Many newly married couples wonder how can it be possible that roughly half of all marriages end in divorce. A recent study has been released that may shed some light on what may be a contributing factors to these divorces. The Wall Street Journal dubs the problem ‘secret spending.’
Secret spending is described as a behavior in which one spouse conceals spending from the other spouse. This is shown in a recent study in which one in five adults admitted to hiding a $500 or greater purchase from their spouse. In addition, 46% of married people keep money secrets from their spouse. This could mean trouble down the road for those couples keeping money secrets and it could also lead to confusion or misinterpretation of finances if these couples do reach the property division stage of divorce.
A few ways secret spending can manifest is in secret credit cards, paying in cash or gift-card hoarding. These are all a way for one spouse to hide purchases from the other spouse. Marital property is typically split right down the middle in a property division but this equality is based on a valuation of a couples assets and liabilities. If one spouse does not disclose secret bank accounts or credit card spending it can seriously distort a couples assets and liabilities.
As thousands of Americans choose to hide money accumulation or spending from their spouse; it could spell trouble down the road. Honesty is almost always the best policy; and this rings true for married (or soon-to-be divorced) finances. If secret spending contributed to a divorce, the spouse who was omitted from this behavior should do everything they can do get to the bottom of the financial history. A forensic investigation of finances may be a great way to get started.
Source: Wall Street Journal, “Financial Infidelity: A Plague of Modern Marriage,” Nov. 2, 2015