Yes, financial infidelity is grounds for divorce (in the at-fault states where that matters). In this post, we’ll cover everything you need to know and even take an in-depth look at a real couple dealing with the aftershocks of financial infidelity.
Just a heads-up: this post isn’t legal advice, so be sure to talk to a professional if you need legal help.
Two real examples of divorce after financial infidelity
David and Halima have been married together for a year (this is their second marriage for both). As you’ll see, they both suffer from deep emotional (and financial) scars from their past marriages which ended due to financial infidelity.
They initially came on my podcast because David wanted to know if he could retire early. But when I started to peel back the layers of their finances, I was truly shocked. And not just once, multiple times.
Halima’s first marriage ended because of her husband’s financial infidelity. It was a tough one – she was evicted and lost everything except for her children:
Halima: [00:23:05] I lost everything except for my children.
Ramit Sethi: [00:23:09] Do you mind telling me a little bit of what happened?
Halima: [00:23:11] No, I don’t mind. With my first marriage, I divorced my ex-husband because of financial infidelity.
Ramit Sethi: [00:23:22] What happened?
Halima: [00:23:24] We were going under, and I didn’t know. I was a high school teacher, and I had a great job, and I got pregnant with my firstborn and decided that I wanted to be a housewife and have babies, raise children. And that the man of the house was going to work. And my ex-husband was in banking. He was in finance. And to me, I feel like if you’re dealing with money, you know everything about money.
Ramit Sethi: [00:24:07] Ah.
Halima: [00:24:08] Yeah, yeah. The house that we purchased when I was working, we were going into foreclosure. He was responsible for all the bills, and I trusted him with that as any good wife. In the beginning, I was married to my ex for about 10 years, 12 years total, being together with him. So I trusted him, and I loved him.
The house was being sold because I thought that—I was pregnant with my second now. They’re only 16 months apart, and we needed to upgrade. We were living in a really small 1,200 square foot home, so we wanted to upgrade and buy something bigger and better. So for about six months while we were—we sold the house, but it was actually foreclosed. The bank took it.
Ramit Sethi: [00:25:10] You didn’t know this?
Halima: [00:25:11] I didn’t know this. I didn’t know this.
Ramit Sethi: [00:25:13] Wow.
Halima: [00:25:13] We ended up renting a house. And while we were renting this house and sold our home, with that money, we were going to buy something bigger. So for about six months, I became really, really good friends with the real estate agent that we were working with because my Saturdays and Sundays would be going to look at homes with him. Even weekdays, we’d look at homes. So it was this grand plan for him to drag things on because he knew that once I found out, I was going to leave him.
And it ended the day after Halloween, on November 1st, 2019. We got a knock on the door. It was the owner of the house with the sheriff, another cop, evicting us. My son, at the time, was about 18 months old. My daughter was a little bit older. They were both in diapers, and I still have the hamper that’s downstairs that I was able to fill in with whatever I could. And that’s how I left the house.
And my whole foundation, my whole world came crashing down. Long story short, he left the country because there was really nowhere else for him to go. Nobody trusted him anymore. He was borrowing money left and right. Nobody believed him anymore. And he left me with the two babies.
You can tell that Halima remains deeply affected by her ex-husband’s financial infidelity, not only did it end her first marriage, but its lasting effects are affecting her current one with David too.
David’s first marriage ended due to his ex-wife’s financial irresponsibility and violent behavior. His ex-wife was materialistic and resistant to his efforts to stabilize their financial situation, which eventually culminated in a physical altercation where she threatened his life, prompting him to involve the police and end the marriage.
Ramit Sethi: [00:12:03] Jeez. What was the second time you hit rock bottom?
David: [00:12:07] After my first divorce. Well, my only divorce because that’s not happening again.
Ramit Sethi: [00:12:15] Do you mind sharing what happened?
David: [00:12:18] So my ex-wife, she liked to spend a lot. She was very materialistic. She grew up with her mom not working, so she didn’t want to work. She had a job. And then while we were on our honeymoon, she got laid off. It was literally right in the middle of the honeymoon. She got a message from her supervisor saying that the company was bought off, and she’s not going to be with the company anymore when she comes back.
