Ever splurge on something without your spouse or significant other knowing about it? A pricey lunch? A bauble from a shop? Did you avoid telling them?
You may have committed financial infidelity.
With the holiday shopping season upon us and the stores full of shoppers, a new study surveys the phenomenon — which may be intuitively familiar but has been little studied — and its various effects.
“Romantic relationships are built on trust, but partners are not always honest about their financial behavior — they may hide spending, debt, and savings from one another. This article introduces the construct of financial infidelity, defined as ‘engaging in any financial behavior expected to be disapproved of by one’s romantic partner and intentionally failing to disclose this behavior to them,’ ” said the study published recently in the Journal of Consumer Research.
The authors of the study, “Love, Lies, and Money: Financial Infidelity in Romantic Relationships,” included Hristina Nikolova, a Boston College marketing professor.
“Understanding financial infidelity is important because financial matters are one of the major sources of conflict within romantic couples and prior research has shown that keeping money-related secrets in relationships is a ‘deal breaker,’ “ Nikolova said in a statement from the college. Conflicts over money have become a leading cause of divorce, the study said.
Financial infidelity appears to be common. Forty-one percent of adults who combine finances with their partners have admitted to committing financial deceptions, while 75 percent of adults say financial deceit has affected their relationships in some way, according to survey data.
“A few things that couples can do to prevent financial infidelity is to talk more, get on the same page regarding both joint and individual goals they might have, and also budget for some occasional indulgences along the way of achieving their long-term financial goals,” said Nikolova, whose research examines consumer psychology and, in particular, how couples make decisions.
The authors, who also included researchers from University of Notre Dame, University College London, and Indiana University, developed a Financial Infidelity Scale to measure consumers’ financial infidelity proneness and examine how financial infidelity affects consumption, the Boston College statement said.
People more prone to financial infidelity showed a stronger preference for purchase options such as using cash, using a personal rather than joint credit card, plain packaging, and shopping at generic rather than specialty stores, the study said.
In addition to its potential harmful effects on relationships, secret spending could hamper a couple from reaching their financial goals and their ability to use the money to enjoy “shared positive consumption experiences,” the study said.
Financial advisers, clinical therapists, and relationship counselors could all benefit from understanding financial infidelity, the study suggested. It also said a discussion of financial infidelity could be included in marriage preparation classes, noting that some Catholic parishes are already doing that.
The study said companies could take actions to help curb financial infidelity, including, for example, offering an incentive to use joint credit cards rather than cash.
At the same time, the study noted, some businesses, such as beauty salons and gift shops, might take a hit if they make it harder for secretive spenders by following a recent trend of going cash-free.
“While businesses may reduce costs through accepting only digital payments, consumers strategically using cash may be less willing to shop at hedonic retailers,” the study said.
The study also noted that, in some cases, secretive financial practices might be necessary.
“It is important to recognize,” the study said, “that some consumers may hide money from their partner to escape violence or protect their own safety, rather than simply to indulge in immediate gratification“ or because of an everyday disagreement over money.
“In environments characterized by strict religious adherence or conservative attitudes toward gender norms, women could risk violence if they are unable to conceal socially disapproved financial transactions, such as purchasing birth control or abortion services,” the study also said. “Policies enacted by companies or governments unintentionally restricting concealed purchases could have detrimental consequences for vulnerable consumers.”
Sonya Lutter, a Kansas State University professor who has done research on financial stress in relationships, said the study was an “impressive piece of research.”
She speculated that financial infidelity might be worse for relationships than sexual infidelity. “One thing the authors talked about, but didn’t test was the correlation and/or impact of sexual v. financial infidelity on relationship outcomes. I suspect that financial infidelity is more damaging to a relationship than sexual infidelity because money represents what I value whereas sexual infidelity may just reflect a passing urge with no emotional attachment,” she said in an e-mail.
The study suggested a number of avenues for further research, including looking into how financial infidelity is affected in the common situation when one partner has taken on the role of the CFO of the household. Does the CFO feel more free to spend without consulting the non-CFO? Or does the non-CFO feel pressure to spend secretly to avoid disapproval from the CFO?
Another possible avenue would be to look at financial infidelity in other countries, the study said, noting that data collected by a large European bank suggested varying rates in different countries.
”These findings across a range of cultures suggest that financial infidelity is not limited to the United States, and cultural factors might determine its prevalence,” the study said.
Martin finucane can be reached at firstname.lastname@example.org