Are you cheating on your spouse? Financial infidelity is another way of saying you spend household money without telling your other half about it. It happens all the time. In fact, according to a new survey by The American Institute of CPAs (AICPA)1, three in 10 adults who are either married or living with a partner admit to buying big-ticket items without discussing it first and stashing away purchases so their significant other doesn’t realize they’ve been shopping.
It’s understandable to want to go out and splurge without permission – particularly after operating under a tight budget in recent years. But spending an inordinate amount of money without your partner’s knowledge is not a great idea. Part of the reason is because household finances may continue to be tight and, even if they’re not, budgetary discipline is important for long-term financial security. But another reason it’s not a good idea is because of the damage it can do to your marriage.
About 27% of couples have outright arguments over money. According to the AICPA, money is the most volatile topic in a marriage, beating out other heated arguments over child rearing, division of chores, and time spent with and/or choice of friends. More than half (58%) of financial arguments are over how one partner’s definition of “needs” and “wants” differs from the other’s2. For example, some women can’t live without a new pair of shoes, while some men need to buy the newest cell phone the day it hits the market. Are these needs or wants?
The answer to that will vary in every relationship. Part of being in a relationship is negotiating what is acceptable and what is not – like flirting with a waitress or bartender. The same goes for money. As a couple, it’s important to sit down and define necessary versus discretionary spending. Be prepared to negotiate these points. Even set aside a specific amount of discretionary spending for each spouse to cover individual preferences like tickets to sporting events or a day at the spa. 3
1[CLICK HERE to read the article, “Lying to your spouse about money? Join the club,” at CNNMoney.com, May 4, 2012.]
2 [CLICK HERE to read the news release, “AICPA Survey: Finances Causing Rifts for American Couples,” from The American Institute of CPAs, May 4, 2012.]
3 [CLICK HERE to read the article, “Marriage Maintenance When Money Is Tight,” at The New York Times, March 30, 2012.]
Whether staying home by choice or not, nearly one in five (18%) Americans between the ages of 35 and 54 are not participating in the workforce. If a couple decides together that one spouse should stay home while the other one works, it can put a strain on the marriage but at least it’s a mutual choice. However, when this scenario is not by choice it can wreak havoc on the relationship.
According to the Brookings Institute, there is a strong correlation between changes in earnings and changes in marriage. In fact, men that experience the most adverse economic changes also experience the largest declines in marriage. The economy has not only increased stress and arguments among married couples, it’s contributed to many singles simply putting off marriage altogether until they are more financially secure.
No matter how you look at it, managing money when you’re in a relationship can be a difficult proposition. The AICPA recommends working with an advisor as a neutral third party to help you establish and reinforce financial goals, pay bills, monitor accounts and bring up the topic of unusual spending patterns. This might work better than a spouse having to broach the topic of excess spending – or worse yet – not bringing it up at all and stifling any feelings this scenario may ignite.
If we can help you in any way manage the financial situation in your household, please contact us.
[CLICK HERE to read the article, “The 86 million invisible unemployed,” at CNNMoney.com, May 4, 2012.]
[CLICK HERE to read the article, “The Marriage Gap: The Impact of Economic and Technological Change on Marriage Rates,” at The Brookings Institution, February 3, 2012.]
Source: Woods Blog Old