This month I continue to write about different areas of relationships – both positive and the negative.
At one time, infidelity was relegated to sexual indiscretions outside of the marriage. Not so much anymore. Financial infidelity is becoming much more common and equally destructive relationships.
I have worked with numerous couples where one partner is hiding both their financial past and present. They minimize their debt, hide purchases and receipts, and justify their behaviors. Having a dysfunctional relationship with money can blossom into secrecy and eventually financial infidelity resulting in financial hardship. It is common for the other partner to feel betrayed and that they are living with a person who is a fraud, a liar. If their partner is lying about money what else is could he or she be hiding? At the core, financial infidelity undermines trust, which can ultimately destroy a relationship.
For example, someone who spends for “on sale” purchases because he or she is fooled by the illusion that they can “just stop.” This is a common fallacy. One cannot simply say to stop spending or take a person’s credit cards. An examination of the problem infers that one must look at the root of the problem and determine how systemic this is rather than just try to cut off the behavior.
In order to help a person fix the problem, an understanding needs to occur for both the person and the clinician, of the person’s relationship with money. Importance is placed on a person’s willingness to start this process, examine their behaviors, and ultimately make changes to create a healthier relationship with money. Inherent in this process, is working through their shame and embarrassment of their over spending indiscretions, though this can be difficult and challenging. Yet, this process remains vital in order to create a healthier relationship with money and financial fidelity with themselves and their partner.
Here are a few ways to get a handle on financial fidelity.
Start talking about money. Because people have different value systems, their relationship with money is different. It is not uncommon for one person to be a spender and the other a saver. This can create strain on the relationship. To start talking about money, I ask couples the following questions:
What is your relationship with money? Did you have money growing up? How has your history affected your current relationship with money? What are some of your fears about money?
To gain a deeper understanding, I follow up with: Do you make unilateral decisions or do you and your partner make them together? Is there a financial limit for making independent decisions?
Depending on their income and lifestyle, I often suggest that all financial decisions that exceed a set amount For example, anything over $100.00 or $150.00 needs to be made jointly.
Become more organized. When people are unclear about their relationship with money, they often purchase out of emotion. I am feeling “something,” so I need/want the purchase to feel good, to feel better. The impulsivity around purchases is common and on a deeper financial level than the periodic “retail therapy” jaunt, which many of us have experienced. I know I certainly have, but through the years, have become more intimately cognizant of my relationship with money.
I advise they ask themselves some key questions when making purchases, namely is this a want or a need? Why do I want this? Do I really need this? Why do I think I need to purchase this now? Taking stock of how we feel, at that moment, can often prevent unnecessary purchases.
Plan spending. The core questions I ask here include: do you have a budget? How do you determine this? What is your disposable income? Do you share expenses? How much money does it take to run your household? What are your extra expenses? How do you manage your money? How do you decide what you will spend money? How much disposable income do you have?
I remain surprised at the number of people who do not have a budget, preferring to “fly by the seat of their pants.” This is a cyclical spending habit as they work hard to meet their expenses and then wonder why they don’t have any money or they find they’re unable to account for expenses. A budget helps reduce overhead while offering a snapshot of income and expenses. Ideally, a budge discourages impulsive or emotional buying.
Put your debt on the table. I have worked with many couples, where one person has incurred substantial debt to the tune of over $80,000 of pure credit card debt, exclusive of car loans, student loan payments or similar expenditures. Yet, they continue to make purchases beyond their standard of living. Although they know they need to stop, they usually do not. They are constantly paying off one credit card with another, never really getting ahead. Often this secrecy is unfolded when one fateful day when they arrive home later than usual, and because they are unable to retrieve the mail in time, their spouse or partner does. It is at this time that the magnitude of their spending is exposed. As one would infer, an explosion occurs. This is usually when they start therapy. My recommendation is to come clean and take ownership over debt; however, for many reasons this is not always the path they choose though more often it becomes the path they take once they start therapy.
It’s my mission to help couples examine their relationship with money – both individually and together – and begin the process of full disclosure. This helps them begin to discuss and overcome their fears about money, so together, they can create a budget comparable to their means.
Ignoring the problem does not make it go away. As with many relationship challenges, communication is the first step to success.