Ramit Sethi: [00:12:52] Oh my God.
David: [00:12:53] And after that, she didn’t have a job. She was physically violent towards me because I wouldn’t listen to her. She would tell me not to do overtime, but I’m like, how are we going to pay bills? Yeah, that dragged on for three years. And the point where I was just like, I can’t do this anymore, I have to get divorced, is when she literally threatened to kill me. I had to get the police involved and everything.
Ramit Sethi: [00:13:27] Okay. Wow. Well, I’m sorry you had to go through that. That is tough, devastating. Nobody should have to go through that. And now I think I understand a little bit more about why you said you feel rich. Because you don’t have the things that you had in the past from 22 on.
David: [00:13:51] Right.
Ramit Sethi: [00:13:51] Thank you for walking me through it. I really appreciate it.
Now that you’ve seen some real examples of how financial infidelity can play out, let’s walk through the other implications.
NOTE: Financial infidelity comes in many forms, and not all lead to divorce. Later in this post I’ll show you another example of a real couple dealing with financial infidelity that did NOT lead to a divorce.
Legal Implications of Financial Infidelity in Divorce
How financial infidelity is viewed by divorce courts
Divorce courts take financial infidelity seriously as it undermines the trust necessary for a fair divorce settlement. When one spouse conceals assets, income, or debts, it disrupts the equitable division of property. This behavior is not only ethically questionable but can have significant legal consequences during divorce proceedings.
Courts view financial infidelity as deceitful and, depending on the jurisdiction, may impose penalties or adjust settlements to account for the dishonesty. The severity of these consequences often correlates with the extent and intentionality of the financial deception. Judges typically consider financial transparency as a fundamental aspect of the divorce process, and any deliberate attempt to subvert this can be met with stern legal repercussions.
In many states, judges have the discretion to penalize the offending party. This could mean awarding a larger portion of the marital assets to the innocent spouse or ordering the deceitful spouse to pay additional fines. The goal is to ensure fairness and accountability in the division of assets. For example, if a spouse is found to have hidden $100,000 in a secret account, the court might award the entire amount, or even more, to the other spouse as compensation.
Other potential legal implications of financial infidelity in divorce include:
- Contempt of court charges if the deception continues during legal proceedings.
- Loss of credibility in other aspects of the divorce case, potentially affecting child custody decisions.
- Mandatory financial disclosure audits or investigations at the expense of the deceitful party.
- In extreme cases, criminal charges for fraud or perjury if false statements were made under oath.
It’s important to note that laws regarding financial infidelity in divorce vary by state. Some jurisdictions follow “no-fault” divorce laws, which may limit the impact of financial infidelity on the divorce settlement. However, even in these cases, intentional concealment of assets can lead to penalties.
Potential impacts on asset division and alimony
Asset Division: Courts aim for an equitable division of marital assets. If financial infidelity is discovered, the offending spouse may receive a smaller share of the assets. For example, if one spouse hides a significant amount of money, the court may award a larger portion of the discovered assets to the other spouse to balance the scales. This adjustment is meant to compensate for the attempted deception and ensure fairness in the final settlement.
In practice, this could mean that if a spouse concealed $200,000 in a secret investment account, the court might award the entire amount, or even more, to the other spouse. The exact division would depend on the specific circumstances of the case and the judge’s discretion.
Additionally, courts may order a more thorough investigation of the deceptive spouse’s finances, potentially uncovering other hidden assets. The costs of these investigations are often charged to the spouse who committed financial infidelity.
Alimony: Financial infidelity can also affect alimony decisions. Judges may increase the alimony payments to compensate the innocent spouse for the financial deceit. Alternatively, the guilty spouse might be required to pay a lump sum alimony to make up for the hidden assets.
For instance, if a spouse was found to have understated their income to avoid higher alimony payments, the court might:
- Retroactively adjust alimony based on the true income figures
- Impose a higher alimony amount going forward
- Order a one-time compensatory payment
In some cases, financial infidelity might also extend the duration of alimony payments. If the deception significantly impacted the innocent spouse’s financial situation or standard of living, the court may order alimony for a longer period to allow for financial recovery.
