Financial Infidelity at Its Worst

When your spouse betrays your trust, it can be emotionally devastating but when the infidelity has to do with money, the results can crush a lot more than your feelings.

Financial Betrayal

One of my clients, we’ll call her Jane, was married 28 years when her husband’s business was rendered obsolete. She had been a homemaker while the children were young and was now working part-time. Her husband, let’s call him Dick, had always handled the finances and really enjoyed playing in the stock markets. He had experienced moderate success so he decided he would become a full-time options trader to earn money for the 10 years remaining to retirement. He took a course, bought a new computer with 3 monitors and spent 6-10 hours a day staring at charts and graphs.

As the years went by, Jane would ask daily how he did that day and his response was always the same, “not too bad”. During those 10 years, they maintained the lifestyle that they had always enjoyed, going on semi-annual trips to Europe, and continued doing improvements on their million-dollar home.

However, gradually Dick became more and more distant and would share less and less information with Jane about the results of his trading. Their relationship began to deteriorate and she came to see me for a “just in case” analysis of her finances in the event they divorced. She stashed away every document she could get her hands on from tax returns to brokerage statements and brought a stack about a foot tall to her first appointment.

How Did This Happen?

I spent some time reviewing everything and as I moved from one document to the next, the reality revealed itself to me. Then I had to break the bad news to her. During those 10 years leading up to retirement, Dick had not made as much money as she had thought. In fact, he had made NOTHING!!!! His total returns for the entire 10 year period were actually a slight loss. So what were they living on? How were they affording the trips to Europe? Dick had slowly been depleting their retirement savings to the tune of 1.5 million dollars. They were down to the last $150,000 in cash and their only other asset was the house.

Jane was devastated. The betrayal she felt over the extended dishonesty  was even more difficult than if he had been having an affair. The trust was damaged so badly, that she immediately filed for divorce to protect herself from any further losses.

This horror story is just one very sad example of financial infidelity at its worst. The most common scenario is the credit card that the one spouse knows nothing about that ends up being a $25,000 debt or the secret bank account that someone has been diverting money to without the knowledge of the other spouse. Regardless of the impact, size, or duration of the deception, this is marriage-destroying behavior. 

Create a Good Partnership

Marriage is a partnership on all levels. The minute you set up an environment with secrets, you sow the seeds of mistrust and betrayal. Do yourselves a favor and insist on a monthly financial meeting where you and your spouse review all the family finances. Discuss your goals and look at your progress toward those goals. Together, make any changes in your spending habits that need to be made to reach them.

When you work together toward a secure financial future, it will deepen your bond, build trust and cement your futures. Don’t let this nightmare become your story.