Jolene Hammond* was the first to commit financial infidelity in her marriage. But when she found out that her husband had been siphoning money from their joint checking account into a secret account, she was livid, heartbroken, and disgusted.
“Disgusted mostly with myself,” she said. “How could I rationalize being angry with him for doing almost exactly what I’d done to him?”
Financial infidelity is not an uncommon problem. Roughly 40 percent of Americans have admitted to financial infidelity, according to a 2016 study by the National Endowment for Financial Education.
Understanding why it happens and how to deal with it can help repair the damage and foster trust in the future.
Why financial infidelity happens
In Hammond’s case, her financial infidelity was a symptom of deeper issues in her marriage.
“My career was at a high point, and my marriage [wasn’t] quite so high,” she said. Hammond was traveling 10 days per month and often worked late. She felt like she was entitled to spend her money how she wanted.
“Then the bonus checks began to roll in monthly, and that was ultimately how the dance with the devil began,” she said. When her first check arrived, she opened up a separate bank account to deposit the money.
“It was my money,” she said. “I’ve worked hard for that money, and I’m not going to be sharing the money that I’ve sacrificed so much to earn.”
The couple hardly ever talked about their problems, so “every time I deposited a bonus check into the bank account it was like getting revenge,” Hammond said.
Reading the signs
In a relationship, it’s possible that one spouse or partner does most, if not all, of the money management for the household. Here are a few warning signs that your spouse or partner could be cheating on you financially:
- Your partner refuses to talk about your finances at all.
- Your partner attempts to gain total control over accounts and passwords.
- You notice paperwork for an account you don’t recognize.
- You spot suspicious withdrawals or transfers from your joint checking account.
That last one is how Hammond caught her husband. While accompanying her son to the bank to check on the status of his recent auto loan application, she decided to check the balance on the account she shared with her husband.
She was horror-struck to find out that he’d drained it. After more research, she discovered that he’d transferred the money into a separate account he’d opened.
Dealing with the aftermath
Although Hammond felt like she was living the dream with her secret bank account, it all came crashing down during tax season.
“I failed to realize there was a section on my normal pay stub for bonuses and payouts,” she said. “I clearly couldn’t hide the bold print or suggest it was an error.”
To regain her husband’s trust, Hammond started being upfront regarding her earnings and spending. It was during this time that she discovered his financial infidelity. They both had to face the music.
“The feelings of anger, betrayal, [and] grief had to be dealt with if we were going to survive this huge violation of trust,” she said.
The couple attended relationship counseling and financial coaching sessions and ultimately decided to channel their previously selfish motives into rebuilding their relationship. They used the money they’d been hiding from each other to take a two-week, all-inclusive vacation.
“We reinvested the money in us, which seemed like the only right thing to do with it,” said Hammond.
While you can make big gestures, such as taking a vacation, as a couple, you also can take small actions together as you heal from the consequences of financial infidelity.
For example, working on your monthly budget together can help keep both parties in the know. You also can set up weekly discussions to check in and update the budget. Additionally, being more open in general (not just about money) can help rebuild broken trust.
It takes two to heal a relationship
Financial infidelity can damage a relationship, but it doesn’t have to be a death sentence. Responding with accusations and anger might be natural at first, but over time, it’s important to use honest and open communication tactics.
Here are a few ways you can get started on the path to healing from financial infidelity:
- Budget together.
- Be open and honest about all purchases you make.
- Use a password management service, such as LastPass or 1Password, where you can both access the login information for all your financial accounts.
- Consider working with a marriage counselor to resolve deeper concerns.
Rebuilding trust requires that both parties are willing to move forward. If not, you might need to take steps to separate your finances. But if you’re willing to work together, you’ll be able to overcome the betrayal and distrust that come with financial infidelity.
If your spouse or partner also has been hiding debt from you, find out how to best manage that bombshell too.
*Name has been changed.
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1 Important Disclosures for Earnest.
To qualify, you must be a U.S. citizen or possess a 10-year (non-conditional) Permanent Resident Card, reside in a state Earnest lends in, and satisfy our minimum eligibility criteria. You may find more information on loan eligibility here: https://www.earnest.com/eligibility. Not all applicants will be approved for a loan, and not all applicants will qualify for the lowest rate. Approval and interest rate depend on the review of a complete application.
Earnest fixed rate loan rates range from 3.89% APR (with Auto Pay) to 7.89% APR (with Auto Pay). Variable rate loan rates range from 2.47% APR (with Auto Pay) to 6.97% APR (with Auto Pay). For variable rate loans, although the interest rate will vary after you are approved, the interest rate will never exceed 8.95% for loan terms 10 years or less. For loan terms of 10 years to 15 years, the interest rate will never exceed 9.95%. For loan terms over 15 years, the interest rate will never exceed 11.95% (the maximum rates for these loans). Earnest variable interest rate loans are based on a publicly available index, the one month London Interbank Offered Rate (LIBOR). Your rate will be calculated each month by adding a margin between 1.82% and 5.50% to the one month LIBOR. The rate will not increase more than once per month. Earnest rate ranges are current as of Month/Day/Year, and are subject to change based on market conditions and borrower eligibility.
Auto Pay discount: If you make monthly principal and interest payments by an automatic, monthly deduction from a savings or checking account, your rate will be reduced by one quarter of one percent (0.25%) for so long as you continue to make automatic, electronic monthly payments. This benefit is suspended during periods of deferment and forbearance.