It’s important to note that the impact on alimony can work both ways. If the spouse receiving alimony is found to have hidden income or assets, it could result in a reduction or termination of alimony payments.
What to Do If You Suspect Financial Infidelity
Maintain composure & stay vigilant
Stay vigilant: Watch for red flags such as unexplained expenses, hidden accounts, or sudden changes in spending habits. This involves paying close attention to your shared financial activities without jumping to conclusions. Some specific things to look out for include:
- Unusual transactions on bank or credit card statements
- Missing financial documents or statements
- Unexplained cash withdrawals
- New credit cards or accounts you weren’t aware of
- Sudden secrecy around financial matters
- Lifestyle changes that don’t align with known income
Keep a record of any suspicious activities you notice. This documentation can be valuable if you need to address the issue later.
Maintain composure: While it’s natural to feel angry or betrayed, avoid confronting your spouse without solid evidence. Reacting emotionally or making accusations without proof can damage your relationship and make it harder to address the real issues if financial infidelity is occurring. Instead:
- Take time to process your emotions privately
- Continue gathering information calmly and methodically
- Consider speaking with a trusted friend or therapist to help manage your feelings
- Plan how you’ll approach the conversation if you do find concrete evidence
Remember, there may be innocent explanations for some financial discrepancies. Maintaining composure allows you to approach the situation rationally and increases the likelihood of a productive conversation if you do need to confront your partner.
If your vigilance confirms your suspicions, prepare for a calm, fact-based discussion. Choose a time when you’re both relaxed and can talk without interruptions. Present your concerns and the evidence you’ve gathered without accusation, and be prepared to listen to your partner’s explanation.
Collect evidence before confronting them
When addressing financial infidelity, it’s important to gather a paper trail before approaching your partner. It would not be wise to confront your partner without sufficient evidence as this can trigger their denial and defensiveness (even if they are wrong). Here’s how to effectively collect evidence:
Document everything: Keep a detailed record of any suspicious financial activities you observe. This includes:
- Creating a chronological log of unusual financial behaviors
- Noting dates, amounts, and circumstances of suspicious transactions
- Recording any conversations or incidents related to finances that seem off
Collect financial statements: Gather bank statements, credit card bills, tax returns, and investment account information. Specifically:
- Obtain copies of statements for all known accounts
- Look for statements from unfamiliar financial institutions
- Compare actual statements with what your partner has reported or shared
- Review past tax returns for discrepancies in reported income or deductions
Track unusual transactions: Note any large withdrawals, transfers, or purchases that seem out of the ordinary. Pay attention to:
- Unexplained cash withdrawals
- Transfers to unknown accounts
- Purchases that don’t align with your shared lifestyle or known expenses
- Recurring payments to unfamiliar entities
Preserve digital evidence: Save emails, text messages, or other communications that may indicate financial dishonesty. This might include:
- Screenshots of suspicious online transactions
- Emails regarding accounts or purchases you weren’t aware of
- Text messages discussing financial matters that seem secretive
- Social media posts showing purchases or activities inconsistent with known finances
Additional steps to consider:
- Check credit reports for both you and your partner to identify any unknown accounts or loans
- If possible, review your partner’s pay stubs or income statements to verify reported earnings
- Keep all evidence in a secure location, preferably one your partner can’t access
Remember, the goal is to gather factual information, not to invade privacy or break trust further. If you feel uncomfortable collecting this information or if doing so might put you at risk, consider seeking help from a financial professional or lawyer.
By thoroughly collecting evidence, you’ll be better prepared to have a fact-based discussion about financial infidelity if necessary.
Confronting your partner about their financial infidelity
Confront with the intention of understanding, not being accusative, and with a mindset of seeking to understand rather than to blame. I know, this is easier said than done, but it can lead to more productive discussions and potentially salvage the relationship.
Expect to have possibly multiple conversations about this topic with your partner, depending on the duration and the severity of their wrongdoing.
