By Ayo Mseka
A poll from the National Endowment for Financial Education (NEFE) analyzing financial infidelity among U.S. adults finds that among those who report having ever combined finances in a relationship, two in five (43%) confess to committing an act of financial deception.
Eighty-five percent of those individuals said the indiscretion affected the current/past relationship in some way.
“When you commingle finances in a relationship, you’re consenting to cooperation and transparency in your money management. Regardless of the severity of the act, financial infidelity can cause tremendous strain on couples—it leads to arguments, a breakdown of trust, and in some cases, separation or even divorce,” said Billy Hensley, president and CEO of NEFE.
Financial deception or infidelity is an act of deception by one partner in a relationship in which finances are combined. Examples of financial deception include hiding purchases, money or accounts, lying about the amount of income earned, debt owed, and more.
“NEFE’s polling provides a snapshot of issues that stand out in Americans’ consciousness when thinking about their finances. When two in five people admit to committing financial infidelity in a relationship where money is combined, it highlights the need for greater communication and a deeper understanding of who your partner is financially,” Hensley added.
One of the main highlights of the survey is the number of people who were willing to admit to financial deception in combined accounts, noted Paul Golden, spokesperson for the NEFE Foundation.
Another highlight is the effect of this financial deception: it often led to arguments, fights and less privacy among the couples. However, the silver lining in all of this is that the deception caused some couples to become closer. For example, some respondents were able to use a financial infidelity to make their relationship stronger and 16% said the deception helped them communicate more proactively.
Many types of financial deception were highlighted in the survey. Over one third (39%) of participants admitted to hiding a purchase, bank account, statement, bill or cash from their partner/spouse, and about one in five admitted to lying about finances, amount of debt owed or amount of money earned to a partner/spouse.
Reasons Financial Deception
When asked for reasons they had committed a financial deception, about 38% of participants said that they believe some aspects of finances should remain private.
This was followed by fearing disapproval by a partner/spouse in a relationship in which discussions of finances had already occurred (34%), being embarrassed or fearful about their finances (33%), and fearing disapproval by a partner/spouse in a relationship in which discussions about finances had not yet occurred (27%).
More than eight in 10 (85%) of study participants said that financial deceptions have affected their current/past relationships where finances were combined. The outcomes include causing an argument (42%), less trust in the relationship (32%), less privacy in the relationship (20%), and leading to a separation of combined finances or divorce (16% each).
Preventing Financial Deception
To help prevent financial deception, couples might want to look for warning signs in their partners, such as their wanting to intercept bills or receiving bills via email, Golden said. It is also a good idea to work with a financial therapist or coach to have a neutral third party who can talk to the couples about money.
Financial advisors can also play a role in reducing financial deception by looking out for warning signs about financial deception in the couple, and talking to them about those signs, Golden added.
To avoid financial issues in a relationship, couples should discuss how they’d like to combine or not combine their finances before doing so, or before deciding to cohabitate. In addition, they should discuss their financial goals, make sure they’re on the same page as far as these goals are concerned, and monitor any progress made.
This survey was conducted online within the U.S. by The Harris Poll on behalf of NEFE between June 28-30, 2021, among 2,073 adults.
Ayo Mseka has more than 30 years of experience reporting on the financial-services industry. She formerly served as Editor-In-Chief of NAIFA’s Advisor Today magazine. Contact her at amseka@INNfeedback.com.