Money fights are one of the biggest reasons for marital disputes and left unchecked, often leads to divorce. But many couples have wondered is it wrong to hide money from your spouse.
It is wrong to hide money from your spouse. Since all assets and debts obtained during the marriage belong to both spouses, the hiding spouse could be violating the law. More importantly, though, financial infidelity destroys trust and can irreparably damage the relationship and can lead to divorce.
But there’s a lot more to know about money and marriage!
So in this article, we’re diving deep into the world of couple’s finances. We’ll examine the best ways to avoid money fights. But we’ll also look at what they call financial infidelity and explore exactly why that’s a terrible thing to do to your spouse.
Ultimately, we’re answering the question of is it wrong to hide money from your spouse?
Let’s dive in.
What exactly is financial infidelity?
Keeping cash from your spouse is an unwritten rule for dishonesty in a marriage. And can lead to more arguments in the future.
Money is a sensitive subject, even for individuals in a marital relationship. When both individuals vowed during their matrimony to share everything from richer or poorer, so keeping a secret is a no-brainer breach of trust to the spouse.
Hiding money from your partner is what Dave Ramsey calls “financial infidelity.”
Dave, of course, is the world’s #1 money expert at least in the areas of paying off and getting out of debt and getting on a budget.
According to CreditCards.com, 19% of Americans admit having hidden money from their husbands or wives. Some spouses believe there is nothing wrong with this act since its a common practice.
But they go on to say their survey results pointed out that “only 2 percent of the adults in relationships we surveyed would break up with their significant others if they discovered their lovers had $5,000 in secret credit card debt.”
But whether or not that survey is accurate, there’s no denying the incredible damage financial infidelity does to a marriage.
Just like sexual infidelity, hiding money or accounts from your spouse can:
- Destroy trust
- Escalate tensions
- Cause an increase in arguments
- Lead to both of you making bad financial decisions behind the other’s back
Luckily, there is something called financial marriage counseling. It is great both for new couples who are committed to a future together. But it’s also great for couples who have had issues with financial infidelity.
Check out all the details in a recent article where I break it all down.
I get into 7 specific benefits from financial marriage counseling including how much more likely couples are to fight and divorce if they don’t get this kind of help.
Just click the link to read it on my site.
Why would a spouse hide money?
ForbesWoman and NEFE or the National Endowment for Financial Education conducted an online poll among US adults.
According to this survey, 58% of those who engaged in financial infidelity hid cash and the rest on minor purchases. Small lies become a habit that increases over time.
Further to this, the survey revealed the following results:
- 30% hid a bill such as a mobile phone or credit card bills
- 16% lied about larger purchases such as car or houses
- 15% has a private bank account perhaps a swiss account
- 11% falsified their debts to cover up huge liabilities
- 11% lied about their actual income or money earned
Several spouses hid money for specific reasons.
One reason common was piling away a nest egg as protection from a spouse who’s spending was out of control. While others simply were seeking revenge over a spouse who had cheated or committed some other offense.
And others lie to cover up their wrongdoing such as gambling, addiction, or extramarital affairs.
Lastly, some see this as an exit strategy to a relationship where they stash money secretly so when the relationship ends they have something to start their new life with.
The percentage of “infidelity” in finances has increased through the years, which has resulted in lots of doubts and mistrust.
So it’s no surprise we’re also increasing the divorce rates.
But financial infidelity is just 1 of the 11 deadliest things one spouse can do to another. In a recent article, I break down all 11 of the absolute worst things to avoid in your marriage.
But the worst of those 11 lead to divorce more than 90% of the time. Just click the link to read it on my site.
— Experian #StaySafe (@Experian) February 20, 2019
How do I know if my husband is hiding money?
The trend of financial infidelity is increasing. So women should be vigilant in spotting red signals that indicate that their husbands are hiding money from them.
Some signs that you should watch out for:
1. Your husband does not reveal his expenses
They do not disclose where their money went. When asked, they provide you with vague responses to its whereabouts.
2. When your husband gets uptight talking about money
They could either reason out that they are tired or turn it around, questioning you about your lack of trust in them about their finances. Avoiding money conversation is a warning that they are hiding something from you.
3. Your husband pays all the bills and doesn’t talk to you about it
A household budget should be something couples talk about together. It’s OK if one does the actual bill paying. But there should be no secrets or surprises.
4. You regularly go over budget
You noticed that you are always on a negative when you have not made any large purchases over the last few months. Unknown investments that are not accounted for, resulting in higher monthly expenditures.
5. When money becomes a common reason for fights
You know that there is something wrong when petty things like buying a small item can lead to arguments. An even bigger red flag is where he shifts the blame to you for small and insignificant purchases, as it could be a sign he’s hiding something.
6. You find accounts listed under his names
If you come across a bill or statement for an account you don’t recognize, that’s a red flag.
Many spouses operate under the false assumption that a loan or asset solely under their name can’t be touched by their spouse. The truth is in most states, anything acquired during the marriage belongs to both people; assets and debt.
However, if there was a written agreement (prenup) before marriage that says otherwise, then this does not apply.
7. You have not seen your husband’s annual tax return
Couples are almost always better off filing joint income tax returns. But even if you file separately, as the wife, you should be able to review his returns at any time. If he’s hiding them, that’s a red flag.
