Financial Abuse
Any tool that can be used to trap, intimidate, devalue, dominate, enslave, torment, disempower, threaten, or weaken another individual is capable of becoming a tool of abuse.
Society easily recognizes physical violence when physical strength and physical tools (fists, hands, bodies) perpetrate physical abuse. Most individuals are less savvy about psychological or emotional abuse since the tools are typically associated with words, affection, silence, or availability– which each become manipulatively used to intimidate, devalue, dominate, enslave, torment, etc.
Perhaps, more than ever, sexual abuse is better understood with the advent of #metoo and decades of proclaiming rape and molestations now akin to unwanted sexual advances and pressure.
Financial abuse uses money and all it affords to trap, intimidate, disempower, enslave, dominate (etc.) other individuals. Yet, money, which is always and inevitably, a definer of power differentials, is too commonly accepted as a power tool without regard to its ability to become a tool of abusiveness.
Financial abuse is evident in workplaces, political arenas, legal combats, and in domestic relationships. Any time money is used to force another to behave a certain way, financial abuse is evident.
Financial abuse, as a term, will need to be digested by society with very deliberate conscious-raising efforts since financial abuse is actually more accepted and also more insidious in all financial power-differential situations. Subordinates can be forced to act certain ways when dominators (bosses, leaders, parents, earning partners) threaten withholding funds necessary for survival or daily needs. Financial abuse, in this case, is manipulative and threatening. We normalize such. We often accept such inequalities by saying “Well, he’s the boss.” “I’m paid to do his/her bidding.” “I don’t have a choice; it’s my job and I need the money.” “Well, he/she’s the one earning the money.” These statements are so common, we socially accept them as normative and a fact of life. We fail to see the insidious presence of financial abuse.
Once rape was considered the fault of the victim who must have dressed provocatively or been stupidly in the wrong place. This is, of course, ridiculous and simply wrong to blame a victim.
Once wives were never allowed to accuse her husband of rape since sex, in any form, was consensual by the definition of marriage. No way. (Yet there are still arguments about this.)
Once a child could be bruised and bleeding after a “spanking” and such was considered parental discipline. Punishments by parents could be in any form since, by rights, parents were given Cart Blanche reign over a child’s upbringing.
These attitudes are rare in our twenty-first-century mindset within most countries and cultures. But these abuses were once considered socially accepted perspectives and tolerated actions.
In a similar fashion, most financial abuses are socially tolerated, hidden under unconscious acceptance that individuals with money have more rights and freedoms than individuals without money. Such attitudes will likely be overturned when the large majority of people stop accepting maltreatment under any circumstances (that include money) including racism, sexism, dogmatism, healthcare, taxes, and even political combat.
Meanwhile, let’s make a dent in the unacceptable norms surrounding power-differentials of money. To do so, we will define clearly and describe generally what comprises financial abuse and how to spot financial abuse in domestic relationships that involves couples. This will be our narrower focus for this chapter. Examining financial abuse in domestic relationships will help us later pull back and see how financial abuse is accepted matter-of-factly in business, law-making and law-enforcement, politics and government, parenting, racism, and sexism.
Face it, we must. Socio-economic differences are the essential swamplands for financial abuses. We are far too accepting of such swamplands because we organize almost everything we do based upon financial differences. We live with “have and have-nots” norms the way we breathe air. We actually organize our lives around such seeming “inevitabilities.” To break our attachment to such unacceptable norms, let’s begin with domestic partnerships and how money becomes a weapon, an abusive weapon within domestic situations.
Domestic partners, legally married partners, are by law combining their financial needs and resources together. Pragmatically finances are also combined to support living together, raising dependents together, organizing daily routines together. In California, which is where I practice as a Clinical Psychologist and Marriage, Family & Child Therapist, all money and assets earned after the onset of marriage is considered conjoint. Assets intermingled into the marital routines is likely to be conjoint as well, lost in the blending of funds. Unless defined ahead of time in legal documents (such as prenuptial agreements, which I highly recommend), any assets that produce financial growth after the marriage license is obtained, belongs to both partners equally (supposedly).
