Could Financial Infidelity Sink Your Relationship?

It's probably better to just come clean.

We all tell white lies here and there to spare people's feelings, but when you're lying to your partner about where your money goes, it's not quite so innocent. It might just be a small omission here and there at first, but this sort of behavior can escalate over time and lead to serious problems.

It's a lot more common than you think. About 45% of all couples have committed at least one act of "financial infidelity," according to a recent survey by Bread Financial. Coming clean about this may not be easy, but it could be the right decision for your relationship going forward. Here's how to do it.

What is financial infidelity and why does it matter?

Financial infidelity is the act of hiding purchases from a partner or otherwise lying about where your money goes. While people of any age can be guilty of this, it's more common among younger adults. Over half of Generation Z couples admitted to financial infidelity, according to the Bread Financial survey.

Part of the reason it might be more common among this age group is because younger adults, particularly those who aren't married yet, often have separate financial accounts from their partner. This makes it easier to conceal your spending habits than it is when you have a joint bank account.

Financial infidelity doesn't always have to mean hiding big purchases, although it can. But it could also mean concealing that you've been buying expensive coffees from your favorite cafe every single day rather than using the new coffee maker your partner got you. Or it could mean fibbing a little about how much you spent on the new clothing or accessory you just bought.

These things might seem harmless at the time, but if you do this often, it could lead to serious miscommunication about how much money you have or how long it'll take you to save for your long-term goals. It could also lead to arguments with your partner if they discover you're routinely lying about your spending habits.

Most people would agree that it's probably OK to conceal holiday or birthday purchases from your partner, at least until you're ready to hand them over. But if concealing your expenses has become a habit, it's probably best to come clean.

How to end financial infidelity

The first step to ending financial infidelity is to be honest with yourself about what you're doing and how often it's happening. If you can't remember how many things you've bought recently without telling your partner, look back through your bank and credit card statements to get an idea.

Then, schedule some time to talk to your partner about what's going on. Be transparent with them and explain to them that you'd like to communicate more openly about your spending going forward.

Next, figure out a budget that will work for the two of you so you don't need to hide anything anymore. Start by figuring out how much money you have coming in each month. Then, subtract the money you spend on essentials, like housing, insurance, and groceries. Next, agree on what to do with the rest. You might be saving up for a long-term goal, like buying a home, or you could invest it if you don't have any immediate plans for that money.

If you have debts, especially ones that your partner didn't know about previously, make repayment a top priority. Decide whether you'll pay it down on your own or if you'll work together and come up with a strategy. You could use a balance transfer card, for example, if you have credit card debt. Or you could take out a personal loan if you prefer a predictable monthly payment.

Be sure to include some money that each of you can spend guilt-free in your budget. You may want to set a monthly discretionary spending limit for each of you. Or you can agree that you'll get each other's approval for purchases over a certain dollar amount. Figure out what works best for you.

Finally, know that it might take some time for your partner to get over your financial infidelity, especially if it was severe. Do your best to show that you're sincere about making a change and give them the time they need to process everything. Hopefully, you can find a way to move past it and develop a better relationship with money and each other.