Watch Out for These Financial Infidelity “Red Flags” in Your Marriage

Mindy:
Welcome to the BiggerPockets Money podcast, where we interview Tracy Coenen and talk about forensic accounting and financial infidelity.
Hello, hello, hello. My name is Mindy Jensen and joining me today is Amanda Wolfe, the She-Wolf of Wall Street. Amanda, what’s up?

Amanda:
Hey. Hey, how are you?

Mindy:
I’m so happy to see you today.

Amanda:
Yeah, thanks for having me. I’m really, really excited about this episode.

Mindy:
This episode is so much fun. I know the whole forensic accounting and financial infidelity sounds like maybe that’s not exciting. This is a super fun show. Wait for it.
Amanda and I are here to make financial independence less scary, less just for somebody else, to introduce you to every money story because we truly believe financial freedom is attainable for everyone, no matter when or where you are starting.

Amanda:
That’s right. Whether you want to retire early and travel the world, go on to make big-time investments in assets like real estate or start your own business, we’ll help you reach your financial goals and get money out of the way so you can launch yourself towards your dreams.

Mindy:
Amanda, I don’t know if you know this, but we have a new segment on the show called The Money Moment where we share a money hack tip or trick to help you on your financial journey. Today’s money moment is use your raise to save more. Rather than just letting your new raise go straight to your checking account, think about increasing your 401(k) or Roth contributions. You can also automate your savings and have those extra dollars go into a separate account.
Do you have a money tip for us? Email [email protected].
All right. Today we’re talking to Tracy Coenen. I am super excited because this is a really interesting show. She has some fascinating tips for how to ferret out financial infidelity, potential financial infidelity, and how to determine what’s what.
Tracy Coenen is a forensic accountant who has over two decades of experience in accounting and investigations. Her goal is to help 1,000 women every year have better financial outcomes in their divorces. Tracy, welcome to the BiggerPockets Money podcast. I am so excited to talk to you today.

Tracy:
Hey, not as excited as I am to talk to you and Amanda.

Mindy:
We’re going to have an out excited the other person contest. I met you at FinCon last year, and I have wanted to have you on the show. I think forensic accounting is exciting. I think what you do is, exciting isn’t the right word because I’m sorry that there’s a need for you to have a job. I wish that everybody was just super honest all the time and everybody was fair and square forever, but unfortunately they’re not. Because not everybody knows what I’m talking about, Tracy, can you start us off and give us a little bit of history about what a forensic accountant is and what your career has looked like?

Tracy:
As a forensic accountant, I find money. I do fraud investigations. Some of that is on the corporate side where I am going into companies that have executives who are stealing money, hiding money, manipulating financial records. I’m trying to figure out what happened to the money, who was involved. Yeah, I know, exciting stuff.
Some of what I do is on the personal side. That involves the divorce work and other personal manners where someone is engaging in some money shenanigans. I got started as a forensic accountant more than 25 years ago. As an undergraduate, I was a criminology major. My plan was to become a prison warden. My sophomore year of the criminology program, I took a class called Financial Crime Investigation. It was an elective that was only offered once in a while. I thought it’s sounded pretty cool. I took it. I was hooked. I was off to the races to make sure that I could get a CPA license and all that kind of stuff.

Amanda:
I’m sitting here mouth open. That is so interesting and what an interesting way to have gotten to this point too. To go from prison warden goals to this, it tracks. It’s so interesting. Forensic accounting, I feel like it sounds very hacker meets Mission Impossible. Can you tell us a little bit about what your job entails, what your day-to-day looks like?

Tracy:
My day-to-day is super busy. I just spend a lot of time literally going through a lot of data, bank statements, credit card statements, getting those transactions off the statements into a database and then analyzing them. Crunching the numbers, sorting, totaling, subtotaling, doing all sorts of things, looking for patterns, looking for things that don’t look right. Some of it is intuition-based where my gut just says, “Something over here isn’t quite right.” Some of it’s very, very fact-based where I see something that just opens it all up, but I go down a lot of rabbit holes. It’s a lot of data work, which doesn’t sound exciting to people who maybe aren’t numbers people, but for me, it’s putting that puzzle together and it’s really fun.

Mindy:
I think it’s fascinating that people think that they won’t get caught. Everything leaves a paper trail.