However, there is tremendous ambiguity when the financial ability to earn money is enhanced by 1) education, 2) occupational experience, 3) social status, and 4) accumulated value accrued over time. For example, if a husband’s medical degree is financed by his wife during marriage, we clearly can deduce that he has increased his social status, his accumulated value, and his occupational experience because of the education which was financed by his employed wife’s income. He is now more capable of financial success and will create socioeconomic advances which his secretary or waitress wife does not possess. She will only benefit from this arrangement if 1) her husband supports her comparable educational advancements or if 2) her husband equalizes the financial benefits by extending such freely and evenly with his wife.
Reality, however, sets-in way too often. Spouses supporting their medical student partner or their law-degree seeking partner often divorce without any financial remuneration of any sort after the education is done. This occurs about 70% of the time in my state. Family courts do NOT compensate the disadvantaged spouse when the divorce occurs during or shortly after the education is complete. Short-term marriages might see a percentage of the educated spouses’ last few years of income (very low for the striving and financed educated spouse) and definitely does NOT consider the income-potential that is likely to ensue as relevant to establishing forward-tispousal support. This is only one example of how financial inequality creeps into marital relationships and cause a socially accepted swampland for financial abuse.
Of course, two love-birds may have committed to their future and lovingly supported the one spouse’s education with blissful trust only to be saddened by their loss of love leading to inevitable divorce after graduation.
But it is also possible, that one individual took advantage of the supportive hard-working spouse who offered to financially support educational costs, sacrificially. Dumping that supportive spouse when the education is over may be strategic and is definitely a form of financial abuse that is NOT recognize by any court or law to date (to the best of my knowledge as of 2019). Consider also, that those high educational expenses are a shared financial debt which BOTH spouses must pay. Stinks to high heaven, doesn’t it.
Now let’s look at this situation within the context of Long-Term Marriages. Common scenario would include one spouse becoming educated and over time be accumulating value, status, experience, and financial career-based worth. The other spouse may be raising children (which is vastly underpaid and undervalued). The child-rearing parent is definitely not enhancing their high-level education, their economic value, their socioeconomic status, nor their personal financially careered-based potential worth.
In Family Courts or Divorce Courts, the child-rearing parent is provided half the length of the time of marriage for some measure of spousal support, only. This spousal support is not based on the forward-looking and obviously accumulated value, nor even obvious potential financial career-based worth of the other spouse. This spousal support is solely based upon annual income averaging of the past and maybe sustenance of lifestyle. The child-rearing parent is required also to become financially self-sufficient, (even sharing child-rearing costs equally) within a short duration of time and often without the benefit of financed higher-level education, without the benefit of accumulated value, without the added economic status in the workforce, and without a progressively built financial career-based worth. Moreover, the child-rearing parent is not valued at all, but instead punished for not earning income apart from raising children. Do you see any relationships that have prenuptial agreements wherein the child-rearing parent is decreed as earning an equal or more income to the rain-maker of the family? Do you ever see a pre-parenting agreement wherein a child-rearing parent who has a tough 24/7 job as a parent is valued at $200/hour or even $50/hour or even minimum wage? No.
As a consequence of these and other disparities in family economics, the child-rearing home engineer is distinctly vulnerable to financial abuse of certain types. Let me list them first.
- Devaluation of importance and therefore less respected in multiple ways leading to emotional, psychological, physical and sexual abuse, more often than we like to admit.
- Dependence upon money-producing partner and thus at the mercy of survival needs which subordinate them to forms of inhumane treatment including neglect, withholding, infidelity, physical violence, sexual misconduct, emotional devaluation, and psychological manipulation.
- Misappropriation of moneys by income-producing spouse who can hide, gamble, waste, withhold, or give away moneys because a) the child-rearing parent is too busy to notice, b) too busy to have time to track moneys, c) too dependent and subordinated to challenge for fear of consequence to self and children, d) too uneducated to recognize deceptions associated to gambling, waste, hiding or misdirecting.
