5 Red Flags in Couples’ Finances, According to Forensic Accountants

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Money problems can harm any relationship — even good ones. Sometimes, the way you or your partner handles money can reveal bigger issues, like not trusting each other, a lack of clear communication or even having different financial priorities.

If you spot these red flags early, you can fix them. Talking about money openly can help you and your partner work better together in every part of your life. You’ll get better at dealing with money and also strengthen your relationship. 

GOBankingRates spoke with forensic accountants to find out what the red flags are in couples’ finances — and how to navigate them.

Also see three habits for easier money conversations with your partner.

One Spouse Has a Personal Account That the Other Spouse Is Unaware Of

Financial transparency is a cornerstone of trust in any relationship. When one partner maintains a secret personal account, it can raise serious concerns about their commitment to financial honesty. This hidden account might be used to conceal spending habits, save money without their partner’s knowledge or even prepare for a potential separation.

“Although I advocate for a couple to have separate accounts as well as a joint account, a red flag would be for a spouse to have a personal account that the other spouse was unaware of,” said forensic accountant and business valuation expert Mark S. Gottlieb, CPA, with MSG CPA. “This lack of transparency is a big red flag.”

At a minimum, a secret account suggests that one spouse feels the need to maintain financial independence or is unwilling to fully commit to shared financial goals. It could also be a sign of a more serious issue, such as hidden debt, infidelity or addiction.

If you discover your partner has a hidden account, it’s important to approach the conversation calmly and without accusation. Try to understand their motivations and work together to establish a system of financial transparency that both partners are comfortable with.

One Partner Has Authority Over Finances Without the Input of the Other Partner

Financial equality is an important aspect of a healthy relationship. When one partner assumes complete control over the couple’s finances, making unilateral decisions without consulting their spouse, it can lead to an unhealthy power dynamic and resentment. This behavior may be a sign of financial abuse, where one partner uses money as a means of control or manipulation.

“Regardless of income status (which partner makes more, or even if one partner does not work outside the home), both parties should have a sound knowledge of the couple’s finances,” said Katie Gilden, CPA, chief operating officer at Fiske & Company. “Oftentimes one party is tasked with handling finances, but both parties should have the same knowledge and know-how even if one of them runs the ‘day-to-day.’ It should be viewed as an equal partnership, regardless of contribution dollars.”

A one-sided approach to financial management can leave the other partner feeling powerless and uninformed about their own financial situation. It may also prevent them from developing important financial skills and knowledge, potentially leaving them vulnerable if the relationship ends or their partner becomes incapacitated.

“When one spouse assumes the responsibility of paying the monthly bills, the other person should always be aware of when these are being paid, which account it’s being paid from and the total of each bill,” Gottlieb said.

Couples should strive for a more balanced approach to financial management. This might involve regular financial meetings where both partners review their finances together, make joint decisions on major expenses and set shared financial goals. 

One Partner Is Secretive About How They Made an Expensive Purchase

You should be seriously concerned if your spouse becomes evasive about how they funded a big expense. 

“It is not uncommon that one spouse is less involved in the family’s finances than the other,” said Rachel Needham Gillilan, CPA, manager of fraud and forensic services at Red Bike Advisors. “However, if your spouse has suddenly traded the family mini-van in for a paid-in-full Ferrari, without an explanation on where the money came from to buy this car, this could be a red flag (for many reasons).”

This kind of secrecy can erode the trust in your relationship. 

“For example, leaving shopping bags in car, or having Amazon/online shopping deliveries made to the office rather than home to avoid your partner noticing large purchases,” Gilden said. “I’ve seen spouses who pay for things like clothing, luxury handbags and even Botox in cash to avoid their partner’s scrutiny.”

If your partner won’t discuss a major purchase, approach the conversation with curiosity rather than accusation. Emphasize the importance of transparency in your shared financial life. If the secrecy persists, it may be beneficial to seek the help of a financial counselor or therapist to address underlying issues and establish healthier financial communication patterns.

Changes in Spending Habits

Sudden or unexplained changes in spending habits can be a cause for concern in a relationship. This might manifest as one partner suddenly becoming extremely frugal or, conversely, engaging in unusually lavish spending. This might indicate financial stress, a change in their income, or even a gambling or shopping addiction.

“We are creatures of habit, and when these habits change, it’s usually due to a change in attitude,” Gottlieb said. “Accruing credit card debt, especially during a period when interest rates are very high, could be catastrophic financially for a couple.”

A change in spending habits isn’t necessarily negative. One partner might be cutting back on expenses to save for a surprise gift. Regular financial check-ins can help you and your partner to stay on the same page and address any concerns before they become major issues. If you notice a change in your partner’s spending, there may be a reasonable explanation, or it could be an opportunity to reassess your financial goals as a couple.

One Partner Uses Mainly Cash for Purchases

Some people prefer the tangibility of cash or find it helps them budget better, but an abrupt change to cash-only spending may indicate an attempt to hide expenses or income from their partner. Using cash might mean one partner is deliberately concealing their true spending habits or financial situation from the other. 

“Many people think cash is untraceable (spoiler — it’s not totally) and use cash often if they are either trying to conceal how the cash was earned or conceal certain purchases using cash,” Gillilan said. “Some individuals prefer to earn income in cash and deliberately choose not to report this cash to the Internal Revenue Service on their annual tax return. This could be considered tax evasion and can carry hefty fines and/or jail time. In some circumstances, both spouses may be liable for these actions even if the other spouse was unaware. Consult a forensic accountant if you’re unsure.”

If you notice your partner suddenly favoring cash transactions, it’s worth having a conversation about why. There may be a legitimate reason. Maybe they’re just trying to curb their spending. But if their explanation doesn’t add up or they become defensive, it might be time to dig deeper and address potential trust issues.

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