Tracy:
Well, that’s just exactly it. Mindy, we met last year, as you said, at FinCon where I was talking about the Divorce Money Guide, which is the program that I put together to help people look at their own numbers in their divorces because 95% of people don’t have situations that require forensic accountants. They don’t need to spend thousands of dollars on someone like me. Of course, the question that I always get is, “Well, how is someone really going to find this on their own? It’s complicated.” Now, in 95% of divorces, it’s not complicated. They don’t cover their tracks very well.
One of the primary reasons that the spouse who’s doing funny things with the money doesn’t cover their tracks well is because they know that their spouse isn’t looking. We often have one spouse who just is hands-off with the finances. I don’t want people to be ashamed if that’s them because we divide and conquer. You take care of this in the household. I take care of that. If they know their spouse is hands-off about the money, they don’t make any effort to cover up what they’re doing.

Mindy:
Which makes it easy to find.

Tracy:
All you need is someone to tell you where to look on the statements, right?

Mindy:
Yes. Yes. It’s just like that basic education of just having the passwords to log into your accounts and then knowing where to find really basic information. I think it’s really just the ABCs of financial literacy, if you will, is just that really basic foundation.

Tracy:
The divorce process is very emotional. It has a lot of moving parts and it’s very overwhelming to people. What I like to do is take them through first just getting them acclimated to what the financial part of their divorce is going to entail. You’re going to be asked to give up a lot of documents. You might have to sit down and do something called a deposition where the attorney for your spouse is asking you questions. They might be trying to embarrass you with some of those questions. They might not be on the up and up with what they’re trying to do. They might not just be trying to find information. They might be trying to be shady about it.
I want people to understand all those things that are going to happen. Then getting your bank statements, some people don’t even literally know how to get bank statements. We talk through how do you get access to that. We talk through things like if your spouse is holding your tax returns hostage, there’s a way for you to get them on your own in about 10 minutes or less. You don’t even need your spouse. Mindy sits up and takes notice. Wait a second. Wait a second.

Mindy:
Awesome. I mean, that’s not awesome that you have to do it, but that’s awesome that there’s a way to do it because if you are the hands-off money partner in the relationship and then all of a sudden you are separating, this can be hugely overwhelming. Then on top of it, the hands-on money partner is like, “Ha, ha, you can’t get this. I’m going to keep this away from you.” Now here’s a way around that. I don’t need you anymore. I can go get it on my own. I love that.

Tracy:
It’s very empowering, isn’t it?

Mindy:
It is. Another part of your job is to look for money that a partner hides, which is sometimes referred to as financial infidelity. Can you explain financial infidelity for our audience?

Tracy:
Yeah, financial infidelity is going to encompass any lies about the money between partners. It could be hiding money. It could be having secret accounts, secret bank accounts, secret credit cards. It could be engaging in secret spending, things that you know your partner wouldn’t approve of, spending beyond the limits that you and your partner have discussed.
One common thing that I like to talk about is most couples have an agreement between them, if we’re going to spend more than X dollars, we talk about it first. If you are routinely spending above that limit, I consider that financial infidelity. Now, the question I often get is, “Oh, so if someone goes shopping and buys a pair of shoes and hides them in the back of the closet, is that financial infidelity?” Well, that’s probably pretty minor, but I would say it depends on your situation. You know your spouse. You know the agreements that we have. If you and your spouse have agreed we’re not going to do any secret spending ever of any nature, yeah, you might be engaging in financial infidelity. If you are in a relationship where the money rules are a little looser and you know your spouse is not going to care about a stupid pair of shoes, you just don’t want to have the discussion, that’s why you shoved them in the back of the closet, that’s a little bit different.

Mindy:
I did, I had a follow-up question. You mentioned secret bank accounts. Now I am part of a women’s financial group on Facebook where I see advice frequently that says, “Always have your own bank account,” or, “My grandmother said, “Always have a secret bank account that he doesn’t know about.”” I can understand both sides of that argument because we have seen women who’ve been taken advantage of in relationships where they are the stay-at-home spouse, they are the non-money spouse. Then all of a sudden, they’re waylaid by this, “Hey, we’re getting a divorce, and you have nothing.” On the other hand, that seems like you don’t trust your partner. Is that financial infidelity to have a secret bank account just in case?

Tracy:
Yeah, it is. I don’t advocate secret accounts, but I do absolutely 100% advocate an account in your name only. The reason why you always want to have an account that only has your name on it is so that no one else can shut it down. No one else can clean it out. If you only have a joint bank account, I have seen too many divorces where things go south, we know the divorce filing is coming or the divorce has just been filed, and the spouse cleans out that bank account and you are left penniless. You have nothing to go get a new apartment, to go even put food on the table. It’s important to have that account in your name only, that only you control, but it should not be secret, unless you have a special situation, like a situation where there’s abuse. That’s not my area of specialty. I don’t like to talk too much about it because I don’t want to give wrong advice, but I think in abusive situations there might be a good reason to have some secret money, but that’s not the norm of what I talk about.

