Financial abuse is a form of domestic abuse where one partner uses money and financial resources to exert control and power over the other. This insidious form of abuse is often overlooked but can have devastating impacts on the victim’s independence and well-being. Financial abuse can occur during a relationship and persist even after separation, creating significant barriers for the victim to leave and rebuild their life.
Understanding Financial Abuse in Relationships
According to UK charity, Surviving Economic Abuse, one in every five women in the UK has experienced financial abuse by a current or former partner. It typically occurs alongside other forms of domestic abuse, such as coercive control.
During a marriage or partnership, financial abuse can manifest in numerous ways:
- Restricting Access to Bank Accounts: An abuser may keep sole control of the finances, preventing their partner from accessing money or making financial decisions. For instance, some victims may have to ask for money every time they need to buy groceries or clothes for their children. One woman shared with me how she needed to ask permission every time she needed formula milk for their baby. This level of control leaves the victim feeling utterly powerless and dependent.
- Controlling Household Finances: This might involve giving the victim an allowance and monitoring every penny spent. Some victims may have to follow a strict weekly budget and provide receipts for everything they buy. Any deviation from the budget could result in severe consequences, such as withholding money for basic necessities. My husband would tell me to spend less on the food bills. Meanwhile, he would spend large amounts of money on his personal hobbies, such as remote control cars and model boats.
- Stealing Money or Assets: Abusers might secretly take out several credit cards in their partner’s name and max them out, leaving the partner with enormous debt. This form of financial sabotage can destroy the victim’s credit score and financial stability.
- Forcing Partners to Hand Over Paychecks: Some victims work full-time but never see a cent of their earnings because their abuser demands they deposit their paycheck into the abuser’s account. This leaves the victim with no money of their own and completely dependent on the abuser for any financial needs.
- Sabotaging Work Opportunities: Abusers may prevent their partners from going to work or advancing in their careers. When the abuse extends beyond finances to include control over all economic resources and opportunities, it is referred to as economic abuse. One woman reported to me that her husband threw a mug of coffee all over her clothes just as she was leaving for a job interview. Some victims may be forced to stay home to cater to their abuser’s needs, causing them to miss important meetings and jeopardize their job security.
- Running Up Debt on Joint Accounts: Abusers may run up large amounts of debt on joint accounts and take out loans in their partner’s name. These actions leave the victim with financial burdens that are difficult to escape.
- Refusing to Work or Contribute Financially: Some abusers refuse to get a job and insist that their partner support them both, while they control how the household income is spent, leaving the victim with no financial autonomy.
- Forcing Partners to Commit Financial Fraud: In some extreme cases, abusers might coerce their partners into signing fraudulent tax returns or other illegal financial documents, leaving the victim to face potential legal consequences.
- Limiting Access to Financial Information: The abuser might handle all the bills, investments, and banking, keeping the victim in the dark about their financial situation. Some victims are left unaware of their financial standing and completely dependent on the abuser. When I asked my then-husband for access to our accounts, he told me I had to ‘earn’ that right. He said I needed to prove my responsibility by regularly updating my phone and computer, and he would conduct weekly checks to ensure I was doing so.
- Reckless Spending: Abusers may engage in reckless spending on gambling, alcohol, drugs, or have a spending addiction, depleting shared resources and leaving the victim financially insecure and stressed about covering basic needs. My ex-husband lost all our business savings to a cryptocurrency scam, despite my warnings. He would also spend excessively whenever he was stressed, ordering endless gadgets, tools, and electronics.
The methods of financial abuse keep victims trapped because they lack the financial means to leave and support themselves. This is particularly challenging when children are involved. A parent may stay in an abusive relationship to ensure their children have a roof over their heads and food on the table. Without access to money, victims often feel they have no way out.
Financial Abuse Post-Separation
Financial abuse doesn’t necessarily end when the relationship does. Many abusers continue their manipulation by hiding assets during divorce proceedings. For example, they might transfer money to secret accounts and undervalue shared assets to reduce the victim’s share of the settlement, leaving them financially vulnerable.
Exhausting the partner financially through legal abuse is another tactic. An abuser might drag out divorce proceedings, file frivolous lawsuits, or constantly change custody arrangements to rack up legal fees. Many victims find themselves spending thousands on legal fees fighting relentless court battles, draining their savings and causing immense stress.
Refusing financial support for children is another method. After separation, some abusers refuse to pay child support, or they work cash-in-hand jobs and underreport their income to reduce payments. They do this knowing it will strain the victim’s finances and affect their ability to care for the children.
Combatting Financial Abuse
Addressing financial abuse requires action at multiple levels. At the government level, stricter laws and regulations are needed to protect victims. Policies that ensure fair distribution of assets during divorce and stronger enforcement of child support payments can provide significant relief.
In a landmark announcement earlier this year, the UK Home Office unveiled a new initiative to provide financial aid to victims of domestic abuse, aiming to offer them a safe escape from harmful situations. As of January 31, 2024, domestic abuse victims can avail of £500 to cover emergency expenses when they leave an abusive relationship. They can also apply for a one-time payment of up to £2,500 to get them started in establishing an independent future.
In Australia, the government has committed $5.1 million over five years to study non-compliance and how to help parents if private financial arrangements break down. This investment aims to ensure that compliance with child support payments is strictly enforced.
Socially, increasing awareness about financial abuse is crucial. Educational programs can help people recognize the signs and understand their rights. Support groups and financial counseling services for survivors can provide the necessary tools to regain financial independence.
The Centre for Women’s Economic Safety in Australia offers free Money Clinics for women experiencing financial abuse, who are concerned about their finances in the context of domestic violence. In the UK, Surviving Economic Abuse works in partnership with frontline organizations that directly support victim-survivors so they can identify and respond to economic abuse.
On a personal level, victims can take steps to protect themselves. Keeping copies of financial documents, maintaining a secret bank account, and seeking legal advice can help. It’s also important to build a support network of friends, family, and professionals who can provide assistance and guidance.
Conclusion
Financial abuse is a powerful tool used by abusers to control and manipulate their partners, leaving lasting impacts on their lives. Recognizing the signs and understanding the various methods used is the first step in combatting this form of abuse. Through collective efforts at the governmental, social, and personal levels, we can provide victims with the resources and support they need to escape and rebuild their lives.
Featured image: Financial abuse. Source: Lightfield Studios / Adobe Stock.
