Financial Infidelity is when both partners in a relationship keep secrets from each other concerning money. Financial Infidelity can be avoided in a relationship only if both partners are honest and keep track of money together. Budgeting, financial goal setting, and discussing purchases are ways to avoid cheating on your partner.
What are some red flags of financial infidelity?
- Finding a credit card statement you know nothing about or you are removed from a joint credit card.
- Cash is missing from your joint savings or checking account.
- You notice new purchases in areas of the house hidden out of view, and your partner hasn’t told you about them.
- Your partner is suddenly concerned about paying for your joint financial obligations.
- Your partner talks about money and possessions that exceed what is jointly owned by you as a couple. This tactic is to make the other partner think they have more than they do.
Overspending, making decisions without the other partner regarding purchases, and lying or hiding spending can cause relationship problems. If it continues, it can lead to financial abuse.
Financial abuse is part of financial infidelity when one partner limits access of money from the other partner. One partner controls secrets about spending and removing or adding the other partner to accounts. The abuser treats the other as if they are incapable of making financial decisions on their own. Often one partner gives the other an allowance for spending, similar to what one would do for a child.
The long-term effects of a relationship plagued with financial Infidelity, when the controlling spouse's divorce or death occurs, is that the other partner remains with 'no clue' of what has happened financially, whether good or bad.
Often the remaining partner is unable to make money decisions or understand the financial outcomes from their choices. In the worst situations, there may be large outstanding debts that must be satisfied.
Fortunately, knowledge is power.
What can you do to ensure you are not a victim of financial infidelity?
- Being personally involved in all aspects of your financial life is one way to have confidence.
- Make an effort to understand your investments by meeting with your financial professional. If you a couple, both of you have the right to make decisions.
- Understand that your partner is not in a position to control investments in your name or make directives to a financial professional on your behalf without proper legal documents. Financial professionals are not able to execute orders from anyone other than the investor themselves.
Financial professionals are responsible for protecting all investors, including those who may be living with financial Infidelity.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.
This information is not intended to be a substitute for individualized legal advice. Please consult your legal advisor regarding your specific situation.
All information is believed to be from reliable sources; however LPL Financial makes no representation as to its completeness or accuracy.
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