Finance

Financial Abuse: What it is and how you can overcome it?

The fate of all relationships is not the same. Some relationships become unpleasant with passing time and involve a phase of abuse before everything ends. This period of abuse is encompassed by physical and mental trauma. In addition to verbal and physical abuse, the victim may also face financial abuse. In fact, 99% of cases of domestic violence even include financial abuse. 

Many abusers take full control over their partners’ finances and spoil their financial freedom. However, the sad part is that most of the individuals fail to realize that they are victims. The ones who somehow realize are unaware of how they can overcome this situation. So, we’ve got you covered. In this post, you’ll understand what financial abuse is; how you can prevent it; how you can identify it and what you can do to overcome it.     

What is financial abuse?

When a person controls his/her partner’s ability to use, acquire and manage financial resources, then it is termed as financial abuse.  The motive behind this type of abuse is to gain power and dominance in a relationship. The abusers also aim at trapping partners in the relationship by denting their financial status and financial independence.

There are different ways of financial abuse from limiting victim’s access to financial resources, family assets to concealing financial information. Along with abuse of finances, the abusive partner may try to intimidate, threaten and manipulate the victim in order to him/her trapped in the relationship.   

It is the most toxic form of abuse whereby an abusive partner keeps the spouse in a bad relationship by making him/her financially dependent. In fact, many victims are forced to stay with or return back to abusive partners as they cannot support themselves and their children financially. The abuser takes control over the entire wealth of spouse, withholds it and even hides financial information. It can also happen with elderly people where their relatives, children or friends steal money from them.   

Tactics used by abusers 

There are many tactics that abusers apply to manage the finances of their partners. Irrespective of the fact whether the abuser is using one or all of them, it will still be regarded as financial abuse. Here are some of the commonly used tactics:

Exploiting resources

In a relationship, both partners share their financial details with each other and have access to other’s bank accounts, credit cards and other assets. However, if your partner is controlling your savings or earned money, it is a form of financial abuse.   

Interfering with job

If your spouse is controlling your earning ability and interfering in your job, then it a kind of financial abuse. In this case, the partner may try to stop you from working or take career decisions on your behalf.  

Controlling shared resources

If you are in a relationship where your spouse has total control over the finances of the family, then you are undergoing financial abuse. In this case, your partner will do everything from budget planning to expenditure investment on own. You’ll have negligible or no access to shared assets and resources. 

Are you a victim of financial abuse? 

Many times, people fail to realize that they are victims of financial abuse. It’s because there are different tactics that abusers use to gain financial control over their partner’s wealth. If you’ll show suspicion in the activities of an abusive partner, the person will smartly come out of the situation by saying “Baby, that’s how relationships work”, or “I am just trying to keep the finances of the family on track’. At times, the abusive partner may even manipulate you to such an extent that you’ll yourself give complete control of your finances. The abusive partner may try to show concern by saying “You’re already handling so many things and taking unnecessary stress. So it’s better to leave financial management to me”. And, you’ll fall for this trap thinking that your spouse is doing this out of love and really cares for you. 

The abuse is generally subtle in the beginning and it escalates gradually. Your spouse may try to show that he/she is handling finances to make things easy for you. The partner may even explain that he is doing it out of concern and care. The abuser may explain ‘financial management for the family’s financial stability’ as the reason for giving you a fixed amount to spend. Gradually, the amount of allowance decreases until a time when you witness a denial to give any more funds. It is then that you’ll realize that you’re being trapped. But, then it’s too late! So it is better to identify the early signs of abuse.  

Has anything as such happened with you? If you are skeptical in deciding whether or not you are facing financial abuse, then you should consider certain signs to come to a conclusion.

