The science of couples cheating with their money

One in three people commit "financial infidelity", with potentially toxic consequences for their relationships, according to a study co-led by UCL which is thought to be the first to investigate the concept.

Romantic relationships are built on trust, but partners are not always honest about their financial behaviour - they often hide spending, debt, and savings from one another.

A team of academics developed a scale that measures individuals’ proneness to financial infidelity in relationships, which can predict how likely someone is to hide spending from a partner. Those who score higher on the 12-question Financial Infidelity (FI) Scale are more likely to lie about or hide spending or savings, keep debt a secret or have undisclosed gambling habits.

For the paper, Love, Lies and Money: Financial Infidelity in Romantic Relationships , academics from UCL, University of Notre Dame, Boston College and Indiana University identified financial infidelity as behaviour comprised of two components: engaging in a financial behaviour expected to elicit disapproval from one’s partner plus an intentional failure to disclose the behaviour.

The FI Scale can predict consumers’ likelihood of engaging in financial behaviours expected to elicit partner disapproval, which can negatively impact a relationship as much as sexual infidelity, and is often cited as a source of marital conflict and stress.

Co-author Dr Joe Gladstone (UCL School of Management) said: "The findings indicate that financial infidelity is surprisingly common, and can be influential in terms of both relationship quality and in changing how people spend their money."

Secondary data from a European bank suggested that 35.7% of people engaged in at least one type of financial infidelity. The data was drawn from 12,743 people across 13 countries.

The researchers found that proneness to engage in financial infidelity is influenced by both the individual and their current relationship, with the trait most likely to remain stable within relationships but fluctuate from one to the next.

The scale and definition can be used by relationship therapists, financial service providers and advisors to predict couple and consumer behaviour, and hopefully to educate individuals deemed most at risk.

The researchers grouped financial infidelity into six categories: spending, saving, debts, gift-giving, gambling and income, with each category containing two questions to measure people’s likelihood of engaging in the behaviour "I would not tell my partner if I lost money gambling" and "I prefer to keep information about my income private from my partner."

As part of the research, the team analysed real bank account data collected in partnership with a couples’ money-management mobile app, showing that those higher in their scale were more likely to hide their transactions and hide bank accounts from their partner.

Policymakers and financial companies can use the findings to play a role in mitigating financial infidelity. Consumers scoring higher often show a preference for personal over joint credit cards, using cash, concealing product packaging and shopping at generic shops over speciality ones. For example, incentivising joint credit cards over single ones or cash can encourage increased transparency in consumer purchasing behaviour and minimise consumers’ opportunities to commit financial infidelity.

Whilst taking action to mitigate financial infidelity, governments and companies should also take into account consumers committing this to escape violence or protect their safety, such as those in abusive or controlling relationships.