While whispers of marital infidelity can send gossips into a tizzy and couples into therapy or attorney’s offices, financial infidelity among couples has been largely unexamined. Hristina Nikolova, a Carroll School of Management marketing professor, has set out to understand financial infidelity among married couples and create a scale that measures the likelihood that a consumer will engage in financial infidelity.

Nikolova is a co-author of a study titled “Love, Lies, and Money: Financial Infidelity in Romantic Relationships,” appearing in the Journal of Consumer Research (and now available at the journal’s website). The professor said she and her three co-authors were surprised at the dearth of research around financial infidelity, given how common it is. In a previous study, 41 percent of married participants admitted to committing financial deception, and 75 percent of those couples said the deceit negatively affected their relationships.

“Understanding financial infidelity is important because financial matters are one of the major sources of conflict within romantic couples,” said Nikolova, who is the Diane Harkins Coughlin and Christopher J. Coughlin Sesquicentennial Assistant Professor.

What constitutes financial infidelity in the first place?

In the study, the authors—including Notre Dame’s Emily Garbinsky, University College London’s Joe Gladstone, and Indiana University’s Jenny Olson—provide a two-pronged definition. They say infidelity occurs when someone engages in financial behavior that they expect their partner will disapprove of, and then conceals the behavior from their spouse. Examples include hiding receipts for excessive spending from one’s partner, opening new credit cards and accumulating debt without telling one’s partner, and hiding income and savings from one’s partner.

The research team recruited 150 married people to first identify what behaviors couples would label as financial infidelity. They categorized the responses into six areas: hiding or lying about spending; hiding or lying about savings (e.g., amount of savings, presence of account); creating undisclosed debt; giving money to others; undisclosed gambling; and hiding or lying about income (e.g., source or amount, additional income received).

Using the responses from these interviews, the research team developed a Financial Infidelity Scale (FI-Scale) that measured how prone a consumer would be to commit financial infidelity. The scale includes statements such as “I do not want my partner reading my purchase receipts, in case s/he disapproves of my spending,” and “Sometimes I avoid telling my partner how much money I spend on gifts to avoid confrontation.” The researchers then tested this scale through various studies in which couples indicated how they would behave in different scenarios. 

That $400 Jacket from Amazon

For example, in one scenario study participants were told to imagine going to a new, upscale restaurant with friends, but their spouse would be unable to join. The dinner bill would likely be three times higher than they usually pay. They were given a choice of paying the bill with a joint card that has a 0 percent promotional interest rate, or with their personal card to which their spouse doesn’t have access and has an 18 percent interest rate.

In another scenario, study participants considered buying a $400 jacket from Amazon. The price was four times more than they would usually spend on a jacket, and the couple had previously decided to save money for an upcoming purchase, so their partner would most likely disapprove of the purchase. If the participants chose to go ahead with the purchase, they could choose between the jacket’s own packaging that makes the jacket visible, or a generic Amazon box. In yet another scenario, participants were given the choice of buying cookware at a specialty store, which would be difficult to hide on a joint credit card receipt, or at the grocery store where they could hide the expense in a larger bill with other items.

The results showed that consumers with higher FI-Scale scores are more likely to engage in “financially imprudent behaviors anticipated to raise spousal disapproval,” said Nikolova, noting that such people exhibit “stronger preferences for secretive purchase options.”

Some of the telltale signs include using cash rather than a credit card “to avoid leaving a trail of one’s spending, using personal rather than joint credit cards even at the expense of paying a higher interest rate, choosing unmarked packaging that does not reveal the product brand, and shopping at inconspicuous generic stores rather than those specialty stores,” Nikolova added. “Each of the choices is directly relevant to marketers.”

One takeaway is that businesses should be aware of consumer segments that are highly prone to financial infidelity. For example, Nikolova pointed out that businesses are increasingly going cash-free, and this trend may hurt retail segments like beauty salons, where some consumers might be inclined to use cash to disguise their $150 hair stylings and treatments.

So while couples may want to take a close look at how open they are with their money for the sake of their marriage, companies should also plan for those consumers who prefer to hide their spending habits.

“The significant impact of financial infidelity on the marketing-relevant consumption behaviors was surprising to us,” said Nikolova. “This suggests that financial infidelity is important not only for consumers and their personal and relationship well-being, but also for marketers and their bottom lines.”

Rebecca Delaney is a freelance writer and editor in Massachusetts.