Seven Signs of Financial Abuse and How to Address It

signs of financial abuse

Financial abuse is one of many types of abuse one can experience in a relationship. Though it does not produce visible wounds, the effect of this mistreatment can affect people for many years and hinder them from using money in a healthy way. Abuse of any kind is unacceptable, and when we recognize the signs of financial abuse (it’s not always immediately clear), action must be taken to rectify it.

What is Financial Abuse?

I will define it as simply as I can: Financial abuse is improper deprivation of knowledge about or decision-making power over money.

Unlike certain types of abuse, financial abuse is often not visible to others. Sometimes, it is not even seen by the one suffering from the abuse. The victim can be of either gender in any type of close relationship, though usually this happens within a marriage. (I will use marriage as an example, but the principle can apply to other relationships as well).

For those out there who are wondering if they are being financially abused, here are some common things that happen in these situations.

1. Having Money Hidden From You

When you have a right to access or use money in a marriage, your partner keeping you from that money is improper. A marriage is more than a business arrangement. It is a sacred covenant between two souls who join themselves in all ways, especially financially. Both partners have to know where everything stands for there to be optimal functionality.

An old Anglican wedding vow reads as:

With this Ring I thee wed, with my body I thee worship, and with all my worldly goods I thee endow: In the name of the Father, and of the Son, and of the Holy Ghost. Amen.

When the two become one, both partners must be able to access the money. One partner does not have an exclusive right to money, especially not money that is kept secretly.

2. Having Debt Hidden From You

Just as hiding money is one sign of financial abuse, hiding debt is also. What sometimes happens is that one spouse is hiding an addiction (for example, gambling) and is racking up debts in secret to cover it up. But as with many addictions, the craving often overcomes our better sense and drives us to mistreat those closest to us.

Keeping secret debt, whether or not it is addiction related, is a symptom of either a lack of trust, or a desire for control. Debt cannot be hidden in a healthy relationship. Both parties must know what accounts are open, what the balances are, and mutually agree on how to handle them.

3. Having No Say in Financial Decisions

There is often one spouse who tends to handle the everyday aspects of finance (the administrator). It is easy for this person to turn into a financial tyrant who does not allow the other to have a say in money decisions. There may be many rationalizations for this, including past impulsive behaviors or a more generalized fear; perhaps even some resentment or desire to hurt the other person.

Whatever the motivation, one spouse taking 100% control of the money (outside extreme circumstances where there may be some disability) is not going to end well for either of them. The controlling spouse will have too much of a burden to carry sustainably, and the controlled spouse will often become bitter and resentful, leading to even more impulsive actions later on as a way to be heard.

4. Being Berated for Small Financial Errors

Sometimes things happen. We overestimate, underestimate, make the wrong purchase, etc. This is a part of being human. In a financially abusive situation, when these things happen, the abuser will often become angry with and berate the abused. Even the smallest things can spark such a reaction, like failing to use a coupon or getting the wrong size of a particular item.

The abused person will sometimes refrain from making decisions in order to prevent such treatment. After all, if you’re not making any decisions, there won’t be anything for the abuser to be mad about, right? It may seem like a solution, but this most certainly will not get to the root of the problem.  

5. Not Being Allowed to Spend Anything on Yourself

There are ultimately three things we can do with money: give, save, and spend. We need to learn how to do all three in appropriate ratios. But if an abusive partner is not allowing you to spend anything at all, over your constant objections, that is another sign of financial abuse.

When working with my coaching clients, I will sometimes suggest each person having a bit of their own spending money throughout the month. Especially when working the debt snowball and having a large amount of debt to clean up, a few little pleasures here and there can make the trip slightly less unbearable. These small bits of pocket money are safety valves in that process.

But especially when one is debt-free, having some enjoyment with money, for both spouses, is important. Withholding that from the other spouse is another sign of financial abuse.

6. Not Having Anything Held in Your Name

In a financially abusive situation, one spouse often has his or her name on all possessions, and does not allow the other to have his or her name there as well. Sometimes there can be practical reasons for having cars titled in one name (for example, insurance discounts). But if only one spouse is on the deed to a house, the bank accounts, life insurance policies, etc., something is wrong.

The abusive spouse may be trying to make leaving difficult for the abused spouse. After all, if the abused does not have any assets in his or her name, how can there be any leaving the situation? But the more general principle is that spouses need to be joined on major assets, especially on home deeds, leases, and bank accounts.

7. Fearing That Any Money You Do Have May Be Taken

If there is a fear of your spouse taking any money you happen to get, that’s an immediate red flag. What is driving that fear? Has that happened before? If your spouse sees that you have a bit of extra cash on hand, how does he or she usually respond?

If the response is effectively “I’ll be taking that,” that is an indication of financial abuse. When one spouse happens to find a $20 bill somewhere, or helps someone out for a bit of cash, it’s appropriate for that spouse to have a say in what to do with it.

Fun money? Totally acceptable. Extra money for savings or debt payments? Absolutely. But both spouses have to agree on that, not one of them taking away from the other.

How to Address Financial Abuse

If you see the signs of financial abuse in your relationship, I strongly recommend seeking out a counselor as soon as possible. There can be a variety of ways that the abuse manifests, and you can get a proper diagnosis from a trained professional. In the midst of financial abuse, there may be other forms of abuse going on, and speaking with a counselor can help you to recognize them and then plot out a course of action.

One thing that is critical when dealing with an abusive situation is to protect yourself with boundaries. It is frequently difficult for abused people to define and assert boundaries. There are often many years of being worn down at issue, with little willpower and energy left to stand up and say “No.”

But that’s what must be done to stop the abuse. An abuser does not like being told no. An abuser will either lash out or try to rationalize the abusive treatment to skirt responsibility. And that’s exactly what cannot be allowed. The abuser must be held accountable for improper treatment, and there must be change moving forward.

To help assert your boundaries, I recommend Dr. Henry Cloud’s book Boundaries. He guides readers through the process of identifying areas of weakness and developing a plan to gather strength and enforce what must be enforced. It is a difficult book, but it has helped many thousands of people regain control over their lives.

After Healing from Financial Abuse

For those who have repaired their relationship, but still need help with the everyday aspects of money, I can help. I will show each of you how to connect with the other on your financial goals and give you practical things that will bring you closer together on your journey.

Set up a free Discovery Session today to see how I can help you create something better. If you have questions, set up a time on my calendar for us to chat first. You can do this, and I’ll show you how.

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