Mindy:
Then I think that’s a good caveat. We will steer clear of the abusive situation. In this separate but not secret bank account, in terms of monthly spending, what would you recommend someone have in their separate but not secret bank account?

Tracy:
It’s really going to depend on how your family’s finances are set up because for some people, that separate account is only for maybe some fun money on a regular basis. Maybe they’re accumulating some money in there, but they really only use it for fun money. Then there’s not a huge need there. But if you’re splitting the bills, I pay this bill out of my separate account, you pay that bill out of your separate account, then you’ve got to take that into account for how much is going to be going into and out of that account on a monthly basis.
I am a fan of trying to accumulate some money in that separate account. I like the idea of sitting down at least once a month, if not more often, and opening up the books together and just going over what’s going on with your money. If you each had a separate account, at that time, you would be sharing information with each other about what’s going on with that account.

Amanda:
Nobody gets married planning to get divorced or planning on bad things happen, but they happen. How prevalent is financial infidelity in not just marriages, but in partnerships in general?

Tracy:
Oh, gosh. I think the statistics are something like 30% or 40% of people admit to engaging in financial infidelity. It is pretty prevalent, but you have to think that some of these instances are on the lower end of the spectrum. They’re probably more minor in terms of dollar amount in frequency, while some are much more frequent or larger. But I still think that’s a little bit of an eye-opening stat that there’s a pretty good chance that you’re in a relationship where there’s some money stuff going on that you don’t know about.

Amanda:
I think that’s a good point where it could be small, for example, the Amazon package or the pair of shoes, but it also could be larger where you’re pulling from your 401(k) and your spouse doesn’t see it. That’s a whole other thing. What about the big ones? How prevalent would you say some of those big, I don’t want to say life-changing because you can always make more money one day, but how prevalent are those big ones?

Tracy:
I don’t have a sense of that in terms of a stat for that. So many of these things are so hard. People will say to me on social media, when you get the trolls out there, “Prove it. Prove how often something happens or things like this,” and it’s like, okay, this stuff is happening in the dark of night. We don’t have good stats on how often it happens because so much of it is hidden. Even if there’s a survey, some of these surveys of how often are you engaging in financial fidelity, we’re counting on people self-reporting and admitting that they’re engaging in it. Well, that’s pretty tough to get some reliable statistics on that.
But what I would say, instead of focusing on how often it happens, I’d like to focus on how do we protect ourselves just in case? What are some common sense things that we can do that would protect ourselves in the event that that does happen?

Amanda:
I think that is absolutely the way to go. Let’s set ourself up for success from the beginning, but I have just another nosy question. I feel like I can’t be the only one thinking this, which is do you see this among both genders or is there a percentage of one gender doing this more? I feel like there’s a stereotype, but I’m curious what your thoughts are on that.

Tracy:
What’s the stereotype that you think exists?

Amanda:
Well, I feel like, well, I guess it depends on if, this is just my opinion, but I feel like just from TikTok videos, from a financial infidelity perspective, there’s all the “small” version. I’m using air quotes right now, but of, oh, I got to hide these Amazon packages from my husband. Oh, I got to make sure he comes during the day and go throw them in the back. Ha, ha, but also not because we don’t know your financial situation, but I feel like some of the bigger ones I always hear about men hiding the money. It’s my money. She’s trying to take it. I just feel like those stereotypes exist. I’m curious what your thoughts are. Are they true or are they just stereotypes?

Tracy:
Anecdotally, having done this work for decades, what you see is what I see. It is what happens. More often it’s the small shopping secrets that are happening with the women. Not to say that they can’t do the bigger financial infidelity, but I would say the instance of it is exactly the way you described it. When we get to the larger hiding of the money, it is more often than men who are being more aggressive about it. They are more likely to engage in romantic infidelity, which is expensive. There’s money going out the door for that as well. Unfortunately, the stereotypes I think do play out far more often than I’d like.

Mindy:
There’s stereotypes for a reason. There’s some basis in there, although I hate to say that. That when Amanda was explaining that, I’m like, “Yeah, that’s what I was thinking too.” Are you seeing any common reasons for financial infidelity?

