With Money. Cheating. WHEN A MARRIAGE is rocked. How financial infidelity could wreck your relationship - and open talks about spending can save it.

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2 Cheating With Money How financial infidelity could wreck your relationship - and open talks about spending can save it. BY ANDREA PHOTOGRAPHY DOWNING PECK BY CADE MARTIN WHEN A MARRIAGE is rocked by financial infidelity, the betrayal can drive a dagger through the relationship as damaging as any other breach of trust. An Army veteran who served during Operation Desert Storm experienced that painful truth when his name was attached to nearly $250,000 in credit card debt and loans, a total that was partially revealed when he finally demanded his wife update him on the status oftheir finances. "When 1finally saw the light, it was an avalanche," says the member, whose name is being withheld for legal protection. "Everything fell on me. When 1 realized the depth of the betrayal, that's when it was over. Not more than a couple of days after that 1 said, 'I love you, but our marriage is over.''' One in three adults who have combined their finances admit to committing financial infidelity against their partner, a 2014 survey for the National WINTER 2014 USAA 25

3 Endowment for Financial Education shows. Those episodes include concealing a purchase, bank account, statement, bill or cash from the other spouse. Thirteen percent of respondents admitted to actually lying about their finances, earnings or debt. "It is a very big problem and also sometimes causes regular infidelity," says Bonnie Eaker Weil, author of "Financial Infidelity: Seven Steps to Conquering the :111 Relationship Wrecker." "It is a form of cheating so subtle many people don't even know they are doing it. It's not so much the secret, but the deceit behind the secret that contaminates and corrodes intimacy." Utah State University assistant professor Jeffrey Dew, whose research concentration is family relationships and money, says money arguments are a "potent source of problems" and the top predictor of divorce. "If a spouse sees signs of financial infidelity, they need to address it because there are going to be problems, particularly if it is a behavior where a spouse is destroying their finances," he says. Looking back, the Army veteran says he must accept an equal share of the blame for the blizzard offinancial missteps that ultimately doomed his marriage. Among his biggest mistakes was agreeing to the failed plan to reduce the couple's revolving debt, which included having a relative co-sign on a loan for more than $100,000. "There was nothing more nefarious going on than (my wife) wanting to preserve a particular lifestyle, and I wasn't providing it so she made it happen," says the USAA member. "There was no second life going on. No house in the Hamptons that I wasn't aware of. The fact of the matter is I share in the blame. I knew there was debt. I knew we were living above our means. There was infidelity because when I attempted to ascertain how far under we were going, it was hidden from me." Because his wife was a financial professional, he says he happily delegated bill-paying duties to her and remained "blissfully ignorant" and uninvolved in their finances. Because money was a "sensitive topic," he says they did not routinely discuss the family's bottom line. Why Financial Infidelity Occurs For many couples, money secrets can be as innocent as lying about the price of a new golf club or pretending newly purchasedjeans have been in your closet for months. But those secrets point to a fundamental failure to communicate. "How you handle money in your relationship is a direct reflection of the closeness you have inside that relationship," says financial advisor Scott Palmer, who with his wife, Bethany, lectures as The Money Couple. "It's a good thermometer." In his first marriage, another USAA member says he and his wife maintained separate financial lives, complete with separate checking accounts and no openness about their spending. "When the issue came up, it was always, 'Why are you in my business? Why can't I do this?'" he says. After he remarried two years ago, the member knew there needed to be financial transparency and accountability in his new relationship. "It's about communication," he says. "If I can speak to my spouse beforehand and get on the same page, then we don't have to hide things from one another. It reduces the stress in the relationship." 26 USAA WINTER

