary skills. They can decide to share the financial decision making and responsibility, based on specific strengths. If the wife does budgeting and accounting, the husband can do planning and taxation. Shared responsibility can provide immense opportunities for communication, discussion, and therefore, understanding and trust.