Tracy:
I don’t necessarily come across reasons so much, but what I do see happening if we’re looking for some common threads is I see the financial infidelity starting small. It is starting with the smaller purchases, the smaller hiding of things that are going on. I like to call it the fraud snowball. It grows little by little because it becomes easier to justify to yourself what you’ve been doing. The longer you lie to yourself, the longer you tell yourself it doesn’t matter, the easier it becomes, the larger the transactions become. That’s something that I do see.

Mindy:
Wow. Yeah, I was just going to say that. Wow, I can see somebody doing it once and being like, “Oh, I didn’t get caught.”

Tracy:
Mm-hmm.

Mindy:
You do it again. It’s just like lying. You don’t start off with a wallop of a lie. You start off with a little bitty lie. Then you tell another one and another one. I mean, that’s what it is really. Your financial infidelity is lying to your partner about money, either money that you did spend or money that you did not spend.

Tracy:
Well, this is one of the reasons why it’s so important to have that regular check-in about the money, go over the books together because if there were some of these small instances, you could catch them early, hold your partner accountable and just say, “Hey, what’s going on here? I noticed you did some shopping that went outside our budget. Were there some things you needed? Was it just a momentary thing where you really, really wanted something and you just went ahead and did it?” Having those honest conversations can really change the long-term outcome.

Mindy:
If you’re not seeing common reasons, are you seeing common things that people are spending on secretly?

Tracy:
I mean, the most common things that I see are the affairs and the secret bank account where they are salting money away because they think that a divorce could be coming and they’re preparing for it. There’s a little something that I refer to as divorce financial planning. That’s one of those things is either that bank account, or even sometimes I mean it’s as simple as a shoebox with money in it that’s hidden somewhere, literally.

Mindy:
How do you find that? That’s not a paper trail.

Amanda:
Sneaks in their house at night.

Tracy:
You find it by accident. I just a couple weeks ago, I had someone contact me with direct message on Instagram. She said, “I want to thank you so much. I’d been following your account for a few months and my daughter’s getting divorced and I had turned her onto your account as well. We didn’t buy anything from you, we just watched your account. She was taking the tips that you were using, and she found two things. She found a shoebox of money hidden in their house, and she found a bank account that she never knew about. The shoebox had 10,000 in it. The bank account she didn’t know about had 50,000 in it.”

Mindy:
Oh, my gosh.

Tracy:
Yeah, and these are ordinary people, ordinary people.

Mindy:
That’s a lot of money for an ordinary person.

Tracy:
Yeah.

Mindy:
Where did that come from? How did he get it out without … Oh, my gosh. If she’s not the money person …

Tracy:
Right, it’s so easy. I teach people how to look for missing paychecks in their bank statements. I say, take 12 months’ worth of bank statements, take a green highlighter and highlight every paycheck that’s being deposited. Count those up and make sure that the correct number is there. Most people get paid 24 or 26 times a year. If you count them up and you see only 20 checks, there’s a problem.
You’re saying, “Well, wait a second. Most people have direct deposit, don’t they?” Sure they do, but it’s easy to divert a check. It’s easy to go into your system at work or go into HR and say, “Hey, I have a new bank account,” and divert a couple of checks and then turn it back onto the regular account. Or it’s easy to start having your employer divert part of your paycheck. You know when you’re filling out the direct deposit you can say, “Send a thousand dollars to this account and the rest of it to that account.”? That’s super easy to do. That’s why I want people counting up the number of paychecks, looking at how much is being deposited every time, does that amount make sense?

Amanda:
Those are like pro tips. I’m sorry. I’m still sitting here in shock over this $60,000 of hidden money from an ordinary couple because I’m like, how long had he been doing that?

Tracy:
That’s a great question.

Amanda:
That is a long time. Let me ask another question that kind of pivots because I know that a lot of couples are now starting to keep their accounts completely separate. Yours is yours. Mine is mine. We’re splitting the bills, but I think financial infidelity, and I was just having this conversation with someone so I’m so interested to hear your answer, but I think financial infidelity can still very much happen in situations where you have your own bank accounts too. I was wondering if you could speak to that for those who don’t have joint accounts.

Tracy:
Oh, sure. I am perfectly on board with people having separate accounts in their marriages. For some people, it’s just what works for them. The key though is if you’re going to do that, again, to have that visibility into what the other person is doing. It’s that check-in where we’re going to sit down and go over the books together. I always think that it needs to be routine that you’re doing it.
I like the concept of having a 10 or 15-minute check-in once a week because the more often you do it, the less scary it seems, the less overwhelming. Once a month, at very minimum. If that’s the most you can bring yourself to do as a couple, fine, then do it once a month. But it’s opening up the books and seeing the activity that’s going on in each other’s account.
The best example I have to illustrate why this is so important is let’s say we have our separate accounts. We each cover the bills we’re supposed to cover, and so everything looks fine, but we’ve been in agreement that we’re saving for a down payment on a house. We know how much each of us is going to contribute to that. What if I’m saving my part and my partner isn’t? I wouldn’t know that unless I have visibility into his account. If it’s a matter of sitting down together in front of the computer and logging into online banking, he pulls up his bank account and his 401(k) and his credit cards, and we just zip through them and then I do the same, cool. If you want to print out statements, cool. I don’t care how you accomplish it, as long as you have that level of accountability with each other.

