It’s wedding season and as many couples get ready to say their vows, they may want to have a talk about fidelity — financial fidelity.
A study by Harris Poll for the National Endowment for Financial Education finds that two in five Americans who have combined finances admit to lying to their partner or hiding information about money matters. And it’s on the rise — 42 percent of those surveyed admitted to financial infidelity, compared to 33 percent just two years ago.
It could be something as minor as hiding a recent purchase or something more significant, like hiding a bank account. There are sometimes pleasant surprises, such as money set aside for a gift or trip, but those who study the matter say it’s typically more devious. And experts warn that financial deception, no matter the scale, can cause damage — or even end — a relationship.
NEFE found that the most common offense is that of hiding something: 39 percent have hidden a purchase, bank account, statement, bill or cash from their partner. A smaller percentage committed more serious deception: 16 percent have lied about the amount of debt they have or even how much they earn.
“When you agree to combine finances in a relationship, you are also agreeing to a certain degree of cooperation and transparency in your money management,” Ted Beck, president and CEO of NEFE said in a statement. “Yet we’re seeing the implicit promise of collaboration destroyed by financial game playing.”
It’s easy to conceal the information in the digital age — receipts can be texted and credit card statements can be emailed, leaving less of a paper trail.
While that is a component, NEFE spokesman Paul Golden says it’s difficult to say exactly why financial infidelity is on the rise. What the organization does know is that it’s more likely to occur in relationships where finances are combined and only one person assumes responsibility for managing the money. Golden said having both people involved creates a system of “checks and balances.”
The issue of deception appears to run across the board. About 46 percent of men have committed an act of financial deception and 38 percent of women. And while it happens at all ages, the practice appears more common among younger adults, with 61 percent of those ages 18 to 34 admitting to the act.
The problems often don’t surface until a major event, like buying a home, car or refinancing, forces it out. Some respondents didn’t find out about hidden spending habits till their divorce proceedings and or after the death of their partner.
The NEFE found that most of the time the deception undermines the relationship — causing arguments, mistrust and even divorce. Although a small percentage of respondents said it brought them closer because it forced them to face their financial issues together.
Money is a common topic for arguments in relationships, notes Sonya Britt, an associate professor of personal financial planning at Kansas State University who specializes in financial therapy, which she suggests for all soon-to-be wed couples. Her research has found that arguing about money is one of the top predictors for divorce.
“We are socialized to not talk about money,” Britt said. “When (couples) are dating, they are not having the conversations they need to about money. So when they are sharing a household they are facing it more intensely.”
As with many things in relationships, communication is key.
Whether a couple is just getting started or is trying to recover from a financial infidelity, the recommended steps are similar: Start with an open conversation, get on the same page and follow up regularly.
That’s not to say that couples need to report every dime they spend. NEFE says each couple needs to find a budgeting and money-management system that works for them. And the threshold for what can be spent without checking in with the other varies with each couple.
There is some good news for recent newlyweds. Research by credit reporting bureau Experian found that couples who have gotten married after the recession are more apt to talk about finances early on. But Sandra Bernardo, manager of consumer education at Experian, says they still aren’t talking to the extent they should.
“(Money is) a major dynamic in a marriage and you need to think about your goals,” she said. “And sooner or later you need to talk about it and address it, and it’s better to do that sooner.”
Tips on recovering from financial infidelityFinancial infidelity — lying about or hiding money — can cause major problems in a relationship. The National Endowment for Financial Education has a few tips on how to deal with these issues.
Talk with your partnerTalking about money can be stressful. But approach the situation knowing what you want to get out of the conversation and with the attitude that you are working together toward a solution. Try not to be judgmental. When people are put on the defensive, conversations become strained. Broach the topic at a time that is good for both of you.
Get on the same pageDecide how you want to manage your money together and how you plan to share information going forward. Establish what the threshold is for spending autonomously, which will vary greatly by couple.
Rebuild trustIf you or your partner has come clean about some financial deception it may take time to rebuild trust. It takes continued transparency, a commitment from both sides to stick to the goals and good communication to help heal.
— For more tips on how to work together as a couple, visit NEFE’s site: www.smartaboutmoney.org/