This month we’re focusing on a topic dear to our hearts at Pursue Wealth; a topic we believe is incredibly important that you know about- financial abuse. In recent months this type of family violence has been thrown into the spotlight and is finally beginning to receive the attention that it requires. However, there is still a lot of work to be done to eradicate this form of domestic violence, and we’re here to do our part through educating all those we can, and by spreading awareness.
Content warning: discussion of financial abuse in a household.
What exactly is financial abuse?
Financial abuse is a type of family violence. As with other types of violence and abuse, it can begin gradually, and progress so slowly you may not know it is happening. Financial abuse takes away the victim’s financial independence, and can leave them feeling vulnerable, isolated, depressed and anxious. Financial abuse can happen to anyone. The abuser could be your partner, or a family member, carer or friend.
This month’s post will be about how financial abuse can be acted out in a home, what the warning signs of financial abuse are, and how to proceed if you spot these, either within your own household, or within that of a friend, colleague, or other family member.
What defines financial abuse?
In the state of Victoria, financial abuse is defined as a form of family violence. Family violence is any situation where one person uses overt power and control over another, with the intention of inflicting pain, fear, or forcing obedience. Financial abuse, like family violence, is a repeated behaviour, or patterns of behaviours, and can occur between partners, or other familial relations in an attempt to control their financial power.
Financial abuse can occur as the single form of abuse present in the household, or it can be just one form of family violence occurring in the home. Financial abuse is just as damaging as physical abuse and the impacts can last a lifetime, which is why it is so important that this topic is discussed, and the warning signs made obvious to all.
Financial abuse may look like…
1. One family member controlling the family’s money:
- One person being completely in charge of all the household income and paying the other person an allowance
- One person controlling how any and all of the household income is spent
- One person forcing a family member to claim social security benefits like Centrelink and then taking that money for themselves
- One family member taking out a loan in the other family member’s name, either by force or even without their knowledge
- One person forcing another family member to work in a family business without being paid for their time and skills
- One person taking money out of their family member’s pension
- The selling of a family member’s possessions without their permission.
If you have a friend, a colleague, or a family member who needs to ask their partner or spouse’s permission before joining you for lunch, or making a purchase- that may be a red flag to look out for.
2. One family member preventing another from earning money:
- Preventing a family member from getting a job
- Preventing a family member from studying to get a career
- The act of stalking or harassing the family member’s colleagues so that they become isolated and may feel forced to give up their job and income stream.
If you have a friend, colleague, or family member who has suddenly changed their mind or plans about starting to work or studying, this could be a red flag- this change may not have been their choice.
3. Limiting access to money.
- One family member not giving another access to bank accounts
- One family member racking up debt on shared accounts or joint credit cards
- One partner withholding any kind of financial support payments needed, such as a child support payment due to the other
- One family member refusing to work, or contribute anything to the household income and forcing the other to make the money for the household
- One family member gambling away the family’s money.
The impacts of financial abuse stay with survivors for years, sometimes even for the rest of their lives.
The impact of financial abuse can be felt long after a victim has left an abusive situation. In addition, the victim’s credit score may be ruined, which will cut them off from being able to take out a loan to support themselves in their new lives. Without this access to economic resources and safety nets, survivors of financial abuse face many challenges in leaving their abusers and becoming independent.
Financial abuse can happen to anyone, even someone you know..
We want to use this post to share a story so important, and so integral to Pursue Wealth’s purpose: the story of Sam and her mum, who was a victim of financial abuse. Sam is Pursue Wealth’s co-founder and director, and was compelled to start our company after witnessing financial abuse in her own home.
Sam’s mum and dad ran a successful business together, with Sam’s mum running the financial aspect of it. However, when she fell pregnant, she handed over the financial side of the business to her husband, who then ran the business into the ground. Sam’s mum was able to salvage the business, however when she fell pregnant a second time, this time with Sam, the pattern repeated. In the midst of trying to salvage their business a second time, Sam’s mum also discovered that her husband had taken out debts in her name without her knowledge or consent. Her husband then defaulted on many of the debts, which led to her credit score being ruined, and her being unable to take out a loan to help her leave the marriage.
The situation deteriorated so badly that the husband’s parents offered Sam’s mum money to help her leave the relationship. In order to get herself and her children away, Sam’s mum ended up handing over the money to her husband, and leaving with nothing; just her kids, and her bad debts and wrecked credit scores.
Sam’s mum struggled to make ends meet, working 2-3 jobs for the entirety of Sam’s childhood, while her husband hid funds and refused to pay child support. However, Sam’s mum persevered. She put three children through school, and then while her eldest were in university, she became a financial advisor herself. Seeing her own mum struggle like this is what motivated Sam to get into financial advice as well, and the two remain committed to helping people to become financially independent and prevent them falling into situations of financial abuse or start anew after escaping from this form of family violence.
Sam’s mum is a story of triumph; of an incredibly strong woman who was able to persevere- to escape, to educate herself, and to build a life for her and her three children. Many women however, are not able to create this kind of life for themselves, and spend their lives trapped in a cycle of financial abuse. The more awareness that is shone upon this matter the bigger the chances of these women receiving the help, and the support that they need to exit the cycle.
If you suspect a friend, family member or colleague may be experiencing financial abuse there are a number of ways you can support them. If you feel quite close to this person, you could consider reaching out to them in person, and letting them know you’re available to listen to whatever they need to say. Their first step in overcoming this may be having a friendly shoulder to lean on, or even a place to crash at if they need to leave their house.
If you don’t feel as though you are informed enough to reach out immediately there are numerous online sources for you to contact in order to get more information as to how you could support your friend, colleague, or family member. Consider contacting White Ribbon through their hotline, or reach out to The Financial Independence Hub. You can also call 1800 RESPECT on 1800 737 732 or WIRE’s support line on 1300 134 130.
Pursue Wealth is committed to empowering all people to become financially adept and independent. If you have experienced financial abuse and are struggling to get your finances in order, Pursue Wealth can help you to rebuild your life and find your financial freedom.