Amanda:
I think that’s such a good point because you got married to be partners. Even if you’re keeping everything separate, that’s more comfortable for you, you have likely larger shared goals that you’re both going to need to be contributing to. I still think, to your point, having that exposure is really important. I actually love the idea of doing it more often, like you said, weekly for just a few minutes so it’s not some big daunting chore. Especially because if there are little things happening here and there, you can sit with your partner and talk through it versus it escalating or you forgetting about it and then it snowballing, which was the perfect term. I love that idea.

Tracy:
Or we have an unexpected car repair, where are we taking the money from to pay for that? Or there’s a house repair that’s expensive, hey, we don’t have cash right now. Are you okay with us putting it on this credit card or something like that? To have those weekly check-ins, those conversations are easier, they’re more timely. You can stay on top of things better.

Amanda:
Let me ask you then, let’s say, I guess either you’re meeting or you’re not meeting, but are there any early signs or red flags of financial infidelity that the listeners can look for?

Tracy:
There are so many. I have a laundry list of them.

Amanda:
Let’s hear them. All right, buckle up.

Tracy:
Well, I talk about the most common things. The most common thing that you’re going to see is a change in behavior. There’s two kinds of things I talk about in that regard. One is change in financial behavior, change in how they’re spending money, a change in the information that they’re allowing you to have.
One of the things that sometimes happens if someone’s engaging in financial infidelity is they cut you off from information. Maybe you suddenly aren’t able to log into the online banking, or there used to be bank statements that actually came snail mail to your house and now they don’t anymore, or they’re just not being open about the finances, those kinds of changes in behavior.
But then the other changes in behavior where they are hiding their phone from you. They are not keeping the same routine that they used to, maybe not coming home directly after work. Maybe they’ve got time that’s unaccounted for, they’re being secretive about their whereabouts. Those kinds of things tend to signify affairs. Financial infidelity is highly correlated with affairs. Again, because affairs are expensive, that money has to come from somewhere, somewhere that your spouse doesn’t know about. The biggest, the most prevalent red flag is definitely some sort of change in behavior.

Mindy:
Do you recommend people approaching their spouse if they notice this change in behavior, if they suspect something going on?

Tracy:
No. What I recommend, if you were to see one red flag and that’s all you saw, I would probably say, “Don’t get too worried. Wait and see if you see anything else.” If you see a bunch of red flags that are really, really concerning, the first thing I actually advise people to do is start gathering information before you say anything. If you do have access to the bank accounts still and the credit card accounts, start downloading statements, putting those in a safe place where they can’t disappear. Information is your friend.
Before you say anything, and I know to some people this sounds shady. They think, “Oh, gosh. I’m being a little sneaky.” No, if your name’s on that account, there’s nothing sneaky about it. You have every right to get those statements. You are protecting yourself. You’re being cautious. Get the information, set it aside before you have the conversation because I’ve seen too many cases where the conversation happens, they realize you’re onto them and suddenly documents are disappearing, access goes away, et cetera.

Mindy:
I’ve discovered that there is some shenanigans going on. I have downloaded these documents, and now I have made the decision that I want to hire a forensic accountant. What are my next steps?

Tracy:
You’re only going to hire their forensic accountant if you have a more complicated situation. A lot of people talk about money might be missing. They might need a forensic accountant. I will say in probably 95% of divorces, you don’t need a forensic accountant. You would need one if you have a more complicated situation, very high earnings, a lot of assets, maybe a number of real estate investments, a business that you or your spouse own, some generational wealth, some trust, things like that. Those are the more complicated situations where you’re going to think about hiring a forensic accountant.
What I tell people to do, if that’s the path that they’re on, I like to sit down and talk with them and their attorney, all three of us talking about what are our concerns, what information do we have, what do we want to accomplish? If someone is just in the suspicious stage, they don’t really have any hard evidence that anything has been going on, they really may not need a forensic accountant.
If they have some suspicions, the first thing I’m going to ask is tell me more about those suspicions. What have you seen of a concrete nature that leads you to believe some money is missing? If the answer is, “Well, my husband is just a jerk and we’re getting divorced, so of course he’s hiding money,” well, you’re probably not going to be a good steward of your own money spending it on a forensic account for that.
But if you can say to me, “I used to have access to these accounts and now I don’t. That really concerns me. Last year he had reassigned some documents and wouldn’t let me read them over before I signed them. He just really pressed me to sign them. The last couple of years, the tax returns got filed without me ever seeing them. When I was asking to see them, I was told, “Don’t worry about it. Don’t worry about it.”” These things all together really have me concerned.” I would say you are probably right and you need a forensic accountant.