4 While living eparate financial lives is one cause of financial infidelity, allowing one partner to exert total control over finances and pending also can breed dishonesty. Lack of planning for major expenses such as retirement or a child's education also can cause one partner to act unilaterally and secretly stash cash. For military familie control of finances may bounce back and forth between husband and wife if the service member frequently deploy, etting the stage for clashes. "The conflict can come when the busy, inattentive spou e wants to get involved or questions decisions that were made," says USAA member Cherie Stueve, an Accredited Financial Coun elor and military spouse. "Couples really do need to be involved in routine conversations about money and finances, budgeting and goals." The Palmers wrote "The 5 Money Personalities: Speaking the Same Love and Money Language" and created a test to help determine someone's primary and secondary money personalities. One person in a relationship might be more of a saver while the other is a spender; one might enjoy taking risks while the other seeks security. Combining those different personalities can cause conflict. Understanding your partner's money personality can be key to helping avoid financial infidelity and money battles. "There's no right or wrong money Warning Signs of Secret Spending If one of these examples describes your relationship, it could be time for you and your partner to schedule a money talk. - Your partner hides purchases or becomes defensive or overly sensitive when talking about spending. - Your partner shows you only partial credit card statements or bank account information withholds accounts. or access to online - Your partner is reluctant to share details about tax returns, loan documents or income. - You find receipts or credit card charges for purchases you don't recognize or your partner conceals a credit card account from you. WINTER 2014 USAA 27

5 _ """"---- personality," Scott Palmer explains. "It isjust who we are. When you understand your money personality and the way you look at money, it helps you understand every speed bump you've had in your relationship when it comes to money." The National Endowment for Financial Education offers a Life Values Quiz (at smartaboutmoney.org), which is another way to discover the values underlying your and your spouse's spending habits and money decisions. If your partner has a need to feel financially secure, for example, while you value spending money on shared experiences with family and friends, your spending plan should reflect both sets of values. "Once you know where your partner is coming from, you can go about compromising," says Patricia Seaman, the organization's senior director. Seaman adds that people who hide purchases or debt from their spouse often are ashamed of what they're doing but are afraid of their partner's reaction if they were to come clean. "There's a feeling that it is easier to lie than to own up to what they are doing and take the consequences." The Fallout When financial infidelity occurs in a relationship, financial advisor Bethany Palmer says both people need to examine the roots of the problem. "Alot of times you want to blame the person who is committing the infidelity - and yes, there is room for that - but if someone is committing financial infidelity, there is probably a reason why they are feeling they can't be very honest with [their spouse] about money," she says. Fortunately, couples can overcome the damage to their relationship. "You can earn trust back very quickly after financial infidelity because money impacts us every day, all the time," she says. "It is important to be open and honest and transparent." After his divorce, the Army veteran began digging out from his financial black hole. He declared Chapter 7 bankruptcy, which enabled him to discharge $91,000 in revolving debt from seven credit cards in his name. He was able to keep two credit cards by paying off the balances. He also has paid off $40,000 of the loan that was co-signed by his relative. Most importantly, he began keeping track of his finances with laser precision, taking steps to repair his credit, monitoring his credit rating, funding his 401(k) up to the company match and saving for major purchases. Looking back, he says maturity was the necessary ingredient he lacked when he left the Army at age 24 and got married soon after. In his current relationship, there are no financial secrets. "My advice is to share (financial information)," he says. "As complicated as finances can be and as unpleasant as they can be, split the load in such a way that no one person is overwhelmed, but conversely no one person is tempted to hide something." -_...,-- Get more money management tips at usaa.corri/ advice Six-Step Plan for Harmony STEP 1Understand how you and your partner view money. Are you a spender married to a saver? STEP 2 Make a "money talk" part of your monthly routine. STEP 3 Work at I;>eingnonjudgmental about your spouse's money decisions. STEP 4 Marry your budget to money goals so that you and your spouse reap rewards for controlling spending. STEP 5 Allocate an allowance you and your spouse may spend guilt-free. STEP 6 Share access to all accounts and records to keep your finances transparent, even if one person handles day-to-day billpaying and investments. 28 USAA WINTER 2014