- Deceptive use of financial resources wherein moneys are hidden in investments, savings, schemes, shelters, or “off-shore” covers, nested away– hidden when divorce occurs. This is a complex form of financial abuse that is rarely detected by an uneducated and often desperate spouse who have been trusting an intrinsically shrewd con-artist.
Child-rearing and being a home-engineer often does not include financial astuteness, but it should. Money management should be carefully monitored by both spouses, with every dime accounted for, and every investment and savings mutually agreed-upon and conjointly organized legally.
Regardless of this “should” however, the fact remains:
If you are not financially astute,
you are highly highly vulnerable to financial abuse.
What does a financial abuser look like?
It would be ideal if we could always spot a financial abuser but the shrewder they are, the more likely they are to deceive astutely. Their trails are covered. Their tales are woven. Their maneuvering is sly and covert.
Again, let me iterate, it would be best to never become financially vulnerable and to always be financially astute, whether you love and deeply trust someone or not. Since divorce is now between 50-70% likely to happen to you, and since marriage and divorce is always entangled with financial concerns and value, it is best to love deeply and trust only when you are educated and very proactively involved in financial matters.
Here are four signs (among many) of a Financial Abuser
- They look for the naïve.
In light of this warning, consider that one of the first signs of people who are financial abusers (deliberately) is their inclination to find a trusting, passive, and easily fooled partner who will avoid paying attention to finances. Abusive financial advisors and financial investors love having clients who are too busy to care and too uneducated to know. Government officials and business partners who are financial abusers, love gullible followers or passive investors. Beware of those who say, “Don’t worry your pretty little head about this; I’ll take care of this for you.”
- They seek to distract.
Second, financial abusers are like magicians. They will distract or mesmerize their partners. Their distractions may come in the form of fake diamonds, or beautiful flowers, or even urgent emergencies. They might capitalize on the highly complicated and all-consuming parental concerns or even medical complications or household chores. These certainly are built-in distractions. Sweet-talking mesmerizes too. However, condescending attitudes also mesmerize causing victims to feel too “dumb” to understand complicated economics. Sleight-of-hand tricks are hard to detect: In one hand, “here is all this money for remodeling and let’s take a big vacation,” might distract from even larger sums of money being stored in the Cayman Islands or Deutschbank hidden accounts.
- They create confusion and complications.
Making finances too confusing to explain, too complicated to unravel, too nuanced to clarify, or too divided to track are also tricks of financial abusers who wish to misuse funds or hide funds. If you have been told you are not smart enough or been told to “trust them” when money issues seem convoluted or odd, or if you have been left out of any financial decisions of any sort, chances are you are unknowingly being subjected to financial abuse. People are not afraid of disclosures, explanations, accurate accounting when they are honest. People do not try to “own” the right to manage your money if they are fair-minded (because in marriage all that money is yours too, ALL THAT MONEY IS YOURS TOO). People do not rely on confusing you in order to discourage you from being involved and becoming educated in financial matters. Instead, fair-minded partners would rather each partner be able to function independently in case of death or illness.
- They avoid your questions and hide financial documents.
If you haven’t seen your tax returns every year, your financial investment statements monthly, your bank account and deposits weekly, you are setting yourself up for financial abuse by anyone who is cunning enough to use avoidance and elusiveness as a means of misusing your moneys. If you “don’t know where all the money has gone” chances are it has gone away wrongly so. Do not organize your financial life blindly trusting anyone. Money corrupts as does power that is unchecked.
What are the indications that you have been financially abused?
We will end this current chapter with a list that is rather commonly provided on internet sites about financial abuse. This checklist is good but not comprehensive. Most sites who use comparable lists state that if even just one of these is evident, you are being warned that something is seriously not okay. So give these items serious contemplation.
