Financial Abuse: The Dark Side of Money and Love

Love is clearly a powerful emotion. It can make even the most normal people do crazy things. Unfortunately, love can also be powerful enough to hide a person's dark side. That's why hundreds of people fail to see the reality of their bad relationships right away. A financially abusive relationship is just one of the countless bad situations that many people eventually find themselves in.

What exactly is financial abuse?

According to the National Network to End Domestic Violence (NNEDV), "financial abuse is a common tactic used by abusers to gain power and control in a relationship. The forms of financial abuse may be subtle or overt but in general, include tactics to conceal information, limit the victim’s access to assets, or reduce accessibility to the family finances."

We asked experts to share their insight into why financial abuse occurs, warning signs, and advice for recovery:

Why financial abuse occurs

Stephanie Nilva, Executive Director of Day One: "Financial abuse is one of many ways abusive partners attempt to control others. Creating financial dependence can isolate the victim and cause them to rely on the abusive partner more heavily. Without friends or family for support, the survivor has much more difficulty ending the abusive relationship. Sometimes there might be cultural or gender 'norms' about who is the wage-earner taken to an unhealthy level."

Ellie Thompson, CEO of Money Therapy: "Abuse really comes down to the abuser not feeling powerful within themselves. So, instead, they abuse other people to feel powerful. Financial abuse is the same as any other type of abuse but it is being used with money."

J. Hope Suis, Relationship Coach at Hope Boulevard: "Financial abuse is about power and control. One person needs to control every aspect of the relationship and money certainly is a huge factor in that. Also, they need the other person dependent on them to feel powerful. If they cannot purchase anything without checking in, or if they have no access to money, they must completely rely on the one with the power. This sets up a very unhealthy and one-sided relationship dynamic."

Kalen Omo, Personal Finance Coach and owner of Kalen Omo Financial Coaching: "My opinion is that financial abuse occurs because of pride or shame. When a single person is entrusted to take on the burden of managing the financial household, and things don't work out as expected, the first reaction is to try to fix it yourself. This leads to the beginnings of financial abuse."

David Bakke, Personal Finance Expert at Money Crashers: "Generally speaking, financial abuse occurs with people who at times experience levels of low self-esteem, or who more importantly have never managed their own finances and therefore won't recognize the signs. And then there's always the argument that emotion can overtake money as far as folks who feel too strongly about an individual to put a stop to the abuse."

Warning signs of financial abuse

Nilva: "Having a partner control the finances in a relationship, such as taking someone’s paycheck, forcing the other person to pay for things, forcing them to work or preventing them from working. One person in the relationship might keep all of the couple’s finances in their name. For young people, this might show up as manipulating a person around money, such as taking their MetroCard or money, destroying their property (such as a cell phone), or making them pay for everything."

Thompson: "Warning signs of financial abuse can show in the behavior from the person being abused. You may start to notice they are justifying every purchase they make even something as simple as basic needs. You may also notice they don't want (to) 'indulge' in normal activities such as going out to lunch, buying a new shirt, or purchasing a coffee. This behavior is different from someone who is simply cutting back on expenses. The person being abused might express a fear of getting in trouble instead of saving money."

Suis: "You should always have access to and control of your money. Obviously, in a marriage, there are combined accounts/bills and ideally one person handles the finances to avoid confusion, however, both parties should be able to view all transactions. Being kept in the dark, especially when you contribute, is a huge red flag. Discussions should be made on large purchases, but no one person should have to ask permission or turn in receipts for everyday items or purchases. It is also possible that someone will use your information and take out loans and make purchases without your knowledge. This is against the law and not just abuse of your trust."

Omo: "Some of the signs of financial abuse are couples with separate checking accounts and a lack of communication when it comes to money. These two are strong signs that there is a lack of trust between husband and wife to work together to tell their money where to go."

Bakke: "One sign of financial abuse is when your partner or significant other restricts your access to your own money or even credit. Another sign is when that individual uses your funds or money for their own purposes without asking permission. A third sign is when money is borrowed from you without asking. But there are others."

Financial abuse recovery

Nilva: "Counseling and support from peers can contribute to healing. Sometimes ending the relationship might be sufficient. A credit counselor or someone experienced with assisting survivors can help disentangle a couple’s finances or direct a survivor to victim compensation funds."

Thompson: "Recovering from financial abuse will take time but it can be overcome. The fact of the matter is that no one should have authority over your finances except you. Finding support groups in your community or online can be the first step to heal from your experience."

Omo: "Seeing a good financial coach that can address the money-related issues and, in some cases, marriage counseling to identify the root of the cause are good steps to take to recovery."

Bakke: "Get help. It doesn't matter from whom but get a third-party, uninvested individual so to speak, who can give you some straight talk. Get out of a relationship that involves financial abuse as well. From there, start with the basics of managing your own money, and try to learn how to avoid individuals who might attempt to exploit you."

Advice for those experiencing financial abuse

Nilva: "Financial abuse is one element of what could be a harmful relationship where violence or other forms of control are present. Getting therapeutic counseling can be useful in identifying boundaries and how to end any abusive relationship. Speaking to an attorney experienced with intimate partner violence can alert someone what, if any, other help might be available, such as getting an order of protection or potential criminal penalties for theft."

Thompson: "Financial abuse should not be tolerated in any form. An abuser will not stop their behavior and there is no begging or pleading that will get them to change. You need to change your situation whether that is a personal or business relationship. Use your skills to find a new job or new income opportunity. Visit sites like upwork.com or visit your local community center to find opportunities."

Suis: "If you are just in a relationship (not a marriage), then you need to find a way to get out. Unfortunately, having someone step up to handle everything seems like a blessing, but if you are out of the loop entirely and have no control over your money, that is not a healthy relationship. If you are in a marriage and the victim of financial abuse, the first step is to try to talk with your spouse. Calmly express your concerns and ask to have more of an active role in the bills and financial decisions. If this does not work, I suggest seeking outside counsel in order to protect your assets and decide your path going forward. If someone has unlawfully obtained money or loans in your name, then you should report this activity to law enforcement."

Omo: "My recommendation would be to meet with a financial coach to begin identifying the pain points related to a lack of trust regarding money. In some severe cases of financial abuse, such as financial infidelity, marriage counseling may be in order to address the root of the issue."

Bakke: "If you think you're experiencing financial abuse, reach out. It could be to anyone but the best bet is to do so through a family member or friend, or better yet, a financial counselor. You could even reach out to someone at your church you trust, who can point you in the right direction as far as other resources. Financial abuse is a serious problem, and the best thing you can do is to recognize it, then step up and get the help you need to make sure it never happens to you again. Empowerment is the key."

The bottom line

Financial abuse may be more common than you think, and it can cause lasting emotional and financial damage. It can impact everything from your credit score to the amount of money you have in your savings. Communicating with your significant other and/or seeking professional outside are two ways you can start addressing a financially abusive relationship.

Keep in mind that it's possible to miss seeing the signs of financial abuse, especially if you are blinded by the idea of a loving, new relationship. Although a person may seem like "the one" in the beginning, they may turn out to be the one controlling and restricting your financial agency if you're not careful.