When confronting your partner:
- Choose a private, calm setting for the conversation
- Start by expressing your concerns without accusation
- Present the evidence you’ve gathered factually
- Listen to your partner’s perspective without interrupting
- Ask open-ended questions to understand their motivations
- Discuss the impact of the financial infidelity on you and the relationship
- Explore potential solutions together
Finding out about financial infidelity can be extremely hurtful, and you may be tempted to lash out your anger at your partner for their wrongdoings. It’s natural to feel betrayed, angry, or disappointed.
In my experience, financial infidelity is the symptom of unhealthier financial habits between couples. It often points to deeper issues within the relationship, such as:
- Poor communication about money
- Differing financial values or goals
- Unresolved power imbalances or an unhealthy relationship dynamic
- Trust issues extending beyond finances
- Individual struggles with self-worth or control
Such confrontations are pivotal moments in relationships, and they can often be breakthroughs for a better relationship. When handled constructively, these difficult conversations can:
- Open up honest dialogue about money
- Reveal underlying issues that need addressing
- Lead to the establishment of healthier financial habits
- Strengthen trust and intimacy in the long run
What to do when you want a divorce
If you’re at risk of abuse or violence, prioritize safety and start collecting resources to keep yourself protected. At the very least, have the hotlines of domestic violence centers, shelters, or law enforcement so that you can reach out for help if you really need it.
Otherwise, if you’re set on divorce:
Secure Your Finances:
- Open individual bank accounts and ensure your income is deposited into them. This gives you control over your own money and prevents your partner from accessing it without your knowledge. If you haven’t already, set up direct deposit of your paycheck into your personal account.
- Monitor joint accounts closely for any unusual activity. Set up alerts for large transactions or changes in account balances. If you notice any suspicious activity, document it for potential use in divorce proceedings.
- Consider freezing joint credit cards or closing them if possible to prevent additional debt accumulation.
Protect Personal Information:
- Change passwords on financial accounts, online banking, and other sensitive accounts.
- Ensure your financial documents are secure and not easily accessible to your partner. This might mean storing physical documents in a safe deposit box or with a trusted friend or family member. For digital documents, use encrypted storage solutions and enable two-factor authentication where possible.
- Update your login information for any shared accounts like streaming services, online shopping platforms, or utility accounts.
Create an Emergency Plan:
Develop a plan for a quick and safe exit just in case:
- Having a packed bag with essential items and a change of clothes
- Keeping emergency cash in a safe place that your partner doesn’t know about
- Gathering important documents such as identification, birth certificates, marriage license, and financial records
- Identifying a trusted person to contact in case of emergency
- Knowing the location of nearby shelters or safe places you can go if necessary
Additional measures to consider:
- Review and potentially update beneficiaries on life insurance policies, retirement accounts, and other financial instruments.
- Consult with a lawyer about the legality of recording conversations or gathering certain types of evidence in your state.
- Start building an independent credit history if you don’t already have one.
Remember, these steps are about protecting yourself financially and personally, not about retaliation. The goal is to ensure your safety and financial stability as you navigate this challenging situation.
Consult a divorce attorney:
If your partner’s financial infidelity has caused irreparable damage in your marriage, you should strongly consider seeking professional advice from a divorce attorney, who can advise you on legal options and help protect your financial interests. A skilled divorce attorney can:
- Provide guidance on your rights and obligations under local divorce laws
- Help you understand the potential outcomes of different legal strategies
- Assist in negotiating a fair settlement, especially regarding division of assets and debts
- Represent your interests in court if necessary
- Advise on child custody and support issues, if applicable
They can assist in obtaining restraining orders or other legal protections if there is a threat of harm. This is particularly important if the financial infidelity is accompanied by other forms of abuse or if you fear for your safety.
