Are You Guilty of Financial Infidelity?
Earlier last month, the Financial Planning Standards Council (FPSC) released the results of their “Financial Infidelity Survey”. The survey found that more than one third of Canadians are victims of financial infidelity.
What exactly is financial infidelity you ask? Infidelity is defined as the “action or state of being unfaithful to a spouse or partner”. Talking about money with your spouse or significant other is rarely every easy and many individuals starting a new relationship don’t discuss money matters at all. But is simply not discussing money considered financial infidelity?
It could be, but the study showed that it wasn’t just a lack of conversation, but instead actual dishonesty that was often occurring. 34% of study participants admitted to keeping financial secrets from their current partner and 36% said that they outright lied about a financial matter. Both men and women were found to be equally deceitful about financial matters with their partners. Younger people are particularly susceptible, and the study found that nearly 50% of Canadians aged 18-34 have been the victims of financial infidelity.
There are several “red flags” to watch out for when financial infidelity by your partner is suspected including:
1. Regular or large cash withdrawals
2. A change in behavior or questioning towards your own financial habits which could signal an attempt to deflect attention away from themselves.
3. Unaccounted for purchases and expenditures that cannot be explained.
4. A change in mail, reduced mail or statements from financial services & creditors or a partner that becomes very concerned with the mail delivery and doesn’t want you to see it first.
So, what can you learn from all of this? Talking about money is never going to be easy but it’s a vital component of a happy relationship. As early as possible in a relationship, you should try to ensure that you and your spouse are on the same page. Frank discussions on debt, credit, values about money, etc should take place on a regular basis. Be sure to ask open-ended questions like “How much debt are you comfortable carrying?” and “What are your financial goals in the next 5 years?” can help open the conversation.
In addition, create and maintain a detailed budget that both partners are actively involved in. Set up a time each month to sit down and review ALL bank accounts, credit card statements and investment accounts. Be very careful of signing any type of financial document before fully reading and understanding it as well.
Most importantly, get up the courage to talk about money. I promise you that the first conversation will be the hardest one and it will get much easier from there. Partners that openly communicate about money and voice and understand each other’s financial values are in a much better position to build and maintain a strong and healthy relationship.