He Cheats, She Lies: How to Cope With Financial Infidelity

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"Oh, don't worry, it was marked down to 50% off." "Of course I remembered to pay the credit card bill on time." "That old bank account in my name? I forgot that was even open."

We all have money secrets. For this article, I asked a few pals to reveal any financial fibs they've told their significant others (or, for an added layer of anonymity, verifiable ones told by other friends).

No one needed much time to mull. The scenarios ran the gamut -- from the $200 in parking tickets (paid in cash to avoid detection) to the $60,000 in credit card debt that a friend's friend failed to mention to her fiancee until after they said their "I dos."

The amount of the infraction in each case mattered, but not nearly as much as the non-financial fallout: In each case, a trust had been breached, a financial infidelity committed.

The lies we tell
You may think you're being stealthy -- disguising that new designer purse's true provenance by transferring it to a discount-store sack before you bring it home. (Trust me, the shopping bag switcheroo is a time-honored classic ploy.)

The kinds of financial fibs couples tell are pretty universal, too. Top-secret topics include:

  • How much we actually spend (both on individual items and overall)
  • Past money mistakes ("That old bankruptcy? Oh, that was eons ago.")
  • How much we really owe (everything from credit card debt to personal loans to collection accounts)
  • Our secret stash of cash (yup, more than 30% of couples admit to squirreling away money that they keep on the down low)

When the truth comes out about our spending, our debts, our old IRS issues and new bank account statements, all eyes turn to the bottom line. It's tempting to keep your tiff focused on the black-and-white dollar amounts. That math is easy. Dealing with the fuzzier underlying issues -- the mistrust, fear, anger, deception, sadness, etc. -- well, there's no calculator that I know of that can reconcile a relationship.

Don't call it splitsville yet. You can bounce back and live financially happily ever after -- and maybe even strengthen your relationship and your finances in the process.

Revisit your vows
This is an issue worth working hard to overcome, given that money is one of the top fighting topics among couples. Learn to successfully navigate this issue (on a regular basis, mind you) -- develop ways to alleviate the tension over money in your relationship -- and you'll have to find something else to bicker about in hushed tones so the in-laws won't overhear.

Your vows said you'd stick together "for richer or for poorer." (Obviously, the former's a lot more fun than the latter.) Keep that in mind as you face your financial infidelities.

Set a date to spill the beans. Put all your cards on the table -- literally. Review what you own and what you owe (jointly, separately, and yes, secretly). Uncross your arms, don't roll your eyes, and make no judgments. 'Fess up and face this stuff together.

Focus on what really matters. Not every money issue needs to turn into a formal financial summit. Reduce the number of potentially contentious interactions by picking your areas of "discussion" carefully.

Use concrete examples of what is making you uneasy: Instead of talking in the abstract (e.g., "I get worried about what we have in the bank"), be specific (e.g., "I'd feel a lot more secure if we had $3,000 in our emergency fund"). Ask your partner to do the same.

Give each other some space. No matter how you set up your accounts or where you fall on the money-management spectrum (from micromanager to complete cash slacker), it's important for each person to have financial autonomy. Things like walking around money (e.g., you each get a weekly "allowance" to spend however you see fit) and clear decision-making guidelines (e.g., "no purchases of more than $100 without consulting the other") will reduce the number of potentially contentious interactions over cash.

Look forward. Yes, the past matters. But more important is what you do from this day until death do you part. Pick goals that keep you both jazzed about what's in store for your relationship. Plan your vacation, early retirement, or home addition. Then map out the money details that will get the job done. Yes, some will be unpleasant (for example, paying off $60,000 in premarital debt). However, when you have goals to keep you excited, that makes dealing with the daily money struggles a lot easier.

No more secrets!
Here's a handful of other things your honey has to know:

  • The "rules" of engagement for every money talk. The best way to divorce-proof your finances is to establish some financial ground rules. These five ways not to fight will get you started and help keep the peace.
  • Where you filed important forms you'll need -- like your health-care proxy and financial power of attorney -- in case either of you is physically unable to make medical or financial decisions on your own. Bummer, yeah. But it'll be even worse if you don't have these five critical documents.
  • Why you insist that both of you have credit cards solely in your own names. It's not a trust issue -- it's essential. Sometimes, love and credit don't mix.
  • The stupidest purchase you ever made. Don't worry, they'll have to 'fess up, too. Find out the answer to that question and other little-known-financial-facts about your sweetheart in our guide, "How to Manage Money With Your Mate."
  • The best investing strategy for both of you. Here's how to invest together happily ever after, even if one of you is a risk-taker and the other a worrywart. senior writer Dayana Yochim is The Motley Fool's consumer-finance expert and author of The Motley Fool's Guide to Couples and Cash. Dayana is a frequent "phone a friend"/"referee"/"tie-breaker" when her coupled friends get in financial tiffs. The Fool has a disclosure policy.

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Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On April 16, 2010, at 10:58 AM, TMFTurtle wrote:

    My sweetie and I have weekly family meetings, one bit of which is a review of the money -- what we've got, what's coming up, and things we might put on the "to-be-bought" list. It's amazingly helpful.

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