Consider hiring a forensic accountant:
Forensic accountants specialize in uncovering financial discrepancies and can be invaluable in cases of financial infidelity. They can uncover hidden assets and complex financial maneuvers, ensuring that all marital assets are accounted for. This might include:
- Tracing funds through multiple accounts or investments
- Identifying assets held under different names or in shell companies
- Uncovering unreported income or hidden business interests
They can provide a thorough analysis of financial records to identify discrepancies and potential fraud. This may involve:
- Reviewing tax returns, bank statements, and other financial documents
- Analyzing spending patterns and cash flow
- Identifying inconsistencies between reported income and lifestyle
Their findings can be used in court to support your case and ensure a fair settlement. A forensic accountant can:
- Provide expert testimony if the case goes to trial
- Prepare detailed reports that can be used in settlement negotiations
- Assist your attorney in understanding complex financial issues
Additional professionals to consider:
- Therapist or counselor: To provide emotional support during this challenging time
- Mediator: If you and your spouse are willing to work together, a mediator can help facilitate discussions and reach agreements outside of court
Remember, while professional help comes at a cost, it can be a wise investment in protecting your financial future and ensuring a fair resolution to your divorce proceedings.
How to recover from financial infidelity
If you aren’t set on divorce and if your partner is willing to make up for their wrongdoings in order to salvage the relationship:
Change your money dynamic
Both partners need to be involved with money. This is a fundamental shift that can help rebuild trust, prevent dishonesty, and prevent future financial infidelity. Here’s are a few immediate steps to take:
- Full disclosure policy: Implement a policy of full financial disclosure. This means being open about all income, expenses, debts, and financial decisions.
- Shared access to accounts: Ensure both partners have access to all financial accounts. This transparency can help rebuild trust and prevent secret financial activities.
- Joint decision-making: Make it a rule that all major financial decisions are made together. This includes large purchases, investments, and any changes to your financial setup.
Once the both of you have established a baseline level of financial trust, here are several more steps you can take to improve your money dynamic:
- Have regular financial meetings: Schedule weekly or monthly meetings to discuss your finances openly. Use this time to review accounts, discuss upcoming expenses, and plan for financial goals.
- Have regular financial check-ins: Besides formal meetings, have casual check-ins about money matters. This helps normalize money conversations and keeps both partners informed.
- Equal participation in budgeting: Work together to create and maintain a budget. Both partners should have input on spending categories and limits.
- Financial education for both: If one partner is less financially savvy, invest time in learning together. This could involve reading financial books or by taking courses
- Alternate bill-paying responsibilities: Take turns managing bill payments to ensure both partners are aware of regular expenses and account balances.
- Set financial goals together: Discuss and agree on short-term and long-term financial goals. This helps align your financial efforts and gives you shared objectives to work towards.
- Shared responsibility for financial tasks: Divide financial tasks like tracking expenses, reconciling accounts, or researching investment options between both partners. Remember, changing long-established patterns takes time and effort. Be patient with each other and celebrate small victories as you work towards a healthier financial dynamic.
Understand your money psychology
Recovering effectively from financial infidelity requires both you and your partner to dive deeper into your money psychology. This will help the both of you understand the underlying causes of financial dishonesty and work towards preventing them from happening again.
Go deeper and try to understand the causes of financial infidelity in your relationship. These might stem from childhood experiences with money, learned behaviors from family or society, or personal insecurities. For example, someone who grew up in a household where money was always tight might develop a scarcity mindset, leading to secret hoarding of funds. Alternatively, a person raised in a family that equated spending with love might engage in hidden purchases to feel valued.
Identify your invisible scripts – the unwritten rules and beliefs that guide your financial behavior without you even realizing it. Here are some of the most common invisible scripts about love and money that I hear from couples:
- “Talking about money is unromantic.”
- “It’s normal to fight about money. Money is stressful.”
- “He just isn’t a money person.”
- “I make it; she spends it!”
- “I don’t need much, but it seems like they’re always spending on something. Like, do we really need another toy for the kids?”
- “Rich Life? We’re just trying to pay our bills.”
- “We’ll probably have our debt until the day we die.”
Consider couples therapy:
Couples therapy can help with addressing the emotional fallout of financial infidelity while simultaneously enhancing overall relationship dynamics. A skilled therapist serves as a neutral mediator, creating a safe space for partners to engage in open, honest communication about their financial issues. This process allows both individuals to gain deeper insights into the root causes of the financial infidelity, fostering mutual understanding and empathy.
