Welcome back to Uncomfortable Conversations About Money, a new series where we tackle topics or situations around money that make you uneasy. We’ll outline the problem and provide practical solutions.

The Dilemma

  • A wife with a habit of buying—and hiding—expensive shoes from her husband.
  • A husband with a secret online gambling addiction.
  • A partner racking up credit card debt without the other partner knowing.

These are all examples of financial infidelity.

what is financial infidelity?

“At its core, financial infidelity is a breach of trust around what you’re doing or not doing with money,” said Ed Coambs, a financial therapist.

“We engage in financial infidelity to protect ourselves from relational pain or to avoid evoking discomfort in our partners,” he explained.

Coambs is the past president of the Financial Therapy Association, an organization of professionals with combined expertise in therapy and financial planning. He’s also the author of “The Healthy Love & Money Way” and hosts a podcast called “Healthy Love and Money.”

Financial infidelity can occur in any type of relationship, including with a spouse, partner, sibling, parent, friend, employer, or even against yourself, Coambs said.

You’re being unfaithful to yourself when you’re not realistic about your finances or avoid your relationship with money. “It’s like cheating on our own integrity around what we want to be doing with money,” he said.

Financial infidelity often arises when there’s an underlying issue in the relationship that makes it unsafe or unacceptable to be honest about spending. “When we fear criticism, shame, or judgment for our financial actions, we’re more likely to hide them,” Coambs noted.

This can mean hiding shopping habits, failing to pay taxes, or not disclosing financial issues to adult children during estate planning.

More than 40% of People Have Committed Financial Infidelity

Financial infidelity is quite common. A 2021 study by the National Endowment for Financial Education found that two in five (43%) people in a relationship confessed to financial deception, with 85% stating it affected their relationship in some way.

A more recent study by Vericast found that 53% of people believe hiding finances from a significant other is a betrayal of trust.

Business Stress and Self-Worth Led to Therapist’s Financial Infidelity

Coambs himself committed financial infidelity about seven years ago. He and his wife, Ann, agreed he would use credit cards to start his therapy business, with a limit of $10,000. However, due to business difficulties and feelings of inadequacy, Coambs accumulated $30,000 in debt without telling her.

“When it came to light, she was really disappointed and frustrated, and she had to shoulder more financial responsibility,” Coambs said.

His desire to avoid disappointing his wife led to betrayal instead.

“It led to some really difficult conversations,” he said. Coambs and his wife sought couples therapy to address the underlying issues and repair their relationship.

No Single Reason for Financial Infidelity

Financial infidelity can stem from various reasons. A secret gambling addiction is often rooted in a mental health issue. Cultural differences can also play a role, such as one spouse feeling obligated to support parents while the other doesn’t share that view.

When It’s Self-Protection, Not Infidelity

In cases where a spouse is in a dangerous relationship and sets aside money to escape, it’s considered financial self-protection, not infidelity.

“The time to be fully honest about finances is when there’s relational safety and an expectation of compassion and empathy from your partner,” Coambs said.

Expert Advice

How does one come clean about financial infidelity?

“In an ideal world, approach your partner with emotional resolve and say, ‘I need to invite you into a difficult conversation about our finances. Are you in a place where we can talk about something likely to make both of us uncomfortable?’” Coambs advised. This approach prevents blindsiding your partner with the news.

Most patients express a desire to discuss the issue safely and respectfully to avoid regrettable actions or words.

What’s the advice for the other party? Often, financial infidelity is discovered through documentation or other evidence, leading to strong emotional reactions or numbness. Acknowledge your feelings of hurt and being caught off guard.

Some people find journaling, therapy, or mindfulness practices helpful in processing the news.

“It’s a time to be honest with yourself about what’s happening, even if your partner isn’t ready to be honest with you,” Coambs said.

This might also indicate the need for professional help. A financial therapist can serve as a neutral third party, suspending judgment and bringing curiosity, compassion, and empathy to help partners reconcile and find safety and acceptance in their financial relationship.

We Want to Hear From You

For our next Uncomfortable Conversations About Money:

  • Do you have an adult child who is financially ready to leave the house but won’t?
  • Have you gone on vacation with friends whose spending habits made it awkward?