“I don’t know what to do, sir. She wants to file bankruptcy and I’m freaking out,” the young man said.
Fortunately, the financial guru had an easy fix: get rid of the car and negotiate with lenders on all the other debt to pay it off for “10 to 15 cents on the dollar.”
Ramsey’s bigger concern was the breach of trust and the future of their relationship.
Financial infidelity
Gabriel’s situation is far from rare. In fact, Ramsey says he has plenty of experience with similar situations. “In our world, we call this financial infidelity where a wife or a husband hides and lies about money to their spouse,” he explained. “It’s a breach of trust. Some say it’s the same or even worse than sexual infidelity.”
Among U.S. adults who have ever combined finances in a current or past relationship, 43% have committed at least one financial deception, according to a poll by the National Endowment for Financial Education (NEFE). The majority of those stated that the indiscretion affected the relationship in some way.
Put simply, the chances of your spouse or partner hiding parts of their financial lives is quite high. And it’s not limited to debt, partners may avoid revealing their true income, excess savings, spending habits like gambling, or windfalls from inheritances.
Sweeping money issues under the rug
Regardless of whether the financial infidelity is related to saving, spending or debt, discovering this breach of trust could be detrimental to a relationship.
“When you comingle finances in a relationship, you’re consenting to cooperation and transparency in your money management. Regardless of the severity of the act, financial infidelity can cause tremendous strain on couples — it leads to arguments, a breakdown of trust, and in some cases, separation or even divorce,” said Billy Hensley, Ph.D., president and CEO of NEFE.
Financial guru Ramit Sethi has shared examples of divorces that were ignited by financial infidelity.
A 2011 study suggested that opposites tend to attract when it comes to certain spending tendencies — tightwads and spendthrifts tend to marry each other and these “differences within a marriage predict conflict over finances, which in turn predicts diminished marital well-being.”
Ramsey told Gabriel that what his wife did was a "breach of trust" that some consider even worse than sexual infidelity. He advised him to go to marriage counselling at their church.
Vishesh Raisinghani is a financial journalist covering personal finance, investing and the global economy. He's also the founder of Sharpe Ascension Inc., a content marketing agency focused on investment firms. His work has appeared in Moneywise, Yahoo Finance!, Motley Fool, Seeking Alpha, Mergers & Acquisitions Magazine and Piggybank.
