Excerpt: 'Financial Infidelity'

Oct. 21, 2008 — -- Therapist and author Bonnie Eaker Weil penned "Financial Infidelity: Seven Steps to Conquering the #1 Relationship Wrecker," a book about how money can influence relationships. Read an excerpt below.

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Are You Prone to Magical Thinking?

At some point or another, almost all of us have used magical thinking to give us the confidence to go on when a relationship hits a rough patch. Most people are able to move through this stage by taking risks to confront their partners. They realize that heated discussions, arguments, even passionate fights are part of the process of negotiating the differences between two individuals. They are able to set aside the fear of abandonment and be courageous instead of comfortable, proactive instead of defensive. They realize that when two people become entrenched in a behavior pattern, one of them must change in order to break the pattern. There are no "magical solutions" (except for those people still in the honeymoon stage).

When it comes to money, most adults pride themselves on their practical approach to handling their own finances. But when it comes to cooperatively managing shared resources in an intimate relationship, I have seen even the most savvy financial managers—individuals who handle negotiations, investments, and expenditures of huge sums of money in their careers—engage in magical thinking, rather than initiate discussions about money with their partners.

To find out if you practice magical thinking to ease concerns about money, ask yourself the following questions:

Are you a gambler?

Do you expect to win if you buy a lottery ticket?

Do you believe it's just as easy to find a rich spouse as a poor spouse?

Do you believe you can influence your financial situation, or do you think that things will eventually "just work out"?

Do you avoid discussions about money?

Do you feel financially secure, even if you don't have money put away?

Do you still feel nervous about your future, even though you are financially prepared?

Do you believe that appearances let you know whether a person you are dating does or doesn't have money?

Do you find yourself daydreaming about a sudden scenario that will change your financial picture (for better or worse)?

Do you believe that if a bank is willing to give you a loan, you are capable of repaying it?

Do you pick pennies up from the sidewalk because you believe you will be able to save for a vacation that way?

Do you believe a college degree is a guarantee of a good income?

Do you believe that as long as you are working at a responsible job you can afford a new car or other major purchase, regardless of your balance sheet?

Do you believe colleges will give you or your children significant financial aid because you have large amounts of debt?

Do you believe bankruptcy is a way to get out from under your personal debt with no real consequences?

Do you believe it's okay to carry high personal debt because "everyone else does"?

Do you believe that if you don't open a bill, you don't have to pay it that month?

Are you late with bills, even though you have the money to pay them on time?

Do you believe that you should always stretch yourself to have the best house, car, or personal technology available?

Do you purchase status items because they make you feel "rich"?

Do you put high-ticket items you really can't afford on your credit card because it's not like spending "real" money?

Are you "keeping up with the Joneses" even if it puts you in debt?

Choosing to ignore the plain facts about the ways in which you avoid the topics of debt, spending, and saving can be just as detrimental to a relationship as engaging in magical thinking in order to deny or ignore emotional or physical red flags.

Power and Risk

A study published in the July/August 2006 issue of the European Journal of Social Psychology suggests that powerful people are more likely to take risks. The authors of the study theorized that high-powered individuals often benefit when they make choices that are considered high-risk. The more power these people believe they have, the more risk they are willing to take. However, this behavior can set up an incredibly damaging dynamic. Consider, for instance, the number of scandals that regularly arise involving high-powered executives, wealthy stock-market investors, or political figures. I'm quite sure that former president Bill Clinton never believed he would get caught when he embarked on an affair with a White House intern.

Another psychological effect of constant risk taking is the impact the adrenaline rush that such behavior can provide. These thrill seekers "self-medicate," and I see in my practice their self-destruction. Individuals who are prone to addictive behavior are in danger of falling into a damaging cycle where the rush of taking the risk becomes all the reward they need. Whether or not their risky behavior is beneficial becomes secondary. And the more risks they take, the more powerful they may feel.

This type of power dynamic in a relationship can have a significant impact on a couple's shared finances. When faced with a crisis, risk takers, who generally take a "don't worry, don't plan" approach to money management, may make rash decisions that result in emotional and financial catastrophes for them and/or their partners. According to Brett N. Steenbarger, clinical psychologist and author of Enhancing Trader Performance, "When humans experience a powerful emotional event (and a big gain or loss in our wealth, even if it is on paper, is one) our brains don't work the way they do when we're calm. During times like these the analytical part of the brain shuts down...." You need a plan to limit risk, especially at these times when your brain fails you.

