08 Apr How to spot financial infidelity and what to do about it
Finances are often a source of disagreement in relationships. In fact, 36% of Australian couples report disagreeing about money at least monthly or more frequently. But when one partner fails to be truthful about money, this not only leads to relationship issues but a whole host of financial, tax and legal implications as well.
Lying to a partner or family about finances – including being dishonest about what they spent their money on – is known as ‘financial infidelity’. You might think that hiding the purchase of those new shoes, or racking up a little bit more debt without telling your spouse, is no big deal. But a 2024 Finder survey found that one in five Australians think financial infidelity is actually worse than physical infidelity.
Unfortunately, financial infidelity is quite common. Nearly a quarter of Australians admitted to ‘fibbing’ about their finances to their partner or family. This can cause numerous problems for the average Australian family, but financial infidelity is particularly disastrous in high-net-worth circumstances or if you have a complicated relationship status (such as custody or spousal maintenance payments).
If you’re in a relationship – whether you’re de facto or married – you must stay aware of the risk of financial infidelity and be aware of the signs. Even if you trust your partner, it’s wise to be prepared.
In this article, we’ll examine financial infidelity in relationships – what to look out for and what you can do about it.
What is financial infidelity?
We all know what infidelity is in a romantic relationship, but financial infidelity can be a bit more complex.
Financial infidelity occurs when one partner engages in deceptive behaviour related to finances or money, particularly when it undermines shared financial goals, involves actions that should typically be disclosed, or would typically require the other partner’s consent.
Financial infidelity isn’t just something that is morally wrong – it’s also legally wrong. While it’s not considered a crime under Australian law, recent legislation updates in section 4AB of the Family Law Amendment Act 2024 recognise financial abuse as family violence. And, if you hide your financial position during a settlement, there could be serious consequences.
More legislation is likely coming as well. In a report published on 5 December 2024, the Parliamentary Joint Committee on Corporations and Financial Services made extensive recommendations for reform to financial systems like child support collection, the tax system, superannuation, insurance and more to close loopholes that are exploited by perpetrators of financial abuse.
Financial infidelity versus financial abuse
Financial infidelity is not necessarily financial abuse – which is using money to control or manipulate a current or former partner – but aspects of it can overlap. For example, your partner might use hidden debts to hurt you financially. This is sometimes called ‘revenge debt’ and is something that is both financial infidelity and financial abuse.
Financial infidelity takes many forms
There is a wide spectrum of financial infidelity. These can range from hiding small purchases to accumulating life-impacting debt. Some examples of financial infidelity could be:
- Hiding purchases/assets
- Making key financial decisions without consulting their partner
- Having secret bank accounts or credit cards
- Not disclosing debts (e.g. tax, credit card, personal loan, gambling etc)
- Hiding income or assets, for example, through cryptocurrency
- Signing contracts or making investments without disclosure to partner
- Failing to reveal true income or expenditure to partner
- Using shared savings to support gambling
Signs of financial infidelity
One of the trickiest aspects of financial infidelity is finding out about it, since it is, by its nature, hidden or secret. But there are a number of red flags that could indicate financial infidelity in your relationship.
If your partner is:
- Being secretive about or hiding financial statements, tax statements, etc
- Denying you access to bank passwords, etc
- Telling you they have paid off debts (e.g. tax, credit card) but refusing to show proof
- Shutting you down or gaslighting your concerns
- Refusing to talk about finances
- Requesting to borrow money without explanation
- Unnecessary changes to bank accounts, e.g. name changes
- Taking full control of shared finances
… or if you find:
- Unexplained activity on your bank statements
- Unexplained withdrawals from your bank accounts
- You’re getting an influx of mail from financial institutions
These could be signs that things aren’t right in your relationship.
What you can do about it
So what do you do if you think you’ve discovered financial infidelity in your relationship?
- First, communicate. Try to understand the nature and extent of the problem. Ask your partner for all the financial documents, and then get in touch with the relevant financial institutions yourself to ensure you have accurate information.
- Second, evaluate the financial, legal and tax risks. Take steps to protect your own finances if necessary.
- Third, seek financial advice from a qualified expert. In the first place this will likely be a financial advisor, and they can help you to understand what to do next from a financial perspective. If the financial infidelity has gone so far that your relationship is ending, seek advice from your family lawyer as well (we can help!).
Getting support
If you find yourself grappling with financial infidelity, you’re not alone, and you don’t have to navigate the fallout by yourself, either. Whether you’re working through betrayal or preparing to separate, getting the right support will make all the difference.
Get in touch with Toomey Family Law today for legal advice and genuine understanding.