Three Types of Financial Abuse

By Rachel Puryear

Previous posts on this blog have discussed financial abuse. This is an important, and under-discussed subject which can have strong ramifications for people’s lives, and their personal autonomy.

As a legal mediator, and relationship and financial life coach of many years; I have observed that financial abuse – as well as financial incompatibility, even without abuse – is a common problem in close relationships. This problem can have a very harmful impact on people’s finances and lives. The scope of this post will focus on financial abuse.

Many people are not aware of the problem of financial abuse – at least, not until it’s too late. They may know such behaviors can happen, but they believe it’s normal. This is why it’s important to know about financial abuse – because knowledge is power, and it can help them avoid getting into financially abusive situations, or get away from a financial abuser in their lives.

In this post, I will introduce three different types of financial abuse commonly occurring in romantic, family, and other close relationships. Financial abuse – like with physical or psychological abuse – does not present the same way in all cases, which is why these three different types are distinguished.

Before we get into the three types, please note a few clarifications:

  • One or more types of financial abuse may occur within the same relationship.
  • For the purposes of this discussion, “financial abuse” usually includes some type(s) of control mechanism by the abuser over the victim – such as emotional manipulation, threats and intimidation, exploiting the victim’s guilt and shame, inequality in the relationship, the victim is dependent on the abuser in some way, and so forth.
  • This post will focus on identifying the three types of financial abuse, and describing what they look like. Related subjects like how to spot early signs, what to do if someone is in a financially abusive relationship, and how a history of experiencing financial abuse can affect someone’s financial behaviors later; will be addressed in future posts, with in-depth discussions of these other important subjects.

With these in mind, let’s proceed to discuss three types of financial abuse:

Piggy bank with bandages.

(1) Financial Abuse in the Form of Controlling the Finances

One form of financial abuse comes in the form of the abuser controlling the finances, and shutting the other (the victim) out of financial matters. Controlling financial abuse commonly applies to abusive romantic and marital relationships, due to the nature of this kind of relationship where finances are supposed to be shared between the partners. However, it could also apply to other familial and close relationships, where an abuser takes control over an unwilling victim’s finances.

For the person being shut out, they could have trouble leaving the relationship because of the controlling behavior, as they often don’t have access to the finances. If the relationship continues to become more abusive – as it often does, under these circumstances – the victim may feel compelled to choose between enduring the abuse, and likely living in poverty.

Often, this controlling behavior might start in an abusive romantic relationship after the partners get married, or after a mother gets pregnant or has a baby, and/or when a partner becomes a stay-at-home parent (typically with the income-earning partner taking control and shutting out the unpaid partner). The victim may feel “locked in” after these kinds of events – in abusive relationships of all kinds, the bad behavior often starts to surface where the victim feels more vested in a relationship, rather than early on.

(2) Financial Abuse in the Form of Draining Others

Another form of financial abuse is where the abuser keeps the victim constantly drained of money – spending their money, and pressuring the victim to support a needlessly expensive lifestyle; but not reciprocating the financial assistance and efforts or repaying the funds. In previous posts, I have also referred to this behavior as moocherism.

In a marital/romantic partnered relationship, the abuser effectively forces the victim to bear the financial responsibilities for the household, intentionally and without prior agreement to do so. The abuser may quit their job on purpose as soon as the partners move in together or get married (so that the victim is more tied to the relationship), refuse to pay their fair share of household expenses, and force the victim to do all the work of supporting the household while the abuser does not help (and often, in such a situation, the abuser does not help adequately with household chores and childcare, and other important but unpaid work). This is often referred to informally by some in the relationship counseling field as “refusal to work syndrome”.

Some “draining/moocher” abusers also insist that all money in a partnership be shared (but really when it’s to their benefit only), but then spend more than their fair share on things they don’t need so that there’s nothing to save, and they may even run up debt that their partner is also on the hook for (married spouses are jointly liable for most of one another’s debts in many states). Keeping the accounts drained also complicates the victim leaving the relationship if they want to.

A financially draining/moocher situation could also occur between those in other family relationships – parents and children, siblings, other relatives. It can also occur between friends – or, “friends,” I should say. Or between any other people who know one another and have a close relationship.

In a non-romantic but close relationship context; draining/moocher financial abuse could instead present as one person constantly pressuring the other to give them money – as a gift, or as a “loan” that the abuser promises to pay back, but never does, and never intended to in the first place. The abuser might want to get others to support them financially so they don’t have to get a job, and/or the abuser may want others to finance an unnecessarily expensive lifestyle that the abuser could not pay for on their own. Many draining/moocher abusers feel entitled to lavish lifestyles that they cannot afford, but they do not want to work towards an employment situation that could earn them enough money to afford what they want, nor do they want to live a simpler lifestyle (these are often snobs who feel that frugality is beneath them).

(3) Financial Abuse in the Form of Sabotaging Others

With this form of financial abuse, the abuser undermines and sabotages the victim financially – and this is done on purpose. The abuser may run up debts that the victim is responsible for (such as marital debt if they are married, or pressuring the victim to co-sign in bad faith), and then deliberately failing to pay without a reasonable effort to do so.

This is distinguished from draining abuse in that here, the intent is to sabotage the victim, rather than necessarily spend the money. It is malicious.

Sabotaging abuse can result in the victim being burdened with debt, as well as damage their credit and diminish credit opportunities for them. The abuser may interfere with the victim’s employment or career in a number of ways, in order to achieve effects such as harming their professional reputation, causing them to be fired or demoted, or interfering with them obtaining education or licensing. Sabotaging financial abuse is intended to harm the victim financially; perhaps out of spite, perhaps to control them, or maybe both.

Sometimes, this type of abuser might even harm their own interests in order to sabotage the victim (such as where partners with shared finances have one partner sabotaging the other financially), especially if they know it will still hurt the victim more than it will hurt them.

This type of abuse could also occur where the victim ended a romantic or other personal relationship with the abuser, and didn’t want anything to do with the abuser anymore. The abuser might behave like this out of revenge, and a desire to hurt the victim.

So, these are the three main types of financial abuse, and a brief overview of each. Future posts will dive into deeper depth for each type, as well as how it might look in different kinds of close relationships.

However, knowing how to recognize and avoid abusive financial behavior from others can help avoid abusive relationships generally, and a lot of personal harm – financially, emotionally, often physically, and otherwise.

Thank you, dear readers, for reading, following, and sharing. Here’s to preventing and stopping financial abuse by recognizing it for what it is.

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