What is financial infidelity?

Financial infidelity refers to a variety of behaviors including:

  • hiding financial information,
  • lying about money matters, or
  • making significant monetary decisions without the knowledge or consent of one's partner

while in a committed relationship. It can be emotionally equivalent to sexual infidelity, depending upon a person's relationship with money.

It is a breach of trust in a relationship's financial aspect. It can have serious consequences for the couple's overall confidence and stability. Ignoring repeated financial infidelity is a grave concern that should not be overlooked. In some cases, it might be criminal behavior.

Signs of financial infidelity

Dick was anxious to marry Penny when they met. He was flattering, romantic, and "head over heels in love" with her, he told her repeatedly.

He was also "almost divorced."

During his divorce proceedings, Penny learned that Dick hadn't filed his taxes over the four previous years. He needed a "loan" from Penny before his divorce hearing. Penny agreed.

This was the first in a series of red flags about Dick's financial infidelity. Dick could not talk about money openly and preferred to function on a "need-to-know" basis.

She discovered that his ex-wife had not paid the loan for their house. This made him angry because he later had to pay the taxes for the defaulted loan. His employer had cheated him on his well-earned income. He had additional money problems that, he reassured her, were "not his fault."

Money problems are relationship problems

Many businesses, including employers, auto insurance providers, cell phone companies, and cable companies, use credit checks when making decisions. So should you.

If Penny had insisted, she would have learned that Dick was in no financial position to marry. She would also realize that an extensive comparative study showed that her upcoming marriage would have a dramatically lower survival rate.

This is, of course, if she had examined the state of Dick's credit score before agreeing to an engagement.

Here are five relationships money problems:

1. Secret spending

Covert spending occurs when one partner makes purchases or incurs debts without informing the other partner. It could involve secret credit cards, secret bank accounts, or significant unilateral financial decisions.

Dick did "sock money away" from time to time, which he freely admitted to in therapy. It was, as he described it, however, only an expression of his "independence." "After all," he shared "I'm a grown man. I have a right to keep a few secrets." In fact, he resented Penny's desire to know anything about it. This pattern of secret-keeping turned out to be a much larger problem.

2. Lying about income or debts

Financial infidelity may involve dishonesty about income, expenses, or debts. For example, a partner may understate their income or fail to disclose significant debts, loans, or financial obligations. Alternatively, they might have hidden assets they are reluctant to disclose.

Dick also hid purchases. Once discovered, he agreed to curb his spending but did not.

3. Financial secrecy

Hiding money problems from a partner by not showing them bank statements or bills can be tempting. But "tempting" doesn't make it right.

Financial secrecy can also include hiding or deleting business transactions from shared accounts or manipulating accounting records.

4. Financial betrayal

Financial betrayal can involve risky investments, gambling, or actions that harm the couple's financial stability. This happens without the partner's knowledge or consent.

Dick believed it was wise to invest the couple's money in various ventures. These included a hot stock tip, original art, and other endeavors that he was confident would yield success. He insisted it was fine because he always told Penny about it...after it happened.

One thing he could never invest in, however, was the couple's long-term savings or budgeting plan.

5. Unequal financial contributions

This involves deliberately avoiding financial responsibilities or refusing to contribute fairly to shared expenses, despite having the means to do so. This can create an imbalance in the relationship, leading to resentment and distrust.

Financial infidelity in marriage

Financial infidelity can have significant negative impacts on a relationship, including:

  1. Erosion of trust: Financial dishonesty erodes trust between partners like any infidelity. It can lead to feelings of betrayal, resentment, and a breakdown in communication and intimacy.
  2. Financial consequences: Financial infidelity can have severe financial repercussions for both partners. It can result in accumulating debt, economic instability, missed opportunities, or even legal consequences if it involves fraudulent activities.
  3. Relationship strain: Financial conflicts and deception can strain the overall relationship. It may lead to arguments, constant disagreements about money, and a lack of shared financial goals and plans.
  4. Emotional and psychological impact: The partner who discovers financial infidelity may experience various emotions, including anger, hurt, insecurity, and betrayal. It can lead to emotional distress and a damaged sense of self-worth.

Dealing with financial infidelity requires open and honest communication, seeking professional help if needed, and a commitment to rebuilding trust. Couples should work together to establish transparent economic practices, set clear boundaries, and develop shared economic goals. Getting help from a financial advisor or couples therapist can fix problems and restore trust in a relationship.

Is financial infidelity a crime?

Financial infidelity, in and of itself, is not a crime. It is, however, financial abuse. It is primarily a breach of trust within a relationship rather than a legal offense.

However, certain actions associated with financial infidelity may cross into illegal territory, depending on the specific circumstances and jurisdiction. 

