I recently stumbled across a whole world of financial secrets and intrigue. It happened like this…
Having been a keen trail runner for a number of years, an injury towards the end of last year forced me to consider some alternate forms of exercise and so it happened that I was in the market for a mountain bike. I chatted to a few friends who are regulars and consensus was that I would need to spend at least R25-R30k to get a full suspension (better than entry-level) bike.
Trying not to be financially impulsive I gave it quite a bit of thought and did my homework. I also chatted to my wife about it and in the end we decided that there was no way that I was going to spend so much money on something that I might not actually enjoy doing. In the end I settled for a substantially smaller amount while I decide if it is something that I really enjoy doing (I can always upgrade later if necessary).
When I told my friends of my decision I was called an “idiot” (to be polite). I mentioned the reasons for the decision and also that I had discussed it all with my wife. This was met by stunned silence and then the following “you just broke the cardinal rule; you never tell your wife what you spend on a bike. And what colour is it? Because now you will have to keep to that colour so that each time you upgrade, she won’t notice”. I thought they were having me on but I soon discovered that there is a whole world out there where people are spending fortunes on bikes and their partners are none the wiser. I heard of a guy who keeps his second bike in the roof, another who keeps his second bike at a friend. Still another who has a separate “bike” credit card that his wife does not know about…and so it goes on!
I used to be part of a guy’s book club and we really did read books (at least for the first 3 years) and then the reading took a bit of a back seat as we started dealing with some of the life issues we all face. One guy’s mother died, one was completely estranged from his father (who later died but not before they were reconciled as a result of our talking about it) and one of the guys ended up having an affair – he left his wife and 2 beautiful young girls for a divorcee with a young son. I remember one evening when we discussed how affairs happened (before he ran off) and he informed us that they are a bit like the alphabet – you don’t go straight from A to Z, but rather you go from A to B to C and so on, one small step at a time, until you finally go from Y to Z…it’s the innocent flirting, coffees and lunches, emails and phones calls and each little encounter is a step closer to the “end” when you finally find yourself at “Z”. Pity he never followed his own advice.
In the USA, 51% of marriages end in divorce and almost 80% of couples cite “money” as the primary cause of the marital demise.* The National Endowment for Financial Education (in the US) also found that 31% of people who combined finances have committed some type of financial deception – from hiding purchases to lying about the amount of debt they owed with as many as 58% admitting that they hid cash from their partners. Marriage and relationships are hard enough and few survive affairs so why do we expose them to the additional stresses of financial infidelity? “Financial affairs” are not new and they are not limited to men only – many women are just as guilty of financial infidelity! How often do we make financial decisions without our partner’s input or fail to disclose the full extent of our purchases to partners?
Just like a physical affair, financial infidelity seldom happens abruptly. It sneaks into a relationship through those little lies and seemingly harmless secrets that we keep about money. “Just like sexual infidelity starts with an innocent business lunch or a little flirtation over coffee, financial infidelity begins with that first secret, that first half truth, that first hidden purchase…It starts when a guy gets a private credit card. He convinces himself he’ll only charge R1000 a month. But then the R1000 turns into R5000 and the R5000 into R20000, and the spiral just keeps swirling down. It starts when a woman tells her partner she spent R500 at the mall instead of the R1500 she really dropped because she doesn’t want him to get mad at her. It starts when he hides the real depth of the debt he’s bringing into the relationship or when she refuses to participate in managing their family finances.”
“It is two people maintaining separate accounts because they don’t trust each other enough to pool their resources. It is the desire to control another person’s life by limiting his access to money. It is what happens any time a person lies, cheats, or deceives his partner about money. It is a betrayal of the trust that two people put in each other when they commit to a relationship. Overspending, separation, lack of planning, control, and secrets—these forms of financial betrayal can be just as damaging to that trust as sexual betrayal…The first betrayal leads to the next and to the next, and before long, the relationship is dying.”**
Money touches every part of our lives and once trust has been eroded by deceit and secrets, the relationship will be little more than 2 people living under the same roof – living 2 separate lives. Seemingly benign behaviours such as telling white lies and keeping little secrets or attempting to control one another by using money as the weapon can easily turn a happy relationship toxic. And in our experience, we have yet to come across a situation where people are financially better off after a divorce. So how can we stop financial infidelity before it gets started?
Here are a few questions to consider (and which might give you an indication of the degree of financial infidelity already in your relationship):
- How often do you and your partner discuss money?
- How often do you fight about money?
- Do you lie about the amount you spent on an item?
- Do you buy things in secret?
- Do you have a secret stash of cash or a credit card your partner does not know about?
- Do you buy gifts for others without telling your partner?
- Did you grow up in a home where your parents fought about money?
- Have you drawn up a budget? Do you (both) stick to it?
- How much debt do you (both) have?
- Would you consider ending the relationship because of money issues?
If you answered yes to more than a few of the above then there is a really good chance that you are committing financial infidelity. A successful partnership or relationship is built on trust – without that, you are most likely to end up another statistic. Clearly, learning to talk about money with your partner is critical. This may be really difficult at first, especially if you have never done it before, but here is an anagram of the word “trust” that might make things a bit easier.
- T – talk about it…just start! Possibly agree that you will have a weekly/monthly meeting where you talk about the finances. It will be difficult at first and maybe you need some external help.
- R – respect one another. You are 50/50 partners in this relationship and until you see each other like that you are going struggle. Even if you are the sole earner, there are things that your partner is doing that add significant value and that allow you to live the way you do. No more resentment!
- U – unkind. There is never a reason to be unkind to one another. Talk openly but don’t be unkind. You are in this together and you need to understand there is a problem and probably no quick fix.
- S – start over. From this point on, no more secrets and lies. You are going to have to agree on a plan (and budget) and are going to have to work hard at this.
- T – truthful at all times. And talk about it…
When we advise clients about budgeting (especially for those who need it and have never done it before) they are usually amazed how simple the exercise is and yet how difficult it can be. It can often take many months of really hard work to get it right. If you have been unfaithful financially, and are concerned that it will cause a breakdown in your relationship, then, take heart; with commitment, honesty and hard work, you can rebuild the trust!
** from “First comes love then comes Money” by Bethany and Scott Palmer