How Financial Infidelity Threatens Relationships

We judge people by their actions, including their spending habits. We use labels like stingy, irresponsible, generous, poor, immoral, or successful—all based on how someone spends money or how much they spend.

We also judge our romantic partners based on their spending habits. It is easier to make such judgments in an intimate relationship because one has more opportunities to observe how their partner spends money (e.g., donates to charity, supports a parent, gambles).

So, how do opportunities to observe financial decisions by a romantic partner influence behavior? In a paper published in the Feb. 2022 issue of Current Opinion in Psychology, Olson and Rick provide answers.

Observation of Spending Habits in Romantic Relationships

Based on their spending tendencies, we can divide people into spendthrifts and tightwads:

“Spendthrifts do not experience enough pain for their own good, leading them to spend more than they would ideally like to spend. In contrast, tightwads experience too much pain for their own good, leading them to spend less than they would ideally like to spend.”

A complicating factor is that spendthrifts and tightwads are sometimes attracted to each other. Why? Because opposites attract, particularly when an individual’s object of attraction resembles their ideal self. Specifically, individuals who dislike certain personality traits in themselves, like their spending habits—whether they consider themselves stingy and miserly or prodigal and wasteful—may be drawn to romantic partners who do not possess the same traits. In these pairings, fighting over money is to be expected.

However, constant arguments about money have a negative effect on relationship satisfaction and the mental health of the couple.

To reduce money fights, one solution is for the spouse with more self-control to occasionally cater to the partner’s preferences with less self-control.

And the spouse of the individual with more self-control needs to understand that their partner spending less on, say, a birthday gift, does not reflect a lack of commitment or love.

Another “solution” some choose is not to observe how their romantic partner makes certain household financial decisions.

This is not unusual because, in the early stages of many relationships, one member of a couple is often assigned a Chief Financial Officer (CFO) role—a decision not necessarily based on financial knowledge or experience but on time availability and willingness to deal with finances.

Of course, this means only the person who initially took on the role gains more financial literacy over time. A danger of such a system is that if the CFO suddenly becomes unavailable (e.g., due to illness, separation, or divorce), the other partner will feel overwhelmed and unable to handle the finances.

Financial Infidelity in Romantic Relationships

Some married people engage in financial infidelity—hiding their money, assets, inheritance, purchase receipts and bills, or other evidence of their financial behaviors from their romantic partner.

Or they lie about how much they earn, how many bank accounts they have, the money they have saved, how they spend their money (e.g., gambling), the price paid for purchases (e.g., “these shoes were on sale,” “the game console was purchased with store credit,”) etc.

Why do they lie, mislead, and deceive their romantic partner? Among other reasons, to avoid feeling judged, arguing over money issues, or upsetting their partner.

Nevertheless, financial infidelity can create emotional distance and reduce intimacy. And when a partner discovers the other’s secret financial behavior, they may feel betrayed. These feelings of betrayal might be similar to those associated with emotional or sexual infidelity.

This is particularly the case if the romantic partner’s financial behavior has been ongoing or due to concerns about major financial decisions and issues, such as accumulating debt. In fact, in some cases, financial infidelity could result in separation or divorce. As the authors noted, “secretive debt accumulation has ruined many relationships.”

One way of preventing financial infidelity is to have joint bank accounts. Joint bank accounts may encourage more responsible spending, less financial conflict, more intimacy, and higher relationship satisfaction.

An important question is whether financial infidelity is always dysfunctional. To illustrate, what if an individual believes going out to eat with coworkers once or twice a week will improve their mental health and work motivation, whereas the individual’s romantic partner believes it is wrong to spend money on these “everyday luxuries”?

So, should the individual reveal this information (i.e., about having gone out to lunch) to their partner, knowing it will likely lead to arguments and harm the relationship? Or might discussing these differences of opinion eventually result in greater understanding and an eventual agreement? There is no simple answer.

Understanding Your Romantic Partner’s Financial Decisions

Let us end with some suggestions regarding managing finances as a couple.

1. Do not make assumptions until you have sufficient information about your partner. For instance, even if your romantic partner appears financially responsible and frugal early in the relationship, you may later discover evidence of financial infidelity.
2. When reflecting on your partner’s behavior, take note of everything relevant, not just actions that stand out. To illustrate, even a Scrooge-like person might occasionally spend lavishly to impress special clients or business associates.
3. Understand the reasons behind your romantic partner’s financial behavior. For example, if your new romantic partner spends conservatively, it can be tempting to assume they are close-fisted and penny-pinching. However, consider other possibilities: Your partner could be less impulsive and spontaneous than you, value saving money for long-term financial goals (e.g., buying a house), practice frugality for religious reasons, or simply enjoy the resourcefulness and inventiveness of being frugal (e.g., finding clever ways to repurpose household items).

Needless to say, if money fights become frequent, consider couples (or individual) therapy to get at the root of the problem.

To find a therapist near you, visit the Psychology Today Therapy Directory.

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