We’ll call her Mary. She wrote the letter with tears in her eyes, convinced that when her husband finally read it, he would leave her. She struggled to explain to him how she had done it again – racked up tens of thousands of dollars in credit card debt behind his back.
“I was taking money from the home-equity account to pay the credit card bills,” says Mary, who had brought mammoth credit card bills into their marriage several years earlier.
They’d worked hard to pay those off. But after giving birth to their first child, Mary fell into postpartum depression; even after she went back to work, she found she felt better only when she shopped. “I thought I deserved things because I was making money,” says Mary, who asked that her real name not be used.
Financial infidelity – when one spouse overspends family money without the other’s knowledge – is by far the most deadly marital money conflict.
“I see more cases of divorce caused by financial infidelity than I do from sexual infidelity,” says Jennifer Brandt, a partner and family law specialist at the Cozen O’Connor law firm in Philadelphia.
Spouses are trained to look for the proverbial “lipstick on the collar,” but it doesn’t occur to most people to check periodically to make sure their spouse hasn’t cashed out the 401(k) to play the ponies.
Maybe it should.
A recent study by GMAC, the finance company, found that in one-third of the 2,800 households surveyed, spouses admit hiding at least one purchase from their partner. The most common secrets? Clothes, hobby-related items and gambling.
No matter what they’re buying, many who commit financial infidelity have some sort of addiction. For Mary, it was the short-lived high she got from buying new things. For others, it’s substance abuse. And secretive gambling, especially Internet gambling, is rapidly becoming a leading cause of financial disaster for some families, say experts.
Doug Thorburn, a certified financial planner and author of “Drunks, Drugs & Debits: How to Recognize Addicts and Avoid Financial Abuse,” says that he stumbled upon the connection between financial infidelity and addiction while counseling clients who had suddenly found themselves in trouble.
“When I started observing instances of financial abuse by some of my clients’ spouses,” says Thorburn, "I’d say, ‘addict.’ And my client would say ‘Oh no, he’s too smart to be an addict.’ I’d say, ‘Being smart has nothing to do with it.’ "
Those clients would leave Thorburn’s office unhappy, sometimes not returning for months, but inevitably they’d call back and tell Thorburn that he was right after all.
“Addicts in recovery admit that they’re the world’s greatest liars,” says Thorburn. “Addicts are brilliant at manipulating and stealing. They could sell ice to Eskimos.”
But even when addiction isn’t involved, it’s profoundly troubling to find out your spouse is spending family funds like a drunken sailor.
“It gives you a look into someone’s character,” says Frank Congemi, a financial planner in Queens, N.Y. “It’s like if you’re lying to me about this, what else are you lying about?”
Some marriages never recover from that breach of trust, says Brandt, the lawyer. That’s when they come to see her. “I get people at the end of the marriage when it’s too late,” says Brandt. “You have to start talking about these things before you even get into a marriage.”
Brandt and others advise that the best way for couples to avoid this problem is for both partners to get actively involved in the finances. You don’t both have to pay bills, but both partners must be aware of how much money they have and where it’s going.
Couples should also have an agreement about how much they can spend using joint funds before they need to clear it with the spouse. Online banking makes it simple to periodically check for unusual withdrawals or changes in financial position. Don’t leave financial management all up to one person, especially if that person has had spending problems in the past
Mary had demonstrated ineptitude with money in the past. Her husband, who Mary says wasn’t all that interested in the finances, left bill paying up to her as a way to teach her financial responsibility. That obviously backfired. The good news was that when her husband finally read her mea culpa, he didn’t divorce her. Instead, she says, he took some of the blame for being so removed.
Luckily, these two had some inheritance money which they used to pay off the debt. Then he took over managing the finances, and she got back into therapy and took a hard look at why she felt the need to spend so hard.
"The marriage couldn’t have survived if I hadn’t asked myself, ‘Why am I doing this?’ " Mary says now.
“At the time you’re doing it, it fulfills a need. But in the end, the individual has to deal with it themselves as well as deal with it with their partner,” she says. "It can ruin your life in a way that an affair can’t, because it’s your future you’re spending
Financial infidelity: The marriage breaker - MSN Money
All these topics about infidelity … what about financial infidelity?