Financial infidelity can take as big a toll on relationships as sexual infidelity and emotional dishonesty, according to new research.
Researchers define financial infidelity as “engaging in any financial behavior expected to be disapproved of by one’s romantic partner and intentionally failing to disclose the behavior.”
“Understanding financial infidelity is important because financial matters are one of the major sources of conflict within romantic couples and prior research has shown that keeping money-related secrets in relationships is a deal breaker,” said Boston College Assistant Professor of Marketing Dr. Hristina Nikolova.
For the study, researchers developed the Financial Infidelity (FI) Scale to measure consumers’ financial infidelity proneness, and examine how financial infidelity impacts shopping.
The team conducted lab and field studies, as well as analyzed bank account data collected in partnership with a couples’ money-management mobile app. App users who scored higher on the FI-Scale were more likely to hide their transactions and hide bank accounts from their partners, researchers found.
Masking spending by paying in cash, keeping a personal rather than a joint credit card, shipping in plain brown boxes, and burying an indulgent expenditure within the receipt from a big-box store are just some of the lengths to which people will go to hide their illicit spending, according to the study.
Although there is a lot of research on sexual infidelity in romantic relationships, there has been no research on financial infidelity, according to Nikolova.
“The lack of research on financial infidelity is surprising because financial infidelity is very common among couples,” she noted.
Past studies have shown that 41 percent of married participants who have joint finances with their partners admit to committing financial deceptions. Additionally, 75 percent reported financial deceit had negatively affected their relationships, according to the National Endowment for Financial Education.
“A few things that couples can do to prevent financial infidelity is to talk more, get on the same page regarding both joint and individual goals they might have, and also budget for some occasional indulgences along the way of achieving their long-term financial goals,” said Nikolova, whose research explores consumer psychology, especially how couples make decisions.
The study’s findings could be useful for retailers, who may want to adjust traditional marketing to serve shoppers attempting to keep purchases quiet, she added.
“We are entering the biggest holiday shopping season and there are very simple things that retailers can do to boost their sales, such as offering inconspicuous packaging without a brand name or the ability to pay with cash,” she said.
“Our research suggests that these options should appeal to consumers who are prone to engage in financial infidelity. Retailers should recognize that such shoppers do exist and they will probably sneak an expensive coat or a massage amidst the gift shopping they will do.”
Future research will look at how financial infidelity varies across different relationships — specifically, how it is shaped by the distribution of financial responsibility between partners, decision-making power, and financial communication within relationships, she concluded.
The study was published in the Journal of Consumer Research.
Source: Boston College