Financial Transparency is Key to Any Relationship, Financial Infidelity Being the Ultimate Killer

Previously Published on News Break

Whether running a tight ship or planning for a post-pandemic wedding of the century, couples are, for the most part, always coming up with new ways to manage their money. Despite an imminent fear of catching the coronavirus, a record number of professionals have become hyper-focused on advancing their careers — some on the brink of unemployment while others are possibly even losing their businesses due to shutdown and quarantine.

“How did the pandemic change the way couples ‘do money’ together?”

This was something Policygenius really wanted to know.

The nation’s leading online insurance marketplace conducted a survey by polling more than 1,500 adults across the United States. They examined the ongoing relationship between couples and how they managed their money both before and after the pandemic.

Overall, these figures have not changed and remain consistent with previous versions of the Policygenius Couples & Money survey, published in both 2018 and 2019.

Surprisingly, only one in three people surveyed (34%) claimed that the pandemic had changed the way that they’ve been managing their wallets. Only 16% of those individuals admitted that they have had to “tighten their belts,” some earning a lower income than they would have otherwise.

With the mission of “helping people on their financial journeys, no matter where they are in life,” Policygenius took a deeper look at the mechanics of finance in relationships and just how little these benchmarks have been altered in the past year.

Couples are experiencing a rise in financial infidelity.

Although 40% of couples say they manage their money as a team, one in five individuals (22%) will actually manage their own finances even while in a relationship.

Many of those couples were facing financial infidelity — and, they didn’t even know it!

Narcissism and hypocrisy can run deep when it comes to finance in a relationship. 64% of those reporting “financial infidelity” say that “lying about and/or hiding money is a relationship deal-breaker.” But, according to the research, many of those same individuals are hiding money secrets of their own.

Often, we don’t find out that our partner has been committing financial infidelity until faced with divorce, sudden death, or an emergency-type situation. When we find out, we feel betrayed, manipulated, and taken advantage of.

Even more so, we might find ourselves enduring years of financial abuse or living in poverty-like situations, only to find out our quality of life would have been so much better had our partner not lied to us. We end up bitter, resentful and start questioning everything we’ve ever been told.

The term “financial infidelity,” however, doesn’t necessarily constitute a stereotype, especially when it comes to finance within a relationship. In your mind, you may associate this term with gambling away the family’s home — or paying for prostitutes using a shell corporation. But, the reality is, financial infidelity may be something as little as lying about past debts or opening hidden bank accounts, withholding assets, and making secret purchases.

“When you say cheating, people often assume one thing,” acknowledges Nathan Astle, Board Member at the Financial Therapy Association. “But it could also mean emotional cheating, or even just lying about something you bought. If you don’t know what’s OK and what’s not, it can easily slide into deception and hurt.”

Most of the time, it’s not even personal.

“There are many reasons financial infidelity occurs. Maybe someone has unresolved financial trauma or a conflicted relationship with money,” states Ed Coambs, Financial Therapist in North Carolina. “Some people hide their purchases or debt from their partners due to shame or insecurity.”

“The emotional impact of not talking about money, however, can be significant. People may become more dishonest about their spending habits or even hide money from their partner,” said Coambs.

Elle Martinez adds to the conversation. She’s the Founder of Couple Money, a personal finance blog and podcast, aimed at finance in relationships.

“There’s no black or white reason why people lie or hide money,” she states. “People think they aren’t harming anyone when they aren’t disclosing that purchase or ‘fun money’ account. They think it’s easier to not mention anything to their partner and avoid a fight, but these small things add up.”

“The problem is,” according to Astle, “avoidance doesn’t work in the long term. It actually actively prevents couples from reaching financial security or safety in their relationship. If you have financial stress, that can be a catalyst for money arguments or divorce. Money can be difficult to discuss because it’s personal and often considered a conversation taboo. Many couples avoid the topic altogether. ”

Transparency is key, even if there’s a bit of resistance going into the conversation.

Tensions could arise, and no one wants this to mark the beginning of the end for their long-running relationship. Transparency is key, even if there’s a bit of resistance going into the conversation. Allow your partner to talk. Be open to the fact that there’s an underlying reason they haven’t brought this topic up to you before. Listen to what he or she is saying. Don’t be so quick to judge. You will get through this together.

According to Ed Coambs, “It’s inevitable that you’re going to have differences of opinion. That’s as true as gravity. But can you work through those differences? Financial stress strains your relationship security and safety, and it can be hard to have those productive conversations especially when you’re already stressed.”

While initiating the conversation surrounding money can be a difficult task, gaining your partner’s trust by being financially responsible is another. Leading key conversations will make this much easier. How you go about it will make all the difference. But, if you don’t go about it — this difference may not matter too much at all! Your relationship might not even last if financial volatility leads to other things outside of your control.

Coambs also states that “There’s no one right way for couples to handle their finances together. You don’t necessarily need to go to the bank tomorrow and merge all of your accounts. But it helps to talk openly about the status of your financials — good or bad — and set goals for the future,” he continues. “Having an understanding of where your money stands and putting a solid plan in place can help you and your partner weather any financial storm, like a pandemic.”

Are married couples better off?

Policygenius asks us what financial information we know about our partners.

According to Policygenius, “A majority of married people (69%) say money doesn’t affect their relationship, compared to 56% of unmarried people. Tying the knot (and staying in the know financially) seems to strengthen relationships.”

They also agree with Astle when he says that “Married couples may be better at doing money together than their non-married counterparts,” simply because they’re likely to have more “skin in the game.”

For the most part, their debts will be combined. Then, take into consideration the topics of having children, buying a home, or sharing any other assets, over time. Individual activities will, indeed, affect one another. Which activities will prevent the couple from those things that mean the most to them? What are their goals over time? What’s preventing them from getting there? Could this “thing” be detrimental to their happiness — and is it worth risking everything just to keep a secret?

Financial transparency, planning, and collaboration are crucial for this reason. Married or not, your ability to thrive, succeed and save for a rainy day all teeters along this line. Your future endeavors, desires for a family, and quality of life depend on how open you can be when ready to combine.

Other stats found through the polling of participants:

• Nearly one in five people in a relationship (17%) never discuss money with their partner.
• Many people don’t know financial information about their partners, including salaries (41%), debts (41%), or monthly spending habits (53%).
• Respondents also didn’t know about their partners’ investments (48%), retirement savings (49%), or credit scores (54%). Of all respondents, 20% said they knew none of these six financial facts about their partners.
• Almost 30% of people say they have paid off their partner’s debt. Of those, 44% paid off more than $10,000 of their partner’s debt.
• One in ten people say they have a secret savings account, and 16% of people say they consider their partner to be financially irresponsible.

Stay tuned and learn how couples can handle their money together. Follow below to be notified of the updated story!