To help you understand how much financial risk is present in your relationship, ask yourself these questions:

1. Do you have a plan in case of a financial emergency, such as loss of a job or a medical crisis?

2. Are there a lot of high-risk stocks in your portfolio?

3. Do you own your home?

4. Do you have multiple credit cards with high interest rates?

5. Can you easily make the minimum monthly payments on your credit cards?

6. Do you have an adjustable rate mortgage?

7. Do you have six months' living expenses set aside in case of emergency?

8. Have you ever had to take a loan from friends or family to "bail you out" of a bad financial situation?

9. Do you pay yourself first by putting money in savings before paying your bills?

If your answers to the even-numbered questions are mostly "yes" and your answers to the odd-numbered questions are mostly "no," you are living with a very high level of risk in your relationship. If the reverse is true (the even-numbered questions are mostly "no" and the odds are mostly "yes"), then you have an extremely conservative approach to financial risk.

In order to successfully navigate the power struggles that occur around money, it is important to know how comfortable both you and you partner are with financial risk. It is also important to consider your relationship's power dynamic and your personal relationship to money and power. Acknowledging these different perspectives can help you to understand where your partner is coming from when you find that you are locked in a power struggle about money.

Financial Infidelity as an Addiction

When I am talking to some of the couples I counsel about their feelings when beginning an affair, they often use descriptions like "sexual chemistry" and "irresistible attraction." Some even compare their craving for their lover to an addiction. They can't get enough. They feel high. Their descriptions verge on sounding like passages from a romance novel. And yet, there's some validity to their clichés. In fact, studies have shown that certain repetitive or addictive behaviors both are caused by and contribute to fluctuations in the mood-stimulating neurotransmitters in our brains.

The neurotransmitters we talk about above—dopamine, serotonin, norepinephrine, and epinephrine—and hormones such as oxytocin and vasopressin are associated with depression and euphoria. If the levels of these important brain chemicals are imbalanced, an individual is likely to feel depressed, and may behave in ways to stimulate—or simulate—the feelings induced naturally by the release of these neurotransmitters in the brain. Patients I counsel are often seeking to duplicate the euphoric feelings of "falling in love." They are trying to re-create their feelings with adulterous affairs, out-of-control shopping, or risk-taking behaviors like gambling. The satisfaction they feel from this "quick fix" can set them up for unrealistic expectations for an ongoing state of energy, arousal, and euphoria.

In counseling couples where one individual seems compelled to seek out hurtful affairs or commit financial infidelity, even as they express remorse over the effect their behavior is having on their relationship, I will often explore whether, for them, the thrill of pursuit, conquest, and the fulfillment of their fantasies is actually indicative of an addiction. In these cases, or in those where there is a family history of addictive behavior such as alcoholism or drug abuse, adultery, or gambling, analyzing the levels of the key neurotransmitter associated with depression and addiction can give me insight into their situation. Many patients I see have a constellation of these addictive behaviors. They may drink and gamble and engage in extramarital affairs. They often tell me that they have tried to stop all of these behaviors on their own, but find themselves slipping back into them or even adding new damaging behaviors. I tell these patients that because it is very difficult to exhibit self-control when dealing with addictive-type behaviors, it is important that they do not take on more than one self-control challenge at a time. And in the meantime we can manipulate, even balance their neurotransmitter levels (which are initially determined by heredity) through supplements, medication, biofeedback, or talk therapy.

Just as an individual may turn to an illicit love affair to provide the biochemical feelings of connection and experience the thrill of a new romance, over and over again, so, too, they may turn to risky financial behavior for stimulation. Even if they stop the love affair, they may not have the self-control to stop the risky financial behavior.The reason is that the behaviors that stimulate these feelings can easily become addictive. For instance, for any addict, the choice to self-medicate in any number of ways—with alchohol, medications, sex, or money—can begin with a desire to relieve stress or mute depression. The addiction then progresses to a preoccupation with where their next "fix" will come from, and often involves a strong desire to create rituals around obtaining the "high." This preoccupation becomes a compulsion—to use drugs or alcohol, or to have sex, or to shop—followed by depression and despair as the effects wear off, leading to the start of the cycle all over again.

Joseph Frascella, director of the Division of Clinical Neuroscience at the National Institute on Drug Abuse (NIDA), defines addiction as "repetitive behaviors in the face of negative consequences, the desire to continue something you know is bad for you." The three most common types of "habits" that can slide into "addictive behavior" that I see in relation to financial infidelity are gambling, binge spending, and hoarding.Two million adults are thought to be pathological gamblers. Another four to eight million are considered "problem" gamblers. A Stanford University study identifies one in twenty Americans as compulsive shoppers. The individuals that are prone to gambling and binge spending may also seek to take risks in a socially appropriate way by working in a high-stress, thrill-intensive job such as a Wall Street trader, a surgeon, or a courtroom attorney. The buzz from their victories is usually immediately followed by a new stressful situation and a chance to professionally "gamble" so that they can triumph yet again.Other people may exhibit financial infidelity as a result of transference. In psychological terms, transference refers to the redirection of feelings, fears, or emotions onto a new object or situation.