8. Instead of using credit or debit cards, they use cash for most of their purchases
Cash flows are hard to track compared to credit card usage.
Not unless your husband does not own one, which is rare, they might be keeping something from you. Now, of course, many of you who follow Dave Ramsey may very well pay for things in cash (as my wife and I do). But if this is NEW behavior, that’s a red flag.
9. You have zero clues on what he does for a living
A marriage has to be 50-50. Both of you have to be all in and be transparent with one another. If your spouse is vague about what they do for a living or how much they make, that’s a red flag for sure.
All couples have a “fiduciary duty” to be transparent on the family’s cash flow.
Even if your spouse is the sole breadwinner, you are still entitled to half of the money they earned. So technically, they are obliged to disclose how much and where their earnings are.
— Kyle Burbank—Money@30 (@Moneyat30) September 2, 2019
Is it illegal to hide money from your spouse?
A “fiduciary duty” is an obligation to declare and provide access to their financial statements to each partner.
Whether you are the breadwinner for the non-working spouse, both parties are entitled to know the ins and outs of your money earned during the marriage.
More than the money, it’s the act of dishonesty that puts a threat in a marriage.
Financial infidelity can be just the tip of an iceberg of a more profound and underlying issue. Withholding information from your spouse is tantamount to cheating or lying breaking the trust you have for each other.
Although both parties are obligated, there are no legal penalties associated with non-disclosure. However, in divorce, concealing disinformation can result in penalties or even monetary sanctions.
Depending on the verdict of the judge, you can either be penalized to pay a monetary sanction or give up your entire share of the asset. Worst case scenario, in some states, you can even be put to jail for hiding your assets.
No one said marriage was easy.
It’s also true that ALL of us make mistakes and screw up and deserve a chance to fix whatever wrongs we have done.
In a recent article, I break down exactly WHY marriage is worth all the hard work. I show proven statistics of how you will physically and mentally benefit from working through challenges and creating a strong marriage.
Just click the link to read that on my site.
Financial infidelity is defined as a breach of trust that occurs when couples lie to each other about money. When combined finances are involved, this can be a huge problem.
Join us this Thursday Aug. 8th from 9-10am PT for one of our most important Table Talks yet. pic.twitter.com/5mmvEUBGkN
— Finlit Dating (@FinLit_Dating) August 5, 2019
Does my spouse’s debt affect me?
One question that you would probably ask is if assets are shared, is if the same rule applies for liabilities? The answer is on a case to case basis depending on the state.
The credit score of your spouse can affect you such that you can’t file for a mortgage or loan. In states where both spouses share 100%, financial accountability cheating on finances can have a considerable bearing.
The state where you live dictates your liability on your partner’s debts.
Most states require both spouses to own each other’s debts during marriage, where community property rules apply. Thus, if the debt was acquired before marriage, it does not automatically change to joint liability.
But during the marriage, both spouses are liable. Compared to the common law property rules where debts incurred by one spouse are solely their responsibility if it was not used for the benefit of the family, such as shelter, food, and education.
These rules apply except when both parties agreed otherwise.
The spouse exemption should be clearly stated in the pre- or post-nuptial agreement. On top of this, the spouse can also agree with the lender or supplier. The deal exempts their partner for any liability concerning their debts.
How Does Bankruptcy Work in Marriage?
Under the community property rule, if one partner filed for bankruptcy, it will wipe off the debts of both spouses.
But always remember, bankruptcy is devasting to your finances. It should be seen as a last resort to avoid foreclosure and not for much else.
It’s also incredibly rewarding spiritually to dig yourself out of a mess you (and your spouse) created rather than hoping bankruptcy will magically make it all go away.
Plus there are some debts that even bankruptcy doesn’t get rid of such as student loans.
For unmarried couples, a cohabitation agreement provides legal protection as it details each partner’s entitlements and how assets will be divided, such as a share of a house or joint bank accounts if they split. ??https://t.co/wXeelIS2dM pic.twitter.com/vPOg1LmFlF
— Fullers Family Law (@FullersLaw) July 17, 2020
Should spouses share bank accounts?
Married couples, whether they like it or not, are obligated to share everything with their spouses, money included.
So, experts recommend couples to engage in a conversation or agreement early on the relationship before settling down together. This is an essential piece for each individual to be aware of their boundaries, avoiding any deceptions later on in the marriage.
In maintaining a family, both partners have financial obligations to their children that are meant to be split equally. So, having a joint account is ideal for that purpose.
After all, you didn’t say “I do . . . sometimes”.
That being said, each spouse should have some pocket money in the household budget that they use for whatever they want to. In those cases, unless the spouse is engaging in dangerous or illegal behavior with the money, the spouses don’t get to have an opinion on what the money gets spent on.
Trust and communication are crucial in any relationship.
I go into much greater detail into both how and why couples should share bank accounts in a recent article. I show statistics that prove it’s a bad idea, but I also show newlyweds exactly HOW to go about doing it after tieing the knot.
Just click the link to read it on my site.
In this article, we took an in-depth look at the world of marriage and money.
We examined why money fights lead to divorce, and why those things are increasing. But we also looked at some of the best things you can do in your relationship to prevent things from going south.
Ultimately, we answered the question of “is it wrong to hide money from your spouse” with a resounding YES!
Have you ever hidden money from your spouse? If so, why?
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