Lynda Moore explores how to identify financial abuse in any personal relationship, and what you can do about it

Talking about any type of abuse is difficult and when we think about financial abuse it often conjures up images of older people exploited by overbearing relatives or caregivers, a scenario frequently reported in the media.  However, a less visible, but equally grave form of financial abuse affects more often intelligent women (men can be victims as well), leaving them destitute after their partners exploit them financially.

Understanding physical abuse is straightforward, evident through visible injuries and physical pain.  Financial abuse, by contrast, operates more subtly, making it more challenging for victims to recognise they are being exploited.  I use the analogy of the lobster in the pot, the water gets hotter and hotter and it’s too late by the time the lobster realises he’s dinner.

The change in behaviour can take years before being noticed. Behaviours that may have seemed endearing early in the relationship (like your partner managing all the money so you don’t have to think about it) can become abuse further down the track.

Both emotional and financial abuse, can inflict long-lasting damage.  Recovering emotionally and financially from such abuse often requires a long time. Trust needs to be rebuilt, confidence in your own ability to manage money, and the financial fallout on your long term financial future needs to be worked through as well.

This is why communication between couples is so important.  It promotes transparency and sharing financial responsibility in the household.  Poor communication about money, often considered a taboo subject, even among couples, can conceal potential financial abuse under the guise of care and affection.  Trusting your intuition when uncomfortable with financial dynamics can reveal underlying issues. 

What are some types of financial abuse?

Controlling finances
This is one of the most common forms. One partner exerts control over the other partners finances.  This can include controlling access to bank accounts, withholding money, or dictating how money should be spent.

Forbidding employment or education
This is a way of limiting financial independence.  If you don’t earn your own money, you have to ask for it from your partner.

Sabotaging financial stability
Incurring debt in the partners name, that they either don’t know about, or aren’t able to pay from their own means. Intentionally causing them to lose their job. Ruining the credit rating so they can’t get credit which may be needed if they want to leave the relationship.

Isolation
s with other forms of abuse, the abuser often isolates their partner from friends, family and support networks, making it harder for the victim to seek help or even realise how hot the water is getting (going back to my lobster analogy).

Manipulative behaviour
There are many different types of behaviour here, anything from guilt, threats, or coercion to maintain control over the finances.  An example is the abuser threatening to leave or withhold financial support it the victim doesn’t comply.

Now you know what financial abuse looks like, what can you do about it?

Recognise that it is happening
Acknowledge that it is happening, and it isn’t your fault. This sound easy, but it is the hardest step, particularly if you have been in this situation for a long time.  I spoke to a woman who after over 25 years of marriage and financial abuse was still in denial, and trying to fix the relationship even though her rational brain could see the abuse for what it was, her emotions and feelings of being a failure were keeping her stuck.

Seek Support
If there is financial abuse, in a high number of cases, there is also other abuse as well.  Reach out to friends, family or professionals for support.  This may include counsellors, Financial Therapists or domestic violence hotlines.  Or it could be the stranger in the street who asks you if you are OK.

Create a Safety Plan
This is the one time that I do endorse financial infidelity as an option. See if you can start to stash away some money in a secret account.  Look for documents, find any information you can about your financial position, if you are a joint owner of property or are included in any loan documents, then you can ask questions of the lender.  Find a safe place to go should you need to leave suddenly.

Legal Options
If you want to leave the relationship, get advice early so you can prepare as much as possible before you leave.  If there are other forms of abuse, you may need other legal advice around protection orders, custody of children.  Information is power, and the more you start to learn, the more empowered you will start to feel.

Financial empowerment
Managing money is a learned skill, so go and learn how to do it. Open bank accounts in your own name, see if you can obtain credit yourself.  The biggest change I notice in my clients going through separation is when the partner who has had very little control over their own finances gains that control, that seems to be when they see the light at the end of the tunnel.

Therapy and Counselling.
Financial abuse is abuse, so you will need time to recover and heal.  It will take time to rebuild your self-esteem and confidence and to learn to trust again if you move into a new relationship.

If you have any concerns early in the relationship about financial behaviour, or, if you are feeling pressured to merge your finances before you feel ready, this is a red flag.  It’s not an easy conversation, and it may not signal the relationship will end, it’s about putting financial boundaries and expectations in place early on before they escalate.

Communication is key.  If you feel you can’t do it yourself, find a professional to help.  Couples who talk about money easily become financially stronger as a team, this is the team you want to be in.

Lynda Moore is a Money Mentalist coach and New Zealand’s only certified New Money Story® mentor. Lynda helps you understand why you do the things you do with your money, when we all know we should spend less than we earn. You can contact her here.