Signs of financial abuse

It is a confusing situation when you have to judge whether your partner cares for you or he/she is abusing you financially. Here are a few signs that can confirm that you are a victim: 

  • Your partner asks you to give details of your expenses along with bills for verification
  • Your partner allocates a ‘budget’ or ‘allowance’ for you without taking your consent
  • Takes charge of managing all household finances
  • Pressurizes you to leave your job or advice to disregard your work responsibilities
  • Your partner spends your money without informing you  
  • Your partner does not allow you to access self/joint bank accounts
  • Maxes out the limit of your credit card and doesn’t pay for it
  • Restricts you from pursuing higher education or from attending any job training 
  • Uses the funds and savings of your children without taking your consent
  • Hinders your professional work by stalking or harassing you at work 
  • Prevents you from using things like car, house, or other assets as you haven’t paid for them
  • Your partner criticizes your job/career decision and tells you where you can’t work and what you can’t do 
  • Forces you to file fraudulent income tax returns
  • Refuses to contribute to running the household 
  • Files insurance claims falsely
  • Hides your assets
  • Gives you a certain amount of money to spend and does not pay above it
  • Sells your property or other assets without your information

What are the impacts of financial abuse?

Financial abuse affects the victim in the long-term. It isn’t illegal most of the time but its impacts can completely ruin the financial condition of the victim. For instance: If your spouse maxed out your credit card and isn’t paying for it, then you’ll have to make the payment. If you are unable to pay, then it may decrease your credit score. This, in turn, makes you ineligible to apply for a car loan, home loan, education loan or any other credit facility. In this way, financial abuse can affect your financial stability. If you are without a job and money, then it can force you to go back to an abusive partner as you are financially dependent on him/her.    

How you can prevent financial abuse? 

From the time your relationship turns stale, you should take suitable measures to prevent financial abuse. An abusive partner may try to deliberately misuse your assets and spoil your credit capability thereby making it harder for you to come out of the relationship. However, you can take certain measures to protect yourself from financial abuse.  

  • You should secure your personal as well as financial information. For this, you can call your bank and credit card company and change all your social security number, pin, passwords and access codes. You should also change the passwords of all your devices so that an abusive partner is unable to use your money. Furthermore, you should never share your social security number with your partner. 
  • You should never apply for any loan or enter into any financial contract with the abuser as you’ll land in debt.
  • Before your marriage, you should understand all the state laws regarding job and finances.  If you are skeptical about your financial independence post your marriage, you should consult a lawyer before marriage. 
  • You should generate credit reports from time to time or yearly. Through the reports, you’ll come to know if your accounts were opened by the partner.  In case you find any unrecognizable activity, you should immediately report to a credit bureau. You can also get your credit frozen so that no one can take loans by using your accounts. A ‘fraud alert’ can also be issued to prevent credit in your name.   
  • In addition to saving money in bank accounts, you should also save cash to support you in emergency situations. You can cancel your cash and other assets away from the reach of an abuser. You may also consider opening a new bank account that is unknown to the abuser. 

How to respond to financial abuse? 

As much as it is emotionally draining to come out of an unhealthy relationship with financial abuse, it is equally challenging economically. In fact, the after-breakup period is one of the most difficult phases in anyone’s life. During this period, people lose their ability to think clearly. It is better to be well-equipped to face post-break time. You should create a safety plan much before getting separated from the abusive partner. 

You can consult an advocate of domestic violence to receive suggestions and advice in creating a safety plan. Legal help can also be taken. In addition to this, you should get financial statements and credit card details photocopied. These details will help you to prove that the account and credit card belongs to you. 

In order to come out of financial issues such as debt, credit or mortgage, you should consult a financial expert and seek pieces of advice. Different states have different legal procedures to end a relationship. So, you should be aware of these. Furthermore, you can also gain knowledge of assistance programs and other resources available for survivors in your state.  Many programs even help in getting a job and in securing financial security.     

Closing note

Financial abuse is a distressing situation. So you should always have a proper financial plan and understanding of state laws before your marriage. If you are a victim, you can take suitable steps to overcome the situation. You should always stay strong, positive and calm. Furthermore, you should trust the laws.      

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