A broken piggy bank full of spilled dimes.Financial abuse is the use of money or economic assets to harm or control another person. It is incredibly common: studies suggest 94-99% of domestic violence cases involve some form of economic abuse. When the path to financial independence has been blocked off, many individuals stay with their abusers to avoid poverty and homelessness.

Like other forms of abuse, financial abuse can cause people to feel isolated and hopeless. Even after an individual has escaped an abusive relationship, the emotional effects of mistreatment can last years. A licensed therapist can help individuals recognize abuse, access community resources, or recover from trauma. 

What Is Financial Abuse?

With very few exceptions, people need money to survive. We need it to buy food, obtain shelter, access health care, and purchase everyday necessities. Economic abuse prevents an individual from accessing wealth or earning money on their own. The individual may then become dependent on their abuser for resources, making it much more difficult to leave.

Economic abuse can take several forms:

  • Exploiting Victim for Wealth: The abuser might force an individual to hand over their wages, credit cards, inheritance, or public benefits checks. In other cases, an individual may be coerced into giving free labor to the abuser. For example, a woman may be pressured into working for her boyfriend’s family business without any compensation.
  • Blocking Access to Pre-existing Resources: An abuser may convince the victim to get a joint bank account, then change the passwords or remove all the funds without warning. They might also destroy property which could otherwise be sold for cash. The abuser may then give the victim an “allowance” to only purchase items they approve of. 
  • Sabotaging Employment: To keep the victim financially dependent, an abuser may insist the victim quit their job. If the victim refuses, the abuser may sabotage their career by harassing them at work, injuring them, or stealing their means of transportation. One survey found 64% of domestic violence victims have their ability to work impacted by abuse.
  • Coerced Debt: An abuser may engage in identity theft, racking up debt in the victim’s name. They might also force the victim to apply for loans or credit cards. Unpaid debt will likely ruin the victim’s credit score, making it difficult to find housing or employment outside the relationship.

Financial abuse often occurs alongside other forms of manipulation. For example, an abuser may hit and berate an elderly dependent until he hands over his social security check. Some individuals use financial abuse to “trap” victims who might otherwise leave due to physical, verbal, or sexual aggression. Money is one of many methods of control which can be used in abusive relationships.

The Dynamics of Financial Abuse

People from all backgrounds can experience economic abuse. That said, people in poverty are more likely to be targeted, as they can be less likely to leave the abuser. They may not have opportunities to earn a living wage for themselves. They also tend to lack a social network who can fully support them as they leave a relationship—friends and family who are willing to help may not have the resources to lend money or provide housing. 

Certain populations are more vulnerable to financial abuse:

  • Women. In many cultures, women have only recently been allowed to own property or hold high-paying careers. Financial dependency is still considered the norm for lots of women.
  • Marginalized communities. This may include immigrants, LGBTQ+ people, disabled people, and other populations who often experience employment discrimination.  
  • Parents. People with young children may endure mistreatment so their children can have a certain quality of life.
  • Elderly individuals. Older people with cognitive impairments may have trouble keeping track of their own finances, making them vulnerable to exploitation.

Victims of financial abuse are not at fault for their predicament. A person does not have to be gullible to trust a spouse or family member with financial information. Nor are they “selfish” for wanting a roof over their heads. Even people who are financially savvy can have a hard time recognizing financial abuse at first.

Financial abuse often begins with small, seemingly generous acts, such as volunteering to take control of household bills. Over time, the abuser gradually expands their power. They may berate the victim for buying things they believe are unnecessary or too expensive. Then they might take the credit card for themselves to “prevent frivolous spending.” Once they have sole access to the money, they may spend the funds budgeted for groceries or childcare on themselves. If they had misused these funds at the beginning, the victim might have protested. But after being slowly convinced that they are “greedy” or “bad with money,” the victim is more likely to hand over power without a fight. 

Often, people who engage in financial abuse do not see their actions as wrong. A resentful caregiver might view theft as deserved compensation for nursing an elderly relative. An insecure husband might believe his wife’s duty is to serve him as a homemaker, not a fellow breadwinner. Still others may use financial abuse to ensure they are not “used” or “abandoned” by the people they love. However, difficult emotions do not excuse financial abuse or erase the harm it causes.

Effects of Financial Abuse

By the time an individual escapes economic abuse, they’ve likely had a serious blow to their financial health. They may have lost their savings, their house, or their job. If an abuser prevented the individual from getting an education or building a resume, the victim may have trouble making up for lost time.

The consequences of credit fraud and debt can be especially pervasive. Consumer reporting agencies can keep bankruptcy information on an individual for up to 10 years. A bad credit score can not only prevent someone from getting loans, but also bar them from renting an apartment or getting any job that involves handling money. Even if someone went into debt due to identity theft, they may find it difficult to prove their innocence and build their credit score back up. 

Financial abuse can also cause emotional issues. Victims may have trouble trusting loved ones and isolate themselves. They might also spend excessive time worrying about money and potential theft. Some people feel extreme anxiety or guilt when using money, especially when buying anything for themselves. It is common for victims to blame themselves for the abuse and feel intense shame around the subject of money.

Recovering from Financial Abuse

People recovering from financial abuse may benefit from therapy. A trained therapist can help people work through intense emotions such as fear, helplessness, and shame. The therapeutic relationship is a safe place to rebuild self-esteem and renew their sense of hope. 

If an individual enters a new, non-abusive relationship, they may struggle to trust their partner while protecting themselves. A couples counselor can help partners build a healthy financial relationship in which:

  • The partners can disagree about their finances but still work together to find a compromise.
  • Both partners know where their money is stored and how it is being spent.
  • Both partners can access money on their own if they need it.
  • Each partner has an equal say in major purchases. For example, a couple should have a conversation before getting a mortgage because both partners will be affected by this new debt.

These principles hold true even if one partner makes more money or manages the household finances. 

If you are recovering from economic abuse, know that you are not alone. Many people have survived abuse and gone on to live happy, independent lives. There is no shame in getting the help you need.

References:

  1. About financial abuse. (n.d.). National Network to End Domestic Violence. Retrieved from https://nnedv.org/content/about-financial-abuse
  2. Conner, D. H. (2014). Financial freedom: Women, money, and domestic abuse. William & Mary Journal of Race, Gender, and Social Justice, 20(2). Retrieved from https://scholarship.law.wm.edu/cgi/viewcontent.cgi?article=1380&context=wmjowl
  3. Financial safety planning. (n.d.). National Network to End Domestic Violence. Retrieved from https://nnedv.org/content/financial-safety-planning
  4. Quick guide: Economic and financial abuse. (2017, April 12). National Coalition Against Domestic Violence. Retrieved from https://ncadv.org/blog/posts/quick-guide-economic-and-financial-abuse
  5. Sekar, A. (2012, October 1). NerdWallet. Retrieved from https://www.nerdwallet.com/blog/loans/domestic-violence