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Be an open checkbook, avoid financial infidelity

March 10, 2011

It doesn't need to come to this

It can be as simple as taking hiding an extra $50 every month. Or it can be as complex as having a variety of secret accounts and a hidden second home. Financial infidelity, whether big or small, can destroy a marriage.

            Financial infidelity is when couples are not open with each other about finances. A recent study found that three out of 10 couples have experiences or are involved in financial infidelity.  This may be one of the reasons many cite money as the No. 1 cause of divorce.

            It may start out innocently enough. If one spouse gives the other spouse a bad time about purchases, he or she may start hiding purchases from the other. For men the top two expense secrets are on entertainment and electronics. Women named clothing and dining as their top two secret expenses.

            Even a small secret can be dangerous, as there may be more at play. For example, addictions can be a source of expense that can destroy a couple and their finances. We want to think the best of our spouses so it can be hard to admit there is a problem.

            An addiction is easier to hide when it is the person who controls the finances who has the problem. The individual can open up credit cards in his or her own name and the spouse’s name. Sometimes the individual may send these cards to a work address so it never appears at home. Since the other spouse does not pay the bills, he or she does not see the growing credit card debt, the borrowing from a 401(k) retirement account or the home equity line of credit.

Before the innocent spouse realizes it, the family’s finances are destroyed and the collectors move in. I believe this is a growing problem as the Internet can fuel addictions. Addictions such as gambling used to be a little more difficult to feed, as there were only a few places across the country that one could gamble. Today, with the Internet, one can gamble at any time on any computer.

So, what can you do? First, sit down with your spouse and talk about your values. Then, use those values to create financial goals for both of you. When you are assigned a budget, it never works. When you can create a budget with your partner that is helping you both reach your goals, it can be liberating, not confining.

Make sure you review your values and goals every few months to see if you are still on pace or not. If you have reasons to doubt your spouse, you may want to have both of you run a credit report check. With the website you are entitled to a free credit report from each of the three major credit bureaus once a year.

After your goals are in place, make sure you set a time at least once a month to review your finances. This gives both of you the chance to examine your monthly expenses and income. When both are involved, it is easier to work as a team — not two separate individuals — to achieve your goals.

There are some financial professions that recommend you and your spouse have separate checking accounts. Kerri and I thought about this before we married, but as we went through pre-marital counseling, our pastor advised us against it. I am glad she did. By having one joint account, we are together.

When there is something we want to spend money on, we make the decision together, and we both know where our money goes each month. We are not two individuals with separate goals; we are a couple working together to achieve our goals.

By working together, couples can achieve more than each of you can on your own. By making decisions based on your values, you will also grow closer together. Make the decision that you are going to be a union to achieve your goals together and avoid the secrets and devastation that come from financial infidelity.

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