Financial Abuse in Relationships: Signs, Impact & How to Seek Help

Being in a relationship often involves sharing physical, emotional, and financial aspects of yourself with another person. And while relationships come with so many benefits, including companionship and emotional support, they can also open you up to some dangers like financial abuse. Financial abuse in relationships involves the control, manipulation, or exploitation of a partner’s economic resources to gain power or control over them. 

Financial abuse can occur in several types of relationships, including marriages, parental or familial relationships, and even conservatorships. However, financial abuse is often an attendant problem of domestic abuse, with research indicating that it occurs in 99% of domestic violence cases.

What Is Financial Abuse?

Financial abuse, also known as economic abuse, is the illegal and unauthorized withholding of a person’s money or financial resources to diminish their capacity to support themselves and ultimately control them. It can happen to anyone.

While financial abuse is a form of domestic abuse, it is distinct from other forms like physical, sexual, or emotional abuse, which involves causing physical or emotional harm to a partner. In contrast, financial abuse involves the use of money and resources to gain power over a partner.However, financial abuse can be just as damaging as physical or emotional abuse.

Financial abuse may take different forms. It could involve the control of a partner’s spending - this can be done by taking control of their bank accounts. An abusive individual may also withhold money from their partner, or prevent them from working. Whatever presentation it might take, the ultimate goal of a financially abusive partner is to gain control over their spouse or family member. 

What Constitutes Financial Abuse?

There are so many ways that financial abuse can be carried out. These are some of the typical behaviors related to this kind of abuse:

• Accumulating debt on shared accounts or joint credit cards to impoverish them
• Dictating how all household income is spent
• Denying a family member or partner access to money so they can’t afford basic expenses like food or medicine
• Destroying, damaging, or stealing a family member or partner’s property
• Ensuring that a family member or partner is unable to perform at work or complete work-related tasks
• Filing fraudulent insurance claims by exaggerating or making up incidents
• Forcing a family member or partner to change their will
• Forcing a family member or partner to work in a family business without compensation
• Forging a family member or partner’s signature on financial documents
• Gambling away a family member or partner’s finances
• Making a family member or partner take out a second credit card
• Making a family member or partner submit a Social Security claim against their will
• Misusing a power of attorney
• Not giving a family member or partner access to their bank accounts
• Preventing a family member from getting a job or going to work
• Refusing to work or contribute to the household income
• Selling a family member or partner’s possessions without permission
• Stalking or harassing a family member or partner’s colleagues
• Stopping a family member or partner from studying or bettering themselves to advance their career
• Taking money out of a family member or partner’s pension
• Using a family member or partner as a guarantor or obtaining a loan in their name
• Withholding financial support like child support payments

Financial Abuse in Marriage 

This kind of abuse occurs when one spouse exerts financial power and control over the other. When it occurs in marriages, financial abuse can be complicated as it often involves shared finances. It might also be difficult to spot if the victim does not speak up or you don’t know what to look for.

It could present itself as a situation where a spouse creates the perfect conditions for their significant other to be perpetually dependent on them financially. This may be done through impoverishment - stealing their credit cards, selling their possessions, accruing debt in their name, or limiting their ability to work, to name a few. It is a type of domestic abuse that has serious and even long-lasting implications.

Signs of Financial Abuse

The signs of financial abuse might be subtle and hard to detect, especially in marriages, where both partners are often financially tied. It is important to note that financial abuse hardly happens in isolation - typically, it occurs simultaneously with other forms of domestic abuse and is common in a toxic marriage. Here are some common signs of financial abuse in marriage:

• A spouse is displeased with spending that benefits their partner
• A spouse intensely monitors their partner’s spending
• A spouse denies their significant other access to their money
• A spouse demands repayment for any money they spend on their partner
• A spouse gives the partner an allowance, typically a small amount that is not sufficient
• A spouse trivializes the financial concerns of the significant other
• A spouse does not allow their partner to have a job, especially outside the family business
• A spouse hides financial information from their significant other
• A spouse manipulates their partner into signing loans or partnership agreement

Control Over Spending

Controlling spending can be done in different ways. A spouse might seek to control every cent that is spent in the household. They might implement a cap on spending for a particular duration of time, often allowing a very small amount of money that is not reasonably sufficient for their partner to get essential things. They might also overly monitor their partner's spending, often devising a way to punish them or causing them shame or guilt for spending. Such a spouse may have a double standard for themselves and encourage their partner to feel that there is a limited amount to be spent and that frugality is therefore necessary.