Amanda:
Obviously, there are some steps that we’ll take before we hire a forensic accountant. Doing our research, making sure we’re not, I don’t want to say overreacting, but making sure that we’re doing our due diligence. What types of fees are associated with a forensic accountant? How much should we be preparing for in this divorce financial planning, as you put it?

Tracy:
I always say plan on $10,000 to $15,000 to start with a forensic accountant. You might find one who will start a little cheaper than that, but ultimately by the time you’re done with your project, it’ll be at least in the $10,000 to $15,000 range. The divorces that I work on are typically $25,000 to $50,000. If it gets really complicated, of course, it can be more than that, but it’s not a cheap endeavor.

Amanda:
Then how do you pay for that? Because then the minute that I hire you, if I don’t have another account, they’re going to see money coming out of our accounts. How do people get around that?

Tracy:
They don’t. If you’re hiring me, you’re already in the divorce process, and it really doesn’t matter if they know. You’re probably not hiring me before you’re in that divorce process. Most people don’t have that as an issue.

Amanda:
It’s not like a private investigator upfront type deal.
Then I have another question then as it relates to divorces is how does a prenup play into this? Can you add a financial infidelity clause? Because I feel like I’ve heard of crazy things in prenups with celebrities like you have to lose so much weight after you have a baby or you can’t be over outside of this weight range, really crazy stuff in the celebrity ones. I’m curious just in general how prenups play into this and if you’ve seen financial infidelity clauses.

Tracy:
Prenups are your friend, and prenups are for everyone. I am such a fan no matter how much or how little money you think you have doing a prenup because it gives you the ability to control what would happen if you divorce. We don’t like to think about the possibility of divorce when we’re getting married, but it’s a reality that it happens for a good number of people.
You can put just about anything you want in your prenup. I have seen clauses not so much related to financial infidelity as related to romantic infidelity. I see clauses about affairs that say, “If you’re the one caught having an affair, you get nothing,” or things like that. I have seen clauses that say something like if one spouse is found to have hidden money, when that account is uncovered, it goes 100% to the other spouse or 75% to the other spouse to try to put an incentive there for money to not be hidden.
Unfortunately, what happens a lot in divorce court is, yes, my husband is hiding money in an account and I uncover that account. The divorce court judge says, “Oh, we have an account here. It has to get split 50/50. Here you go.” It’s like, well, wait a second. Why didn’t he get penalized for hiding that money and trying to get away with it? Sometimes they get penalized, but more often than not, I see it really not being any penalty at all.

Mindy:
Oh, that’s not fair.

Tracy:
No, not at all, is it? It’s like there’s totally an incentive to hide money because you might not get caught at all. Even if you do get caught, in most cases, the worst that’s going to happen is you’re still just going to have to divide it with your spouse.

Mindy:
Which you would’ve had to do before if you didn’t hide it at all.

Tracy:
Yeah.

Mindy:
To be clear, we’re not suggesting that you hide money from your spouse.

Tracy:
That’s true. We are not suggesting that.

Mindy:
That really is a stinky policy. Hey, divorce court judges, change your policies.

Amanda:
Do you have any crazy or particularly interesting stories that you can share of things that you’ve found? I mean, we just heard about the shoebox with a bunch of cash, but do you have any other interesting ones to share? I’m sure you’ve seen it all.

Tracy:
Yeah, one fun one is the Instagram investigation where my client, the wife, was concerned about what her husband was spending on his girlfriend. Now to be clear, he got the girlfriend after they separated. It was not a cheating situation. However, he and his wife had a lot of money. They had something like $40 million that they were trying to split up.

Amanda:
Oh, my gosh.

