5 Relationship Financial Red Flags

TW: This article contains content regarding financial abuse and bullying. This article is not meant to diagnose any conditions or behaviors. If you believe you are the victim of financial bullying or abuse, consider seeking the help of a marriage therapist, financial planner, and/or attorney. National Domestic Abuse Hotline: 800-799-7233

According to a 2021 “Couples and Money” Study done by Fidelity Investments, 44% of partners says they argue about money at least occasionally (this is highest among Gen-X’ers at 51%) (1). Inevitably, in every relationship you have someone who is more of a spender and someone who is more of a saver. It’s very difficult to find someone who aligns with you on financial matters 100% which is why couples often argue or find themselves in disagreements over how to spend money. Regardless of saving vs. spending habits, there are certain red flags everyone should watch out for. These 5 relationship financial red flags may serve as a warning that there could be an imbalance of power in your relationship and are maybe worth investigating. Always remember, every relationship is different so what may be normal to one couple may not be normal to another. Be sure to set appropriate boundaries and do what works for you. Never talked to your spouse or partner about finances? Download our FREE couples worksheet to help you get started and check out our post on how to talk to your spouse about money.

1. Denying Access to Financial Information

Often times we see this dynamic in partners where there is a significant imbalance of income and therefore, power. The most classic example of this is the wealthy gentleman that marries the young, pretty wife and becomes the sole provider. The husband may deny his new wife access to bank accounts, estate planning, investment accounts, and any other financial related documents. Oftentimes this denial is under the guise that the wife is better off not knowing or the information is “too complicated” for her to grasp. Either way, the wife is left in the dark without any knowledge as to how the couple’s finances are being handled and how much money is actually available. In the same 2021 Fidelity study, only 19% of women say they are the primary decision maker for long-term retirement and investment planning and 22% of women report having little to no involvement in retirement or long-term planning. This behavior acts as a relationship red flag because the husband is now able to act from a place of power and not only control the couple’s lifestyle, but also act independently from his wife.

Both spouses should always be on the same page about what assets each has brought into the relationship, before taking major steps such as marriage. Withholding financial information is a relationship financial red flag and can be a major cause of stress.

2. Excessive Monitoring of Spending

Monitoring both yours and your spouses finances can be a form of smart money management. In fact, keeping an open dialogue and tally of how your money is being spent as a couple can make for healthy conversations. However, when one spouse is monitoring the finances of the other in an intense or extreme way, this can become a form of financial bullying and a serious relationship red flag. Some of these extreme mannerisms include hacking into personal accounts, checking your spouses phone without his/her knowledge, or collecting receipts. This behavior indicates a lack of trust and respect for the other person not just as a partner but as an adult.

Instead of monitoring every penny, spouses should agree on what to share and when. For example, any purchase over a certain dollar amount has to be disclosed or better yet, discussed beforehand. Or perhaps you both agree to review your spending once a month to hold both parties accountable.

3. Preventing One Spouse From Making More Money

We live in a society that puts great emphasis on earning or earning potential. It used to be the case that the man in the relationship was responsible for being the breadwinner but in today’s society, with more women graduating from college and achieving higher education, women are earning more than ever. In fact, in 22 US cities, women earn equal to or more than their male counterparts. (2) With the earning potential gap closing, both men and women are now responsible for bringing home the bacon. However, what happens when one person isn’t comfortable making less than their spouse? A major relationship financial red flag can arise when one spouse prevents the other from making more money. This form of bullying can come through as very subtle manipulation such as asking the other spouse to take a step back from their career and focus on “other things”. Or perhaps, the tactic is far more aggressive where one spouse sabotages the other’s career. Preventing a spouse from making more money is also on the same level as preventing a spouse from working. Manipulating a spouse or partner into not working for selfish reasons (ie not wanting to be out earned) is a form of financial bullying and relationship financial red flag.

However, it’s worth noting that often times spouses will ask the other to take a step back from a career not because of wanting to stifle earning potential, but because of other reasons such as wanting to focus on the family or for health reasons. The latter is valid and may warrant a deeper conversation.

4. Employing a double standard

While I’m not a psychologist (or any kind of medical professional), I do know that often times people say or do things as a means of projecting their own feelings. For example, the spouse that is constantly accusing you of cheating (when your’e not) is probably cheating themselves. In the case of personal finances, the spouse who is accusing you of wild spending or financial irresponsibility, may be partaking in these very behaviors. It’s important to keep an eye out for the famous double standard. Some examples of the double standard include: demanding to see your partners receipts and not showing yours or creating difficult to follow and rigid spending rules for your spouse but not for yourself. No matter what couples work out as a financial plan, the rules have to apply to both parties to maintain not just fairness, but balance of power.

5. Making Major Purchases Without Consulting Each Other

If there was ever a relationship financial red flag that gives me the most stress, it’s this one. I’ve heard too many times absolutely wild stories of one person making an outlandish purchase without consulting the other. For example, my father once went out and bought a motorcycle without consulting my mother. He dropped a few thousand dollars in one afternoon without consulting her-a fact she has not let go to this day even almost 15 years later. Tune into any Gordon Ramsey Hotel Hell or Kitchen Nightmares and your’e bound to find the story of one spouse buying a restaurant or hotel without consulting their spouse-and with their retirement funds! Spouses should never make major purchases without consulting the other. How much each couple defines a “major purchase” will vary. For some couples, spending anything over $200 is a great offense while for others it’s $2,000. Regardless of the price tag, couples should get on the same page fast.

This behavior is a relationship financial red flag because the spouse spending the money is using the lack of communication as a way to control the relationship and assert dominance.

In some cases, the spender may genuinely not see anything wrong with this sort of behavior and a simple conversation can rectify the whole situation. Often if a partner is new to a relationship, he or she may not understand the dynamics of healthy financial behaviors.

Regardless, couples should decide an amount that is worth discussing should the situation arise to avoid any confusion.

Relationship financial red flags are never fun to uncover. Often times we may find ourselves as not just the victim but the perpetrator of these red flags. A spouse’s past poor spending habits or growing up financially unstable can have an impact on how we treat money today. Therefore, it’s important to recognize these triggers and have open and honest dialogues with our partners. If you’re on the receiving end, consider having a conversation with your spouse about your feelings towards the situation (if you feel you are in a safe enough relationship to do so). If you find yourself acting as the bully or red flag perpetrator, perhaps take a step back and evaluate what has caused you to establish this behavior so you can be better for your spouse in the future.

Sources:

(1) 2021 Couples and Money Study. Fidelity Investments. https://www.fidelity.com/bin-public/060_www_fidelity_com/documents/about-fidelity/Fidelity-Couples-and-Money-Fact-Sheet-2021.pdf

(2) Young Women Are Out Earning Young Men in Several US Cities. Pewter Research Center. Richard Fry. March 28, 2022. https://www.pewresearch.org/fact-tank/2022/03/28/young-women-are-out-earning-young-men-in-several-u-s-cities/