The therapeutic journey involves more than just discussing money matters; it’s about rebuilding the foundation of trust and intimacy that may have been eroded by financial secrets. Therapists employ various techniques to help couples process complex emotions such as betrayal, anger, and resentment, which often accompany financial infidelity. By addressing these feelings head-on, couples can begin to heal and move forward together.
A key component of the therapeutic process is equipping couples with practical tools and strategies. Therapists teach conflict resolution skills specifically tailored to financial disagreements, helping partners navigate future money-related conversations more effectively. They also guide couples in developing a shared approach to financial management, promoting transparency and collaboration in their financial lives.
When seeking couples therapy for financial infidelity, it’s advisable to look for a therapist with specific experience in dealing with financial issues. Alternatively, consider a specialist in financial therapy, who can offer targeted expertise in the intersection of money and relationships. This specialized approach can provide the most effective support for couples navigating the complex terrain of financial infidelity and its impact on their relationship.
Consider financial counseling:
Financial counselors can impart valuable knowledge on sound financial practices. This empowers couples to make informed decisions about their money, fostering a sense of financial literacy and confidence. The counselor also assists in developing comprehensive strategies to tackle existing debts and establish robust savings plans, tailoring these approaches to your specific circumstances and aspirations.
A crucial aspect of financial counseling is its focus on preventing future instances of financial infidelity. Counselors provide practical tools and resources for improved money management, helping couples establish transparent and collaborative financial practices. They guide partners in setting and pursuing shared financial objectives, fostering a sense of teamwork and mutual accountability in financial matters.
When financial disagreements arise, just like a couples therapist, a financial counselor can serve as a mediator, offering practical solutions grounded in financial expertise. This approach helps couples navigate conflicts constructively, focusing on tangible outcomes rather than emotional reactions.
When choosing a financial counselor, it’s essential to look for recognized credentials such as Certified Financial Planner (CFP) or Accredited Financial Counselor (AFC). These qualifications ensure that you’re working with a professional who has met rigorous standards in financial planning and counseling.
For many couples grappling with financial infidelity, and if you have the resources to afford it, a dual approach combining couples therapy and financial counseling can yield the most comprehensive results. This addresses both the emotional consequences of financial betrayal and the practical skills required for effective money management.
It’s important to view seeking professional help not as a sign of weakness, but as a proactive step towards healing your relationship and securing your financial future.
Another real example of financial infidelity
Both in their forties, Lisa and Jeff have a blended household. They have a $300k net worth, and were recently awarded a $1.275M settlement, an amount that would be transformative for almost any household.
However, rather than uniting the couple in shared excitement, this windfall reveals underlying tensions. Jeff’s admission that he views “her money as her money, and my money as my money” is the first sign that they’re not completely aligned with how they manage their finances.
Lisa: [00:03:00] I was doing well. He was doing well. We were high earners. We didn’t have too many financial problems. And in January of this year, roughly six months ago, I was awarded a seven-figure settlement. And it’s obviously life-changing for anyone to come into seven figures.
Ramit Sethi: [00:03:25] Can you tell me how much it was for?
Lisa: [00:03:27] Yes. So specifically, it was $1.275 million.
Ramit Sethi: [00:03:34] Okay, great. Let’s call it 1.3million. Is that post-tax?
Jeff: [00:03:38] Yeah.
Lisa: [00:03:38] Yes.
Jeff: [00:03:39] Our collective income before this happened was about 150k a year.
Ramit Sethi: [00:03:46] Before this came in, what was your net worth?
Lisa: [00:03:52] It was around 300K.
Ramit Sethi: [00:03:58] Okay. And that’s yours or the two of you?
Lisa: [00:04:01] Anything that we have now is what we’ve built together.
Jeff: [00:04:07] I’ve always counted her money as her money and my money as my money.
Ramit Sethi: [00:04:11] I think that’s a cute phrase, but I actually don’t think that’s doing you any favors.
Lisa: [00:04:17] And it’s the same with the settlement. And I find it really grates on me that he’s like, that’s your money. That’s your money. That’s your money. And I’m like, no, it isn’t. It’s ours.