Tracy:
Yeah, they had a bunch, but he was spending gobs and gobs and gobs of money on his girlfriend. The wife is like, “Hey, we are still married on paper. He is spending our money. I am entitled to some of this. What are we going to do about this?” Well, we have to prove what he’s spending on her. We had credit card statements and I said, “It really looks like his girlfriend is going shopping on his credit card account.” Of course, he was asked, “Does she have a card on your account?” He said, “No.” We asked the credit card company. Is there a card in her name, is she an authorized user? They said, “No, she’s not.” That didn’t make sense to us.
Then one day we found her Instagram account. On her Instagram account, she liked to post pictures of herself on her little shopping trips. What she would do is go to really high-end stores. “Here I am at Hermes, and here’s what I bought. Look at my little package,” and selfie, tag the Hermes store. Then she’d go to a fancy little lunch and selfie at the restaurant and tag the restaurant. She enjoyed doing that. I said, “Well, why don’t I just compare her Instagram posts to the credit card bills?”

Amanda:
Oh, my gosh.

Tracy:
I just sat there and one by one went through all of them, added it all up, and $400,000 later …

Amanda:
No, wow. Grab your popcorn and your cocktail and sit down. That is, oh my gosh. Wow. Well, that is, like I don’t even know what to do with that information. I also can’t imagine splitting up $40 million, but-

Mindy:
Step number one, don’t flaunt it on the internet where it never goes away.

Tracy:
Right. Well, what’s so funny is that husband didn’t have any social media accounts. He thought he was really insulated from anything like that. He wasn’t monitoring what his girlfriend was doing on social media, not paying attention to that because not out there on social media himself. That was fantastic. You don’t find that kind of stuff every day, but when you do, it makes a really fun story to tell.

Amanda:
Well, wow, that is very interesting. Thank you so much for sharing. That was incredible. I can’t have even thought that up. On that note, are there any just general tips, watch-outs, anything that we haven’t asked you because you don’t know what you don’t know. I’m sure that you probably have a plethora of things, but any other just general tips for people out there?

Tracy:
Well, it depends what kind of tips you’re looking for. We could go down the path of more red flags of fraud. We could go down the path of some of the common places that people like to hide money, some of the common ways we uncover it. I mean, this is choose your own adventure, Amanda.

Amanda:
Yes, let’s go down the pathway of the where people are hiding it.

Tracy:
Where they’re hiding it. Did we talk about a secret credit card already? I don’t think we did.

Mindy:
No, I don’t think we did.

Tracy:
The secret credit card is so common, especially when a romantic affair is involved. Again, like I said, they have to pay for this affair somehow. They can’t pay for it necessarily with the joint bank account because if your spouse doesn’t … Well, sometimes they do because they know their spouse isn’t looking, but I don’t see that as often. What I see is they have another credit card that you never knew about. How are we going to figure out that this credit card exists?
Well, we’re going to look at the bank statements. We’re going to look for a payment to a credit card company that we didn’t know about before that we didn’t know either of us had in our wallet. Because typically in the average family, there is one or two credit cards that we each have. There’s a Citibank account. We each have a card for it. Then there might be a Chase credit card, and we each have a card on that account. That’s usually the extent of it. If you see a payment to Wells Fargo, maybe there’s a Wells Fargo credit card. That’s one way to uncover it.
The other way, the more common way, is you guys have a Citibank credit card account. There’s one account that you know about, but you look at the bank statements and you see that Citibank is being paid twice every month.

Mindy:
Hmm.

Tracy:
Hmm, some people discount that and think, “Well, maybe he broke up the payment and instead of making one big payment throughout the month, he made two smaller payments.” No, more likely there’s a second Citibank account, credit card that you didn’t know about.

Amanda:
Sneaky.

Tracy:
Sneaky, but not that hard to uncover. If I tell you what to look for, it’s not that hard to find it.

Mindy:
Yeah, I would not think of this. As you’re saying this, I’m like, well, of course.

Tracy:
Of course, it makes sense.

Mindy:
25 minutes ago I was like, no idea. Now I’m going to go look through my bank statement. Not that I suspect anything. I’m just curious what’s all in there because-

Amanda:
You’re going to get a DM from Mindy later.

Mindy:
… I don’t look at them.

Tracy:
My answer is going to be, “Mindy, you have to go buy the Divorce Money Guide if you want to know more.”

Mindy:
Well, and that leads me to my next question. Do you have any resources that our audience can access if they suspect or if they more than suspect that they are experiencing this?

