When couples marry, they take a sacred vow to stay together “for richer or poorer.” But too often, marriages end in divorce because one partner deceived the other about their finances.
Financial infidelity occurs when couples with combined finances lie to each other about money. Astonishingly, a recent survey conducted by CreditCards.com revealed that a significant 32% of adults confessed to committing financial deception, despite sharing finances with their partners.
Some of the major reasons for keeping financial secrets include:
- Control over personal finances
- Embarrassment over how finances are handled or having significant debt
- Not trusting a partner with finances
- Addictions with financial consequences
- Avoiding the subject altogether
In today’s world of online transactions and credit card offers, it’s fairly easy to hide monthly statements and mounting debt. But when two people share joint funds, other shared investments and expenses, such as a mortgage, are put in jeopardy.
So, what do you do when you have found out your spouse has a lot of debt or has been spending behind your back? In this article we will discuss the damage financial infidelity can do, and what you can do about it.
It’s About More Than the Money
Financial infidelity is a common reason for divorce today. For starters, it can damage a couple monetarily, leading to challenges in meeting financial goals and building a secure future together. The further you or your partner sink into debt, the less chance you have to save for retirement, vacation, your kids’ college education, or the home of your dreams.
But the damage can also be emotional. Your partner may not only lie about their debt but also secret bank accounts, their savings, credit cards, unexplained withdrawals, and reckless spending. This kind of lying behind your back not only impacts your finances but can also wreak havoc on your marriage and destroy your trust in your partner.
If you are considering divorce, and suspect your husband or wife has hidden assets, debt, or spending, you need to take every step necessary. Along with the strain on your finances, financial infidelity can make the divorce process more complicated. In community property states like California, both spouses are responsible for paying off debt and other payments.
Making It About You
Money is a sensitive topic and it can be difficult to discuss even after years of marriage. That’s why it’s important to be open and honest about your finances and work toward shared financial goals and transparency.
But if financial infidelity is one of the signs you got married too soon or one of the reasons for divorce, then contacting a divorce attorney should be your next step. A great law firm will have leading forensic accountants and business valuation experts on their team. Valuation and proper characterization of all community assets and debt are essential to achieving a fair property settlement. Financial infidelity can be devastating, but you shouldn’t go through it alone. You cannot change the past, but you can decide how to move forward.
FAQs
Financial infidelity is a grounds for divorce in "at fault" states and also in a no-fault divorce. Financial infidelity in a marriage, which can complicate divorce proceedings, includes behaviors such as: Concealing debt from one's spouse. Secretly making large purchases or investments.
Is financial infidelity financial abuse? ›
Financial infidelity is surprisingly common. But when one partner keeps money secrets or withholds financial information from the other partner, it might be a sign of abuse.
Does infidelity matter in a divorce settlement? ›
While California is a no-fault state, infidelity may have some influence on spousal support, also known as alimony. This doesn't mean the person who was unfaithful will necessarily pay more. It depends on whether the unfaithful spouse used shared assets to support their extramarital relationship.
Can you divorce because of financial problems? ›
Couples may discuss whether they want children, if they will finance for a new home or if they would move for better jobs. These kinds of decisions often have financial implications. If a couple comes to an impasse about how joint assets are used, it could lead to a divorce.
What constitutes financial infidelity? ›
Financial infidelity is when couples with combined finances lie to each other about money. Examples of financial infidelity can include hiding existing debts, excessive expenditures without notifying the other partner, and lying about the use of money.
Is financial infidelity worse than cheating? ›
52% of the respondents say financial cheating is just as bad as physical cheating. 12% say it's actually worse. Zodda says a little lie can cause a big problem down the line.
What are the red flags of financial abuse? ›
Unusual activity in a person's bank accounts, including large, frequent or unexplained withdrawals. ATM withdrawals by an older person who has never used a debit or ATM card. Withdrawals from bank accounts or transfers between accounts your loved one cannot explain. Large withdrawals from a previously inactive account.
What happens if someone cheats before divorce? ›
One of the ways that cheating can impact a divorce settlement is through spousal support. If one spouse can prove that the other was unfaithful, the court may take that into consideration when deciding on the amount and duration of spousal support. In some cases, the court may even deny spousal support altogether.
What happens if wife cheats before divorce? ›
Your Divorce Attorney Can Help Explain
While cheating and adultery will not affect your ability to divorce, it certainly can determine if the divorce no-fault or fault. Additionally, adultery can also have an impact on the decisions made during the divorce process, including alimony and property division.
Do I have to pay alimony if my husband cheated on me? ›
Code § 4320 (2022).) Still, because spousal support is based on need and ability to pay, it's highly unlikely that evidence of adultery would affect an alimony award under current California law. Except when one spouse is guilty of domestic violence, alimony isn't meant to punish spouses for their behavior.
After separation, men's incomes on average drop 17% while they decline 9% for women, researchers said in a blog post Monday. Employed people who went through a divorce in the past 12 months saw a 12% cut in income, earning less than peers who didn't go through a divorce.
What is the #1 divorce cause? ›
Research shows lack of commitment is the No. 1 cause for couples to get divorced. A 2013 study in Couple and Family Psychology noted that 75% of participants said lack of commitment was a major driver of their divorce; in 94% of the couples surveyed, at least one person cited lack of commitment.
How do I protect myself financially in a divorce? ›
7 Smart Steps You Can Take to Protect Yourself Financially in...
- Establish your own bank account. ...
- Monitor and separate your debt. ...
- Take control of your credit score. ...
- Consider mediation instead of litigation. ...
- Talk about retirement. ...
- Be honest. ...
- 10 Divorce Tips to Help You Prepare.
- 10 Divorce Tips to Help You Prepare.
Essentially, it's when one spouse makes significant decisions about money in secrecy. As a result, it can have dire consequences on a marriage. Almost half of the people surveyed agree that financial infidelity can be as painful and damaging to a relationship as physical cheating.
What is the damage of financial infidelity? ›
Of course, if you're married or cohabiting, financial infidelity can have significant financial effects too. Keeping information about funds from a spouse can result in them falling into debt, having to help repay your debts, or even losing their home in cases where arrears are kept quiet.
What does financial infidelity do to a marriage? ›
Financial infidelity can damage trust and undermine the financial stability of a relationship.
What kind of proof do you need for cheating in a divorce? ›
Proving Adultery in a Divorce Case
You must go beyond feelings and come up with hard proof that your spouse cheated or had an affair. Evidence could include documentation of the affair, like a photo of your spouse and their sexual partner together, or an admission by your spouse.