This section below is copied from this URL https://www.verywellmind.com/financial-abuse-4155224
This article is worthy enough to be quoted in full – why bother saying it differently except I will add a few items to this comprehensive list. You’ll see that below.
Exploiting your resources: This occurs when a dating partner or spouse uses or controls the money you have earned or saved. Some examples of this exploitation include:
- Trying to control your use of or access to money you have earned or saved
- Using your assets for their personal benefit without asking
- Taking money or using credit cards without permission
- Borrowing money or making charges without repaying it
- Feeling entitled to your money or assets
- Demanding that you turn over your paycheck, passwords and credit cards
- Expecting you to pay for their bills or their obligations
- Using offers to help with your budget or financial decisions as a cover for gaining control over your finances
- Requiring you to bail him out of difficult financial situations
- Confiscating your paycheck or other sources of income
- Intercepting or opening your bank statements and other financial records
Interfering with your job: This occurs when a dating partner or spouse attempts to control your ability to earn money or gain assets. Some examples of job interference include:
- Criticizing and minimizing your job or choice of career
- Pressuring you to quit your job sometimes even using children as an excuse
- Telling you where you can and cannot work
- Sabotaging or not honoring your work responsibilities
- Harassing you at work by calling, texting, or stopping by
- Preventing you from working by hiding your keys, unhooking your car battery, taking your car without permission, or offering to babysit and then not showing up
Controlling shared assets and resources: This occurs when a dating partner or spouse has complete control over the money in the relationship and the victim has little or no access to what they need. Some examples include:
- Criticizing every financial decision, you make and reducing your freedom to plan or budget as a result
- Making large financial decisions without your input; unwilling to collaborate on finances
- Hiding or taking funds and putting them in a private account
- Insisting you share your income but refusing to share theirs
- Controlling the “purse strings” or establishing unrealistic limits or allowances for you
- Requiring you to account for every penny you spend (may even ask for receipts and change)
- Having a double standard when it comes to spending (they may spend money on entertainment, dining out and clothing but criticizes you when you make similar purchases)
- Withholding financial information such as account passwords, account numbers, investment information and so on
- Limiting your knowledge of your overall financial picture as a couple
- Withholding money from you and/or requiring you to ask for money
- Demanding that you ask permission before spending money but not consulting you when they make purchases
- Requiring that large, joint purchases be in their name only (such as car loans, mortgages, cell phones or apartment leases)
- Forcing you to sign financial documents without explanations
- Making threats to cut you off financially when you disagree
- Becoming enraged over money and then engaging in other forms of abuse like name-calling or physical violence
My added list:
Stealing your email passwords and your personal bank account passwords
Using your electronic signature without your permission
Establishing accounts in your name without your knowledge (credit cards, airplane mileage, bank accounts, loans)
Using your identity and credit score for purchases online or elsewise
Using your online credit cards on sites where your credit cards numbers are stored
Borrowing money from your family and friends for investments or easy living expenses
Okay, that is enough for this moment on this dreaded topic and this far-too-frequent happening in relationships.
Bottom line – don’t be naïve and don’t be ignorant. Money-management is actually a doable set of skills, and plenty of education is available that will help you become sanely savvy and out-of-the sites of a financial abuser who looks for the vulnerable to twist. And remember, partners change (for better or worse) and if you partner changes for the worse (yikes), you don’t want your naivety about money to be tempting them to financial abuse you too.
Here’s to personal empowerment!
Dr. Carol Francis
PS. This blog, chapter or article, is not intended to be legal advice as laws and states are always changing. Also, I am only looking at the laws from a family counselor perspective and the applications of laws are variable due to judgments and case law that simply is not the focus of this article. This is also not meant to be advice for your relationship specifically because naturally, this is a generic article to help you consider your situation. And perhaps your partner is awkward about money-talk and not intending to deceive you…think it through. Work it through. Be savvy. Finally, do seek professional and educated assistance. This is an educational article that is likely to be updated and maybe even corrected by more information coming in. So, be educated and don’t fail to research more on your own.