Tracy:
Of course, I do. Of course, I’m out there on social media. I am on Instagram, TikTok, Facebook. I’ve got little reels there, little videos where I give tips. Of course, that’s just a starting point for people, but it’s at least to get you thinking.
I have a podcast of my own called, Find Me the Money. That’s the other free resource out there for people. That podcast is the companion to my book that came out in May called, Find Me the Money. That book is to give people a starting point for how to find money that their spouse may have hidden. We talk about a lot of the things that we talked about today, the secret credit card and things like that, and how you might uncover some of the ways that money is hidden.
Then there’s the Divorce Money Guide. That’s my online product where I walk people through the steps of really showing them the how of what is the divorce process related to money, how do you get your account statements, how do you get those tax returns from the IRS, just like I talked about before, and then what do you look for in them once you have them. If you are not an accountant, if you’ve never dealt with tax returns before, what would I look for on there? What would I be able to find?

Mindy:
Awesome, thank you. This is going to be so helpful for anybody who’s going through this just to give them a start where to look. What is that Instagram handle, that Twitter handle, that Facebook handle that you just mentioned?

Tracy:
Instagram and TikTok, it’s Divorce Money Guide.

Mindy:
We will link to this in our show notes so that people don’t have to write that down furiously as they’re driving. If they are, please be safe, hands on the wheel. Tracy, this was so awesome. I had such a good time talking to you. Where can people find your, what’s your website?

Tracy:
My website is Fraudcoach.com because I am your fraud coach throughout your divorce. I have set up a page there for your listeners, especially for them. It’s Fraudcoach.com/Pockets. What they’re going to find there is the book, the Divorce Money Guide, they’re going to find a red flag assessment. We talked a lot about red flags of fraud. People don’t really know, should I be worried or not? Is this serious or not? Am I minimizing what I’m seeing or am I blowing it out of proportion? It’s a three or four-minute quiz that they take. At the end of it, I’ll tell them how likely they are that they have financial fraud.

Mindy:
Oh, I love that.

Tracy:
Little resources for them. I know that divorce is a really emotional time. It is really hard. There’s so many moving pieces. It’s expensive. I’ve been through it with hundreds of clients. I am just hoping to help make the process easier, help people take control over their money, get more comfortable with it, and get the kind of settlement that they deserve because you’ve got one shot in your divorce to find that money, get your share of it. I want to be there to help.

Mindy:
Tracy, that was awesome. Thank you. That’s Fraudcoach.com/Pockets. I appreciate you doing that for us and for our listeners.

Tracy:
You’re welcome.

Mindy:
Well, Tracy, have had a wonderful time talking to you. Thank you so much for your time today. We will talk to you again soon.
All right. That was possibly my favorite show ever, Amanda. Wow. The tips at the end about just looking for a second Citibank card, look for your checks, how many checks are getting deposited into your bank account? Like I said in the show, this is so easy once you give me these suggestions, but I wouldn’t think to look if my bank account is being hit with my paycheck because of course it’s being hit with the paycheck, but maybe not.

Amanda:
No, I agree. I think those little tips just show you don’t have to be a tech expert or a rocket scientist to go and find these things. They are very easy, tangible things that you can do with just a little basic education. The big takeaway for me was just getting educated because just knowing this stuff from the beginning before you are hopefully never in it is really helpful because having that base layer, that foundational layer before emotions are involved, I think can be really, really helpful. I think this topic is relevant to literally any person out there who’s in a relationship.

Mindy:
Absolutely. I mean, imagine you think that your spouse is hiding something. Then you let it fester in your mind and fester in your mind. Then you discover Tracy’s ideas and you start and you’re like, “Oh, there’s nothing there.” You could really break that trust. Once you break trust, it’s really hard to get it back.
On the other hand, you could be, “Oh, he would never do that to me,” and pushing it aside and pushing it aside, and then you find out way down the road. I mean, if you think something’s going on, chances are something’s going on. Here are some solid starting points. If you find a red flag, okay, maybe it’s explainable. If you find 50 red flags, that’s a lot harder to explain. I absolutely loved this episode. I’m so thankful to Tracy for coming on the show.
Amanda, should we get out of here?

Amanda:
Let’s do it.

Mindy:
That wraps up this episode of the BiggerPockets Money Podcast. She is Amanda Wolfe, the She-Wolf of Wall Street. I am Mindy Jensen saying, take care, Black Bear.

Speaker 4:
If you enjoyed today’s episode, please give us a five-star review on Spotify or Apple. If you’re looking for even more money content, feel free to visit our YouTube channel at YouTube.com/BiggerPocketsMoney.

Mindy:
BiggerPockets Money was created by Mindy Jensen and Scott Trench, produced by Kaylin Bennett, editing by Exodus Media, copywriting by Nate Weintraub. Lastly, a big thank you to the BiggerPockets team for making this show possible.