The information provided on this page is updated as of 08/21/18. Earnest reserves the right to change, pause, or terminate product offerings at any time without notice. Earnest loans are originated by Earnest Operations LLC. California Finance Lender License 6054788. NMLS # 1204917. Earnest Operations LLC is located at 302 2nd Street, Suite 401N, San Francisco, CA 94107. Terms and Conditions apply. Visit https://www.earnest.com/terms-of-service, email us at firstname.lastname@example.org, or call 888-601-2801 for more information on ourstudent loan refinance product.
© 2018 Earnest LLC. All rights reserved. Earnest LLC and its subsidiaries, including Earnest Operations LLC, are not sponsored by or agencies of the United States of America.
2 Important Disclosures for Laurel Road.
Laurel Road Disclosures
APR stands for “Annual Percentage Rate.” Rates listed include a 0.25% EFT discount, for automatic payments made from a checking or savings account. Interest rates as of 11/8/2018. Rates subject to change.
Variable rate options consist of a range from 3.27% per year to 6.09% per year for a 5-year term, 4.64% per year to 6.14% per year for a 7-year term, 4.69% per year to 6.19% per year for a 10-year term, 4.94% per year to 6.44% per year for a 15-year term, or 5.19% per year to 6.69% per year for a 20-year term, with no origination fees. APR is subject to increase after consummation. The variable interest rate will change on the first day of every month (“Change Date”) if the Current Index changes. The variable interest rates are based on a Current Index, which is the 1-month London Interbank Offered Rate (LIBOR) (currency in US dollars), as published on The Wall Street Journal’s website. The variable interest rates and Annual Percentage Rate (APR) will increase or decrease when the 1-month LIBOR index changes. The variable interest rates are calculated by adding a margin ranging from 0.98% to 3.80% for the 5-year term loan, 2.35% to 3.85% for the 7-year term loan, 2.40% to 3.90% for the 10-year term loan, 2.65% to 4.15% for the 15-year term loan, and 2.90% to 4.40% for the 20-year term loan, respectively, to the 1-month LIBOR index published on the 25th day of each month immediately preceding each “Change Date,” as defined above, rounded to two decimal places, with no origination fees. If the 25th day of the month is not a business day or is a US federal holiday, the reference date will be the most recent date preceding the 25th day of the month that is a business day. The monthly payment for a sample $10,000 loan at a range of 3.27% per year to 6.09% per year for a 5-year term would be from $180.89 to $193.75. The monthly payment for a sample $10,000 loan at a range of 4.64% per year to 6.14% per year for a 7-year term would be from $139.65 to $146.76. The monthly payment for a sample $10,000 loan at a range of 4.69% per year to 6.19% per year for a 10-year term would be from $104.56 to $111.98. The monthly payment for a sample $10,000 loan at a range of 4.94% per year to 6.44% per year for a 15-year term would be from $78.77 to $86.78. The monthly payment for a sample $10,000 loan at a range of 5.19% per year to 6.69% per year for a 20-year term would be from $67.05 to $75.68.
However, if the borrower chooses to make monthly payments automatically by electronic funds transfer (EFT) from a bank account, the variable rate will decrease by 0.25%, and will increase back up to the regular variable interest rate described in the preceding paragraph if the borrower stops making (or we stop accepting) monthly payments automatically by EFT from the designated borrower’s bank account.
3 Important Disclosures for SoFi.
4 Important Disclosures for LendKey.
Refinancing via LendKey.com is only available for applicants with qualified private education loans from an eligible institution. Loans that were used for exam preparation classes, including, but not limited to, loans for LSAT, MCAT, GMAT, and GRE preparation, are not eligible for refinancing with a lender via LendKey.com. If you currently have any of these exam preparation loans, you should not include them in an application to refinance your student loans on this website. Applicants must be either U.S. citizens or Permanent Residents in an eligible state to qualify for a loan. Certain membership requirements (including the opening of a share account and any applicable association fees in connection with membership) may apply in the event that an applicant wishes to accept a loan offer from a credit union lender. Lenders participating on LendKey.com reserve the right to modify or discontinue the products, terms, and benefits offered on this website at any time without notice. LendKey Technologies, Inc. is not affiliated with, nor does it endorse, any educational institution.
5 Important Disclosures for CommonBond.
Offered terms are subject to change. Loans are offered by CommonBond Lending, LLC (NMLS # 1175900). If you are approved for a loan, the interest rate offered will depend on your credit profile, your application, the loan term selected and will be within the ranges of rates shown.
All Annual Percentage Rates (APRs) displayed assume borrowers enroll in auto pay and account for the 0.25% reduction in interest rate. All variable rates are based on a 1-month LIBOR assumption of 2.28% effective October 10, 2018.
6 Important Disclosures for Citizens Bank.
Citizens Bank Disclosures
|2.47% – 6.99%3||Undergrad & Graduate|
|2.46% – 6.97%1||Undergrad & Graduate|
|2.57% – 8.09%4||Undergrad & Graduate|
|3.02% – 6.44%2||Undergrad & Graduate|
|2.50% – 7.24%5||Undergrad & Graduate|
|2.79% – 8.39%6||Undergrad & Graduate|