Financial abuse can take many forms and is often used in order to dominate, control, and exploit the financial resources of another person. It can include borrowing money from a partner and not reimbursing, expecting them to cover most of the expenses placing them in financial hardship, or preventing them from having financial autonomy within the relationship as a way to control the partner from leaving. Financial abuse is often a way for an abuser to gain power and limitation over their partner, sometimes without their partner’s awareness. This type of abuse affects people regardless of gender, financial status, or age and can have lasting repercussions.
Recognizing financial abuse begins by being able to differentiate between financial decisions made out of affection and support, versus financial domination and exploitation. With knowledge, understanding, and setting financial boundaries, financial abuse can be prevented as much as possible.
Here are 4 Signs To Recognize Financial Exploitation:
1. Exploiting Financial Resources
Exploiting financial resources in a relationship can be and often is a form of financial abuse. It involves activities such as misusing financial resources with the purpose of gaining an unfair advantage within the relationship, swaying decisions in their favor, expecting a partner to cover all shared expenses, or destroying their partner’s credit history.
Taking advantage of financial resources can also be seen when controlling a partner’s financial decisions or forbidding a partner to use their own money without permission. It can lead to serious economic harm to a partner and is frequently seen in relationships where there is an imbalance in the connection due to financial resources or personality.
2. Interfering With A Partner's Career Choices
Interfering with a partner’s career choice in a relationship is another form of financial abuse, particularly when one partner dominates the finances. This financial control can take many forms, undermining their talents or skills, sabotaging their partner’s career so they are unable to maintain financial independence, influencing them to make decisions that conflict with their own financial well-being, or constantly contacting you during business hours to prevent professional growth. A partner may even go as far as hiding their partner’s car keys, turning off their morning alarm for an important meeting, or dictating how they run their business.
An unhealthy partner will intentionally try to destroy their partner’s professional relationships or opportunities to prevent them from achieving financial success out of jealousy, envy, or control. Regardless of the amount of money involved between partners, financial abuse in a relationship can have long-lasting negative effects on the impacted partner including decreased self-esteem, financial hardship, and potential mental health problems.
3. Punishing A Partner For Purchases
Punishing a partner for financial decisions is the third form of financial abuse we hear about and should not be tolerated in any kind of relationship. Making joint financial decisions require communication, collaboration, mutual respect, and trust in order to be successful. No one should feel like their financial autonomy is being jeopardized or that they have to justify their financial choices if it is within the couple’s budget or one’s own personal means. However, it is important to consider the financial well-being of both parties involved when making life-changing financial decisions, like buying a car or home.
Putting financial pressure on a partner can be very damaging to a relationship if they constantly feel criticized or have to pull all the financial weight. It might start out as belittling comments on purchases made, withholding the ability to make purchases, or trying to get one person to pay for everything. Financial control is never acceptable in any stage of the relationship, but especially in a romantic partnership where both individuals will need to remain mutual respect in their financial decisions and rights.
4. Controlling Access To Shared Accounts and Assets
Controlling access to shared funds and assets in a relationship can be an issue, if left unchecked, and can have serious financial repercussions. Such financial abuse often involves an abuser using a partner’s financial resources and/or controlling access to financial information without permission or without engaging in mutually agreed financial decisions.
It is important for both people in a relationship to talk openly about their financial concerns, how accounts will be managed, what types of budgets are needed, and that both parties are aware of the financial situation at all times. This openness would ideally extend to other members of the couple’s financial network (such as financial advisors or family businesses). Taking these proactive steps could help prevent financial abuse from occurring in a relationship and create greater financial stability for those involved.
To protect against financial abuse, it is best to establish early on how shared financials will be managed, how income and resources will be allocated for savings or investments, and how expenses will be divided - if necessary or once living together and sharing expenses. Ultimately, being transparent and honest about financial matters is key for any successful relationship.
Need more assistance on how to establish financial boundaries to manage a successful relationship with a partner or business? Set up a discovery call today!