Financial Abuse
What it is, how to prevent it, and the path to economic empowerment.
When you think of Domestic Violence, you usually envision bruises or physical marks, if not that, verbal abuse comes to mind- yet one of the most hidden forms of power and control is financial abuse and is cited as the number one reason most DV victims stay in an abusive relationship. According to the national coalition against Domestic violence, 99% of victims experienced economic abuse.
What is Financial abuse? Financial abuse is a range of tactics used by an abuser to undermine the economic and financial independence and confidence of a victim. The goal is to create financial dependence as a means of control. This can include one or more of the following tactics.
Is your partner doing this?
Controlling or “taking care” of finances?
Many couples have one partner that is better in finance and takes care of budgeting etc. It turns to abuse when it's used for coercive control:
For example:
Steal money from you or your family?
Make you feel as though you don’t have a right to know any details about money or household resources?
Put you on an “allowance” even if you object to this?
Force you to account for all money you spend by, for example, asking for receipts?
Force you to turn over your paychecks or public benefit payments?
Force you to cash in, sell or sign over any financial assets, jewelry, or inheritance you own?
Employment sabotage
Prevent you from working or attending school or skill-training sessions?
Force you to work in a family business for little or no pay?
Harassing you at your place of employment
Verbally or physically abusing you before important meetings so your unprepared
Leaving you no choice but to quit
Interfere with your performance at work, by calling you non-stop, visiting your workplace unannounced, etc.?
3) Economic Exploitation
Destroying your credit history or financial resources?
Overuse your credit cards or refuse to pay the bills (thus ruining your credit)?
Prevent you from obtaining or using credit cards or bank cards?
Force you to give him/her access to your bank accounts to make transactions without your input?
Refuse to work to help support the family?
4) Coerced Debt
Force you to agree to a power of attorney that would enable your partner to legally sign documents without your knowledge or consent?
If you answered YES to one or more of the above questions, there is some level of financial abuse being experienced.If you believe you are going through Financial abuse, it's advisable to call a domestic violence advocate to understand your options and to ensure safety.
What then does a healthy financial relationship look like?
This is when both partners have equal access to financial statements and information even if one is managing it. Each partner feels safe to voice a difference in opinion on financial matters, decision-making is equal regardless of who is the higher income earner and both know how the money is spent and how much debt is owed.
If you are worried that you don’t have a healthy financial relationship, what should you do?
The Road to Economic Empowerment:
The answer is simple: Empower yourself- Economic empowerment is key and below I will outline a few steps you can take towards that road. First and foremost, it's important to increase your knowledge about financial literacy. Financial literacy is to understand and effectively use a set of skills and knowledge that allows individuals to make informed decisions on financial matters. Those skills might include personal financial management, budgeting, investing, and other money-related activities.
Second is improvement in economic self-efficacy or the confidence and belief that you have the resources and ability to be successful and third is working towards economic self-sufficiency which involves programs designed to encourage, assist, train, or facilitate the economic independence of the individual including job training, employment counseling, basic skills training workforce education and more. The AllState move ahead curriculum is an excellent resource to use to educate yourself on financial matters. https://allstatefoundation.org/wp-content/uploads/2020/03/Moving-Ahead-Curriculum_-All_-English.pdf
Financial Safety Plan:
Creating a financial safety plan is also advised.
This can be done while you are still in your relationship and includes things like:
1) saving a portion of your money every month
2) checking your credit report periodically - https://www.annualcreditreport.com/index.action
3) opening a separate bank account
In abusive relationships, things might get complicated with issues such as how to disentangle joint financial relationships and how to repair credit damage done by a partner. It might seem daunting to identify resources to assist with financial challenges, that's why I reiterate the importance of calling and speaking to a domestic violence advocate if you feel like you are in an abusive situation. They will help guide you and talk through your plan of action and ensure safety.
What do you do if you don't want to leave your marriage but are not happy with your financial situation? At this point, you need to speak up, and communicate with your partner. Together, you can discuss and work on developing some financial boundaries.
Disagreements about money are one of the most difficult conflicts for people in relationships to resolve. There's little instruction on how to manage our finances with a spouse or partner. And if you do it wrong, it can mess everything up.
Creating Financial Boundaries
Setting clear financial boundaries can help save your marriage from financial ruin. It will help protect not only your money but also your relationship and your peace of mind.
1. Set clear financial goals
Try to understand the way your partner views money, and the value system they were raised in. Decide on your mutually agreed upon values and set collective and independent goals.
Your financial goals must be measurable( with a timeline), realistic, and written down and shared. Having a clear vision of the goals by writing them down helps significantly in making them a reality.
Once your goals are set, make sure you check in every month to review your finances and ensure you're following the laid-out plan and goals. If there are any setbacks, reevaluate as needed.
2. Know your partner's priorities and be ready to compromise
It is important to understand early on how you each view money, some people might be big spenders while others like to save- knowing and understanding this is helpful in goal setting.
3. Budget together:
This will help you understand the reality of what is coming in and what is going out. You can recognize spending habits as well as work on tackling credit card debt and other financial stressors together. Knowing how much money is available will make you think twice before spending it-especially if you're saving towards a bigger goal.
Here is a sample worksheet you can use to create a detailed budget.
https://blog.mint.com/wp-content/uploads/2022/05/Simple-Budget-Tracking-Template-_-Intuit-Mint.xlsx
4. Both spouses should have access to money
You and your spouse can decide if you want joint accounts or separate accounts, as long as both have access to money for basic needs, supplies, and wants.
5. Discuss large financial decisions before you make them
Define what a large financial decision is and then have that set boundary that anything in excess of that certain amount will need to be discussed. When making joint goals, be realistic such as planning vacations, etc.
6. Set rules for gifts and lending and learn to say no when needed
Lending money to family or friends can be challenging unless there are rules in place. It does not matter who is the income earner since not having money will affect everyone in the equation.
Lending money should not affect your budget so boundaries are very important. The same goes for giving gifts and what is a safe amount to give. This money can be used to support causes or someone in need. This also has to include gifts for special occasions, charity, or purchases for others. Always, first, make sure that you have enough room in your budget for these needs.
Finally learn to say No if needed. People may not always like it but it is important for you to understand what you can and can't afford.
7. Communicate with each other clearly:
If your partner is controlling and that is what he believes is normal, try to communicate the importance of the above boundaries with him or her. Clear Communication is key to healthy boundaries.
Sometimes it's better to get professionals involved to work out the differences between the two of you. Be true to yourself and what you want because if you're simply putting up with something, chances are, it won't last. So get help before it's too late.
In many instances, all other aspects of your marriage could be great, yet when it comes to finances, there might be an issue or some hiccups. The best way to move forward is to empower yourself and have an open conversation with your partner. Work on creating financial boundaries and be open to compromise.
Whether you are in an abusive situation or going through a financial hurdle, you're not alone and help is available.
Sources:
https://vawnet.org/material/economic-empowerment-domestic-violence-survivors
https://nnedv.org/content/finan
(https://www.npr.org/2016/03/08/469239033/how-to-keep-money-from-messing-up-your-marriage)
https://nnedv.org/resources-library/moving-ahead-curriculum/#curriculum
https://www.womenslaw.org/about-abuse/forms-abuse/financial-abuse
