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Financial abuse is a form of domestic violence characterized by controlling, misleading or hurting another person via shared finances. This type of violence is more commonly experienced by women — and they may not even realize it’s happening. In today’s “Financially Savvy Female” column, we’re chatting with Carrie Schwab-Pomerantz, president of the Charles Schwab Foundation, about the warning signs you are in a financially abusive relationship and what to do if you are a victim of this type of violence.
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What does financial abuse entail?
Many people don’t recognize that financial abuse is a form of domestic violence, but in fact, nearly all victims of physical domestic abuse report that their partner also uses financial control as a weapon, and financial dependence is one of the main reasons people stay in abusive relationships. Financial abuse can be subtle and may come in many forms, ranging from forbidding someone to work and controlling all household finances, to running up large debts on joint accounts and even outright theft. For abusers, money is power. While young millennials are more common targets of financial abuse in new intimate relationships or friendships, senior citizens are especially vulnerable to having a relative, friend or caregiver steal money. If you strip someone of access to money, you also take away their ability to care for themselves or make decisions in their own best interests.
Read More: 41% of Women Don’t Have an Emergency Fund — Here’s Why That’s a Huge Issue
What are some warning signs that you are in a financially abusive relationship?
Some common warning signs include: one person taking complete charge of a victim’s finances, interfering with or prohibiting the victim from getting a job, paying the victim an allowance or stealing money from a victim’s savings account. Sometimes, financial abuse can take place slowly and over time. When this happens, it can be harder to recognize. Hiding purchases or taking small amounts of money over time from the victim are common tactics that are easily overlooked as well. The abuse can grow into more overt actions like forging checks, opening credit cards without the other person’s knowledge, hiding or withholding money, and using money as a power tactic.
Check Out: 6 Steps You Should Take To Increase Your Financial Confidence
If you see any of these red flags, what should you do to get out of this situation?
Financial literacy can be a powerful tool in helping both men and women leave abusive relationships. It can arm people of all economic backgrounds with money management skills to make informed financial decisions about their livelihoods. While financial literacy is not a cure for a potentially devastating and complicated array of financial crimes, it does represent a powerful aid in self-protection, and a path to a better future. It’s essential that each partner understand where the money is and have equal access to it. A situation in which one partner is controlling everything and keeping the other in the dark can be dangerous.
Financial abuse is a serious problem that may require some outside help. If you are a victim, it’s important that you make someone else aware of your situation. Talk to a trusted family member or friend about your relationship. If you’re in need of immediate support, I recommend contacting the National Domestic Violence Hotline at 1-800-799-7233.
GOBankingRates wants to empower women to take control of their finances. According to the latest stats, women hold $72 billion in private wealth — but fewer women than men consider themselves to be in “good” or “excellent” financial shape. Women are less likely to be investing and are more likely to have debt, and women are still being paid less than men overall. Our “Financially Savvy Female” column will explore the reasons behind these inequities and provide solutions to change them. We believe financial equality begins with financial literacy, so we’re providing tools and tips for women, by women to take control of their money and help them live a richer life.
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