For me, honesty is one of the most important values in any relationship, especially a marriage. My first experience (thankfully, vicarious) of the destruction caused by financial infidelity was a co-worker in my office whose husband ran off with another woman, but completely drained their joint account just before he did. That left her both without a husband and also financially destitute.
I don’t know anything about how that woman’s sad story continued, since we weren’t close, but it was a shocking wake-up call to me. I learned from her experience to maintain control over my own money no matter how much I love my husband. (Which I do, deeply.)
Apparently, there are many forms of financial infidelity even if the spouses are physically faithful to each other.
**Their Cheating Heart, Your Damaged Retirement Plan**
**Financial infidelity destroys trust. It can deliver a serious blow to your post-career planning, too.**
**By John F. Wasik, The New York Times, April 15, 2022**
**Financial infidelity is a many-headed beast: It could be debts accumulated before a marriage that go undisclosed, a secret account, unbridled credit card bills or money problems triggered by substance abuse or a gambling addiction.**
**In a recent survey conducted by the National Endowment for Financial Education, a surprising number of spouses admitted to having been financially unfaithful. Two in five people polled said they had “committed some act of financial deception,” and 85 percent of those people said the indiscretion affected the relationship, with the effects varying from the low level — an argument — to separation or divorce....**
**The leading forms of financial deception, according to the endowment’s poll, were hiding bank accounts, statements, bills or cash from a partner or spouse. One in five people said they had lied to their partner when dealing with finances, debt or income.... Extensive research shows that conflicts over money are one of the leading causes of divorce. ...** [end quote]
The article discusses bankruptcy, job loss resulting in penalties on a 401(k) loan and other situations, with an emphasis on how the mess can interfere with saving for retirement. The author suggests professional psychological, marital and financial counseling.
Community property states will have a different situation than non-community property states. DH and I lived together in a non-community property state (DE) for 5 years before marriage. I set up a joint account for household expenditures such as food, utilities, insurance, etc. but have carefully maintained our separate assets since then even though we were married in 1993. I still transfer equal amounts of money from our personal accounts into our joint account every month. We each have complete separate control over our personal accounts. My Revocable Living Trust (situs in DE) owns the house. In the unlikely event of divorce, our assets could be cleanly divided since I have scrupulously avoided cross-contamination.
One study showed that, after divorce (on average) the man’s standard of living increased 20% while the woman’s declined 60%. On the other hand, I have read anecdotes from men who said they lost significant assets as a result of divorce.
Financial infidelity is an ugly subject, much like physical infidelity. “Trust, but verify” is one approach. Another is to set up the assets (with clear ownership of assets and/or a pre-nup) so that a betrayal of trust won’t result in financial disaster.