This joke is quite revealing of Jeff’s overall mindset on money, and it really bothers Lisa. This highlights how a sudden influx of money, instead of solving problems, can sometimes amplify existing ones if not handled with open communication and mutual understanding.
Subsequently, Jeff admits to using avoidance as a strategy to deal with money discussions, leaving Lisa to handle the burden alone.
This pattern of behavior is not just about money; it speaks to a broader communication breakdown in their marriage. Lisa’s feelings of loneliness and the lack of support she experiences in managing their finances are significant because they reveal how unbalanced their partnership has become.
This imbalance is particularly poignant because, despite the financial windfall, Lisa feels isolated in her efforts to secure their financial future. The emotional weight she carries is substantial, and it underscores the importance of both partners being involved in financial decisions, not just one.
Lisa: [00:10:18] I will try to bring something up and he will aggressively tell me no. And he will shut me down and turn away. And I will be like, okay.
Jeff: [00:10:30] I don’t know if I agree with that.
Lisa: [00:10:31] It is totally true.
Jeff: [00:10:31] I usually make jokes. I usually tell you, hey, whatever you want goes.
Ramit Sethi: [00:10:35] This is a common thing with couples. So here’s how it works. I’m just going to break it down. One person, usually the person who likes to be in control and is checking all the apps every day, they see something. And they stew over it for hours, days, sometimes weeks. And then something sets them off. And it’s like this controlled fury. It could be, I love you, and I care about you, but if you answer this question wrong, I am going to murder you. I’m going to cut your neck and you’re going to bleed out here on the bathroom floor. It’s right between those two. You can’t really tell. They go, so what’s this purchase? Like that. It’s like a tiger just making one little sound. Jeff, anything sound familiar?
Jeff: [00:11:26] Yes, it’s funny you said that because she does that. And I immediately assume the knife is coming. And the knife never comes because she doesn’t do the knife.
Ramit Sethi: [00:11:33] That’s correct. That’s correct she doesn’t do the knife. And so you overreact, don’t you?
Jeff: [00:11:39] Yes.
Ramit Sethi: [00:11:40] You come out guns blazing and you use all your unconscious and conscious techniques– diversion, haha jokes, and also just over the top aggressiveness, and then you get what you want, don’t you? Which is what?
Jeff: [00:11:54] I get out of that conversation as fast as I can.
Ramit Sethi: [00:11:56] That’s correct. You escape. So you still remain the pursuee. Lisa, you’re the pursuer but you walk away steaming, frustrated. And that’s it. You take it on yourself. Not very productive. Pretty interesting. I liked that Jeff is being honest, maybe a little too honest. Jeff is admitting to everything, which is in itself a technique.
As we continue talking, we run into the seemingly trivial matter of Jeff buying running shoes on a line of credit – which might appear insignificant at first glance, but it unpacks much deeper issues.
This incident is emblematic of Jeff’s approach to finances—an approach characterized by avoidance, secrecy, and a lack of communication with Lisa.
The fact that Jeff hides even small purchases like shoes speaks volumes about his discomfort with financial discussions and his desire to sidestep responsibility. This behavior is problematic because it erodes trust in their marriage. It’s not about the $149 shoes; it’s about the patterns of behavior that such actions reveal. Jeff’s admission that he pushes financial problems to “later” shows a lack of foresight and an avoidance of the necessary, sometimes difficult, conversations that need to happen in any healthy relationship.
Jeff: [00:21:01] This is tough to admit, but let’s be honest. I hide purchases from her and that’s how she found out about these credit cards. And it’s for the sole purpose that I don’t really have to discuss the purchase with her. I don’t have to, in my mind, get permission. And also in my mind, I’m pushing the problem to later.
And ultimately, in my head, I think I’m going to pay it off before she even really knows about it. But that doesn’t really ever happen. So ultimately, I just have to have a little bit of a come up and I go, yeah, I did this. Sorry, I should have told you. But I do feel a little bit of guilt about it because there’s a mild sense of hiding, of lying, even though I’m not lying necessarily. I’ll tell her what I did later. But it’d be better to be honest and truthful about it.
