Last year, a dear friend of mine asked me to help with authoring a section of her newsletter dedicated to Domestic Violence Awareness Month. In support of this cause, I’m releasing the contents of that article in five blog posts in the hopes that anybody who might benefit from this information will find it. If any readers have suggestions for additions or changes to the contents of these articles, please contact me and I’ll gladly consider those changes in the interest of providing the best resource possible for victims of abuse. 

What Is Financial Abuse?

According to the National Domestic Violence Hotline¹, domestic violence is “a pattern of behaviors used by one partner to maintain power and control over another partner in an intimate relationship.” A less-discussed topic is that nearly every victim of domestic violence has experienced financial abuse. Common examples of financial abuse can include:²

• Interfering with involvement in work, school, or other self-advancement activities
• Restricting access to cash, investments, bank accounts, and/or credit cards. This sometimes comes as an ‘allowance’, or through micro-managing and monitoring the victim’s spending habits. In other cases, all accounts may be in the abuser’s name only
• Excluding the victim from a mortgage or rental agreement for a shared home
• Hiding assets, making large purchases, spending the victim’s money, or racking up debts in the victim’s name through existing credit accounts or by applying for new ones
• Living in your home without providing rent or assistance
• Refusing to provide money for necessary or shared expenses
• Otherwise destroying, controlling, or stealing income, assets, property, or possessions of your or your children/dependents
• Withholding child support or hiding income after separation

Even after a victim of domestic abuse leaves their partner, they often have to deal with damaged credit scores, inconsistent employment histories, debt collectors, property liens, or other major financial hurdles. According to the National Coalition Against Domestic Violence³, “Economic self-sufficiency is frequently the difference between violence and safety for many victims.”

Protecting Yourself From Financial Abuse:

The easiest way to protect yourself from financial abuse (and preserve your means of escaping potential domestic abuse of other types) is to stay financially independent. For those who have the option, please consider taking the following actions:

Maintain consistent employment and work on increasing your skills, knowledge, and experience to stay competitive in the job market and ensure you have a stable source of income to support you and any dependents

• Make sure you’re consistently involved in your household’s financial decision-making process
• Make sure you have access to all ‘household’ accounts with your name on them including bills, debts, rent and mortgage agreements, deed/title to property, insurance policies, and joint banking/investment accounts. Do not give your assets to your significant other to ‘handle’ for you in an account without your name on it or that you can’t access. This also applies to accounts for your children, if applicable. If the assets or investments are not joint, think twice about adding them to the account. Once you’ve done so, they are often able to completely withdraw the account to zero
• Save and maintain an emergency fund (ideally at least three months’ worth of expenses) that only you can access
• Carefully consider whether it’s safe to give your partner access to non-emergency account information such as security question answers, usernames and passwords to financial accounts, account numbers
• Set up 2-Factor Authentication (2FA) for all major accounts. Consider using an authentication app instead of your phone number and password protect it (suggestions later in the article)
• Check your credit report at least annually to make sure you’re aware of all accounts in your name and look out for fraudulent activity
• Safeguard personal information and documents such as your Social Security number/card, passport, driver’s license, and birth certificate
• Maintain an electronic copy of all important personal and financial documents and information listed above in at least one place. Additional information and resources are discussed later in the article
• Watch for warning signs of financial control and abuse. A major giveaway is watching for how a partner reacts when you say “no.” Make a point of doing this early in a relationship and see what happens. Do they accept your decision and move on, or treat it as a challenge to overcome

As the old saying goes, “An ounce of prevention is worth a pound of cure.” Taking steps to protect yourself from being vulnerable to financial abuse is the most effective way to avoid it.

Sources:

1. Center for Financial Security, University of Wisconsin-Madison. “Measuring the Effects of Domestic Violence on Women’s Financial Well-Being.” Accessed September 18, 2021
2. National Domestic Violence Hotline. “Understand Relationship Abuse.” Accessed September 18, 2021
3. National Coalition Against Domestic Violence. “Quick Guide: Economic and Financial Abuse.” Accessed September 18, 2021
4. StatPearls Publishing via NCBI. “Domestic Violence.” Accessed September 18, 2021