Preventing Employment or Career Advancement

To limit their partner's access to money, a spouse might prevent them from getting a job, either by physical intimidation, gaslighting, threat, or emotional manipulation. They might try to impact their partner's ability to perform at work or complete tasks. Such abusive spouses may also stalk or harass their partner's colleagues or embarrass or diminish their partner in front of these colleagues. They may also prevent them from studying or improving themselves to advance their career.

Withholding Money or Access to Funds

An abusive spouse may limit their partner's access to money by restricting them from having bank accounts, credit cards, or checkbooks. They may also accumulate debt on their joint account or destroy their possessions. Such abusive spouses may refuse to contribute financially to the household or gamble away their partner's money.

Creating Debt or Financial Dependence

One of the ways financially abusive spouses gain control over their partners is to put them in debt. This might entail forcing the partner to take out a second credit card, take out loans in their name, or be the guarantor on a loan. They may file fraudulent insurance claims against the victim, take out money from their pension or savings, or misuse their power of attorney. Abusive spouses are also not above forcing their partner to change their will, forging their signature on financial documents, or compelling them to work without pay.

The Impact of Financial Abuse

The impact of financial abuse does not just stop at the victim's ability to make money or meet their financial needs. It can also take an emotional, psychological, and physical toll on the abused partner and these could have far-reaching and long-lasting effects. Beyond the economic implications of financial abuse, including being unable to get out of debt or generate wealth independently, such abuse and its complications can lead to isolation, depression, and lower self-esteem. 

Emotional and Psychological Impact

Financial abuse can have a wide range of emotional or psychological repercussions. Victims can suffer from low self-esteem, feelings of powerlessness or humiliation, and inability to seek help due to prolonged isolation and dependency. All these can add up to make it harder for victims to leave the abusive relationship or make anything of themselves. Even after leaving such abusive situations, victims still have an increased risk of mental health conditions such as depression, anxiety, panic disorder, eating disorders, PTSD, and CPTSD.

Long-Term Financial Consequences

Living with a financially abusive partner can be extremely devastating, but once the victim leaves the abusive relationship, the financial consequences often continue. The abused partner often faces long-term consequences, such as damaged credit, financial instability, and the challenges of rebuilding after escaping the relationship. Many victims may continue to live in poverty, work longer hours, and retire later than they ought to. The careers of such victims may be severely affected for a long time, if not permanently. They might experience housing issues, such as not being able to pay their rent on time or in extreme cases, becoming unhoused. It could also mean financial problems for the victim’s children.

Social and Relationship Consequences

Abusers typically shut off their victims from friends, relatives, and support systems that could provide them with physical, emotional, or financial support. This can lead to social isolation, strained relationships with friends or family, and a lack of understanding from those support systems. Victims may find it hard or even impossible to leave such abusive environments or relationships, especially if they lack the resources to secure housing, transportation, or legal aid. This opens them up to all forms of domestic abuse and puts them in danger of losing their lives.

Preventing Financial Abuse in Relationships

Financial abuse, like most forms of domestic abuse, is hard to get out of because most victims are not aware of their options. However, strategies like staying financially independent, maintaining open communication about finances, and educating yourself on what constitutes financial abuse can help you prevent such abuse in the first place.

Financial Education and Awareness

Financial literacy is important in preventing financial abuse. This ensures that you have the requisite knowledge and ability to use financial management techniques to make wise choices and safeguard yourself from economically abusive arrangements. Understanding how to plan financially, manage debt, and calculate interest will help you quickly determine when something is financially amiss in your relationship.

You can get financial education by:

• Enrolling in a free personal finance or financial planning course at a local community center or social services organization, or taking one online.
• Following financial writers, planners, and advisors on social media.
• Learning about investment, financial planning, and personal finance.
• Listening to podcasts about money and financial management.
• Speak with a personal banker or financial planner at your bank or credit union to find out more about the services and programs they offer. 

Setting Boundaries and Financial Independence

Setting boundaries and maintaining some level of financial independence in relationships can help you avoid control or manipulation. Abusers typically use financial control as a means of exerting power, so having access to your money, as well as being gainfully employed, can make it harder for such abuse to happen to you. 

To become financially independent, you must understand your current financial situation by taking stock of all your assets and liabilities. Then set specific, achievable financial goals. Ensure you have a budget so that you can track your income and expenses, identify areas where you should cut costs, and ensure you are not living above your means. Also, maintain a good credit score and do not get into serious debt. Lastly, aim to have an emergency fund that is worth at least three to six months’ worth of living expenses. 

One tactic used by abusers to keep victims in abusive relationships is financial abuse. Recognizing, understanding, and seeking professional help for financial abuse in relationships is extremely important in escaping such a toxic situation. If you are in a financially abusive relationship, you should seek help and take steps toward financial independence.