Ramit Sethi: [00:21:52] When you say you’ll tell her later, is that because she finds out about the purchase and then asks you?
Jeff: [00:21:58] Yeah, I mean, the shoe showed up. The shoes show up and I put them on. And she goes, where did those come from? And I tell her, yeah, hey, I bought some shoes.
Lisa: [00:22:09] I don’t recognize that I didn’t charge and I’ll say what was that for? And that will frustrate him, being asked about the purchase.
Ramit Sethi: [00:22:18] And so as a result, how do you approach money in your relationship now?
Lisa: [00:22:23] So I don’t want to start any conflict. And as Jeff very well knows, I’m averse to conflict, so I will avoid it. If it’s potentially something I have a problem with, it would have to be a pretty big problem for me to bring it up. I would just let it go and deal with it financially on my own, in my own mind and in our financial plan to make plans to pay it off. He has this attitude about money where he’ll be like, ‘it’s just money, I’ll make more. And again, it’s not in a reckless sense. He’s actually pretty frugal. So this discovery paints him in a less frugal light, when he’s actually super frugal.
Lisa and Jeff have a lot to work through to break their old habits. In the rest of the conversation, I help Jeff address his childhood trauma around money and guide Lisa in overcoming her tendency to avoid confrontation, both of which are rooted in their upbringing. Listen to the episode to see how we tackle these issues.
Have Your First Positive Conversation about Money
The words we use to talk about money are extremely revealing. For example, you could say, “We have to talk about money today [sigh],” or you could say, “We get to talk about money today [high five].” Imagine the impact of speaking about money positively over decades together. How would that shape your view perception?
You can change the way you look at money from dread to opportunity, and quickly. It starts by intentionally choosing a different language—even if the conversation is only inside your head. For example:
Instead of: “We can’t afford it.”
Use this: “We can’t afford it yet, but we’re building a plan to save for it.”
Instead of: “That’s for rich people, not for people like us.”
Use this: “I didn’t grow up doing that, but if we want to, we can plan for it.” (Unless it’s something outrageously expensive like buying a private jet, in which case try this: “That’s a nice plane, but I’d rather take a family vacation together.”)
Scripts to Avoid the Most Common Money Fights
Overspending
Instead of this: “Oh my God, did you really buy that? Where is the money going to come from??”
Say this: “I realize I’ve gotten into the pattern of lecturing you about why we need to save. I don’t think it’s working. Do you? [No.] Can we zoom out and decide what we want our money to do for us, together?”
Dividing financial labor
Instead of this: “You never want to sit down and plan our vacation! This is why we end up wasting so much on plane tickets and having to stay in awful hotels.”
Say this: “I made a list of the things I’ve been in charge of with our finances in the last two weeks—and the things you’ve been in charge of. This list isn’t fair to me. I want to talk about redoing our responsibilities. Can you talk Tuesday or Thursday evening?”
Spoiling the kids
Instead of this: “You can’t say no to the kids! You spoil them. They’ll have no self-control, just like you.”
Say this: “Let’s make a list of the money values we want to teach our kids. Which ones are they already learning from us? Which ones do we want them to learn?”
Taking ownership of financial challenges
Instead of this: “You’re sticking your head in the sand. Why do I always have to be the mean parent?”
Say this: “It feels lonely over here thinking about this on my own. I love you and I want a partner in this.
Stop fighting about money for good
In millions of homes across the country, we’re having the same fights about money. One partner feels anxious, the other buries their head in the sand to avoid talking about it. One agonizes over the budget, the other spends on whatever they want. We avoid discussing finances, we tiptoe around difficult conversations, and in the process, we allow money to drive a wedge between us.
What if talking about money felt good? In my new book, Money for Couples (releasing January 1st):
- You’ll learn exactly what to say when talking about money, even if your partner resists talking about money.
- You’ll get the steps to create a joint vision of your Rich Life—one that fits you as an individual and as a couple.
- You’ll learn how your past affects the way you feel about money, and how to change your story to one that feels positive and future oriented
- And much, much more.
