Financial or economic abuse is a type of domestic violence that can occur between partners or exes, parents and children, and in other financially dependent relationships. Financial abuse can also occur in workplaces and in business partnerships.
During clinical training, therapists learn about physical, emotional, and sexual abuse, but what about financial abuse and neglect? Most people think that domestic violence involves different forms of psychological and emotional abuse. However, financial abuse between intimate partners is an invisible form of domestic violence. Further, financial negligence fails to meet legal and ethical requirements for financial relationships.
What financial abuse looks like in an intimate partnership
Financial abuse is a form of bullying aimed at manipulating or controlling the other person, often to improve one’s own financial situation. I first noticed the phenomena of financial abuse in my therapy practice when Laura, a young mother, came to me for therapy and reported extreme financial inequality in her marriage to an older man. When Laura got married, she brought no debt and some savings. However, he used his money to buy a luxury car, which he drove to work, and she was not allowed to drive. Instead, she took the train to her full-time job.
Evenings and weekends, Laura took her grandchildren by bus to the grocery store and ran errands. She took care of all the housework and cooking while depositing her salary directly into her personal account. He gave her $30 a week for “pocket money”, which was supposed to cover everything she needed, including work clothes, makeup, food and transportation.
Meanwhile, he generously spent money on himself. Laura was not authorized to open or view credit card statements that came in the mail, even though her name was on them. Clearly, she was financially abused during this abusive marriage.
Typical warning signs include:
- Fear or anger about money issues in your relationship.
- Frequent arguments or conflicts over money.
- Feelings of inequity or an imbalance of power and control in your relationship.
- Financial guilt, financial shame and financial anxiety.
- Not feeling financially secure.
- Dealing with sudden financial loss or the chronic stress of having insufficient financial resources due to the past caused by financially triggered PTSD.
As we addressed the financial abuse in Laura’s marriage in our therapy sessions, over the course of a few years Laura bravely transformed herself, her career, her finances, and even her marriage.
8 Hidden Types of Financial Abuse and Neglect
Financial abuse and neglect can be disguised as relationships by:
- Financial lies, secrecy or deception. Trust in the relationship can be eroded if there is a lack of financial transparency. For example, someone exhibiting shady financial behavior, such as having unexplained wads of cash in their wallet.
- Financial infidelity. It’s when lies and secrecy rise to a level of betrayal – like having secret debt or assets, or even a secret second partner and family (which I’ve seen many times in my practice) – that what so-called “financial infidelity” results.
- Financial gaslighting. It’s when someone makes you feel crazy or guilty for having normal emotional reactions or reasonable demands or limits. For example, young adult children point out that you’re a bad parent for trying to set healthy financial boundaries with them, or a partner says it’s your spending too much on groceries — rather than their expensive weekend getaway with friends — is why you don’t have money in your joint account for rent.
- Addiction to drugs, alcohol, sex and gambling. Addiction can wreak financial havoc on addicts and their families. One of my clients’ families went from extremely wealthy to poor and on public assistance over the span of two decades due to an untreated addiction.
- Intimidation or financial pressure. This behavior can lead to power, control and manipulation issues in the relationship. For example, one partner may push the other to buy a house that is well beyond a comfortable price range for them. To manipulate the decision-making process, they may use aggressive tactics or emotional withholding behaviors.
- Financial shame and denigration. It is financially shameful to put someone down for earning less or nothing at all because they are a stay-at-home parent, disabled or chronically ill. Also, it is not acceptable to criticize your partner by talking badly about their spending habits or their debts in front of others.
- Financial obstruction. When this happens, people shut up and refuse to talk about financial realities. This does not include any communication, collaboration, negotiation or dispute resolution. It is forbidden to meet with a neutral mediator such as a financial adviser, a financial planner, a debt consolidation agency, a financial therapist or a coach.
- Financial restraint of resources. Withholding resources such as access to bank accounts, credit cards, financial statements, transportation, property, healthcare, or even food is a way to isolate a victim in an abusive relationship and is abusive and negligent.
When Financial Abuse or Negligence Becomes Illegal or Criminal
Financial abuse has repercussions. Often this can result in the non-payment of legally required financial obligations such as rent, alimony, maintenance or child support. If desperate, it becomes a downward spiral. They can take out loans or credit cards in another person’s name, leading to identity theft. They can steal using someone’s bank accounts, credit cards, property or money without permission.
Financial abuse of older people is on the rise. Elder fraud refers to illegal schemes that target seniors. According to the National Council on Aging, older Americans who are victims of financial abuse lose an estimated $36.5 billion a year. If you feel at risk or know someone who has been targeted, report the suspicious activity to Adult Protective Services in your area.
Get help for financial abuse and neglect
For immediate help, contact the consumer credit counseling service, or a personal banker, credit union representative, or financial adviser who can offer you consultation and professional help. Consider a free, anonymous twelve-step program or find a financial therapist. trauma, thereby improving your mental and financial health.
Help is available and effective and you are worth it.