Financial Infidelity

DEFINITION of 'Financial Infidelity'

Financial infidelity occurs when couples with combined finances lie to each other about money. For example, one partner may hide significant debts in a separate account while the other partner is unaware. Another common example is when one partner makes large discretionary expenditures without discussing the matter with their partner.

BREAKING DOWN 'Financial Infidelity'

Money can be a big point of contention among couples, so it is important for each partner to be open about his or her financial situation, expenditures and attitudes toward money. A good idea is to go over both partners' financial pictures before combining finances. Also, setting up a mutually agreeable system for handling expenditures can help avoid many fights down the line. For instance, many couples set up an allowance system, which allows each partner to spend a set amount each month without have to consult the other. This allows for partners to maintain part of their financial independence while still working toward mutual financial goals.