Some examples include:

  1. Fraud: Forging signatures, falsifying financial documents, or misrepresenting financial information, can be considered illegal and may lead to criminal charges.
  2. Identity theft: Using someone else's personal information, such as their credit card or banking details, without their consent with the intent to defraud or deceive is a criminal offense.
  3. Embezzlement: Appropriating funds or assets entrusted to one's care, such as misusing shared funds or diverting money for personal use without authorization, can be considered embezzlement, which is a crime.

Can you sue your spouse or ex- for financial infidelity?

I am not a legal expert, but here is something to consider. Whether or not you can sue your spouse for financial infidelity depends on various factors, including 1) where you live and 2) the specific circumstances surrounding the situation. Legal action may be possible in some cases while not feasible or advisable in others. 

Take the following case:

Joe Exotic created Big Cat Rescue Entertainment (BCR Entertainment). It was a "copycat" business designed to sound like Carole Baskin's company Big Cat Rescue. She sued him and he lost to the tune of $953,000.

Joe thought he could steal her trademarked business. He lost big time.

It's a must to note that financial misconduct and fraud laws vary across jurisdictions. For example, Ms. Baskin had copyrighted her business name. This put her on a sound legal footing.

Suppose you suspect illegal activities or financial fraud in a relationship. What should you do?

In that case, consulting with legal professionals or law enforcement authorities is advisable to assess the situation and determine potential legal implications.

Still married? 

Consult with a qualified attorney specializing in family law or divorce law to understand your legal options. This is based on your situation.

Some potential legal avenues to explore in cases of financial infidelity with married couples include:

  1. Divorce proceedings: If financial infidelity has significantly impacted the marriage and there are concerns about asset division, spousal support, or child support, it may be addressed during divorce proceedings. A family law attorney can guide how to handle the financial implications of infidelity within the context of divorce.
  2. Breach of fiduciary duty: In some jurisdictions, spouses have a fiduciary duty towards each other, which means they are legally obligated to act in the best financial interests of the marriage. Suppose one spouse has violated this duty through financial infidelity. In that case, it may be possible to pursue legal action based on a breach of fiduciary duty.
  3. Fraud or misrepresentation: If financial infidelity involves fraudulent activities or misrepresentation, it may be possible to explore legal action related to fraud. This could include identity theft, forgery, or other forms of fraudulent financial behavior.

Money is about how power gets distributed. 

Dick felt that there was a clear imbalance of power in their relationship as Penny was better educated and made more money than he did. He felt as if his financial betrayals were his right in order to "even the score." He refused his wife's attempts to work on a  budget together, or discuss purchases before he made them, because this, he believed, would give her more control over him and his autonomy.

Dick saw these money issues as his way to "even the score." He didn't view his marriage as a partnership, but rather a "win-lose"proposition. He also didn't understand that his behavior was also a matter of character and integrity. In fact, according to the Gottman Institute money matters aren't even about money.

Recovering from financial infidelity

You'll have to prevent financial infidelity by first protecting yourself. People don't typically betray their spouse unless they 1) can't help themselves or 2) are character disordered. The way you respond will depend greatly upon which one it is. 

Can you save your marriage after financial infidelity? The answer will depend upon whether you are able to stop your spouse from continuing to commit financial betrayal. Consider the following:

  • Does your partner acknowledge the problem and address it openly and honestly?
  • Can you talk openly, and do you feel heard about this betrayal?
  • Are they committed to full financial transparency?
  • Do they give more than lip service to creating and sticking to, and regularly reviewing a joint budget? No matter how many financial resources you have, a budget is not about dollars; it is about values. Creating and maintaining one, like YNAB, can go a long way to sharing those values.
  • Can you set goals, and spending limits and work together to create a shared vision, boundaries, and financial accountability? If not, reconsider joint accounts.

You may need professional help and guidance to provide objective advice and facilitate constructive conversations. And remember that rebuilding trust takes time. However, it can only be done when there is accountability, follow-through on commitments, and responsible financial behavior. That's what makes repeated financial betrayals so destructive. 

Consider taking a financial workshop or seminar, visiting a financial planner, or taking an online course together. Sharing knowledge will strengthen your partnership and create a mutual language.

Finally, practice empathy and forgiveness. Financial infidelity can stem from fear, shame, lack of financial skills, control, a desire for revenge, or more negative motives. Cultivate empathy and compassion for each other's struggles. Practice forgiveness and work towards rebuilding your relationship based on trust and understanding.

Resolving financial infidelity requires open and ongoing communication, trust-building, and shared responsibility. With dedication and a commitment to transparency, you can overcome this challenge and develop a healthier financial foundation in your relationship.

Ready for a change in your relationship?

It starts with a no-obligation 15 minute phone call with our client services team.

Dr. Kathy McMahon


Dr. Kathy McMahon (Dr. K) is a clinical psychologist and sex therapist. She is also the founder and president of Couples Therapy Inc. Dr. K feels passionate about couples therapy and sex therapy and holds a deep respect towards those who invest in making their relationship better. She is currently conducting online and in person private couples retreats.

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