What unique financial hurdles does someone face when they are in an abusive relationship?
Unless you have personally been a victim, it is truly hard to understand the reasons one stays in an unhealthy relationship. More often than not, the abuser has made the victim feel as if they are dependent upon the abuser. That without the help of the abuser, the victim could not survive financially in the world, and it is only by the grace of the abuser that the victim has a roof over their head, and food on the table.
Bring children into that equation, and the hold one has over another can significantly multiply. The fear of breaking up a family, uprooting kids from their home, and denying them from seeing both parents every day can be too much for one to handle.
Add to that situation the probability that a joint bank account is being used to deposit income and pay family expenses. Without both participants, odds are the latter will not be sufficiently met.
The largest hurdle you face in an abusive relationship is getting back your independence. Only when you take back the feeling or idea that you are not completely dependent on another can you move towards financial independence. And only then can you successfully remove yourself from that type of relationship.
What steps (if any) can someone take to prepare financially before leaving the relationship?
Leaving an abusive relationship takes a huge toll not only on one’s psyche, but also for their finances. Before I cut final ties with my abuser, I took some precautionary measures to make sure I wouldn’t be left high and dry.
First, I scheduled appointments to meet with all of the best attorneys in town. I even met with a few others… All in all, I had meetings with over 85% of the local lawyers in a matter of a couple of weeks. My reasoning was pretty simple- if I had an introductory meeting with a particular attorney, my ex-husband wouldn’t be able to use them. It could be considered a conflict of interest, so the attorney would refer them to someone else (who I probably met with also). By narrowing his options, and forcing him to use a less experienced professional, I gained some ground in the divorce. I had pick of the crop, and could limit the expense of the proceedings since I was the one initiating the process.
Next I opened a separate account titled in my name alone. My plan was to transfer my portion of the contributions from the joint account into my individual account. This would ensure I would have enough funds for food and necessities.
I also gathered all of his retirement account information, along with other individually owned bank accounts he had. It wasn’t too hard, as these statements came to the house. I simply scanned and forwarded them to my attorney. This was to ensure all accounts would be properly documented, and equally split.
I had already spoken with family about my plans, and had made arrangements to stay with them. After everything was in place, I simultaneously triggered the money transfer and divorce papers.
What steps can someone take to rebuild their finances after leaving the relationship?
Starting over is never easy. I knew it wouldn’t be. However, by having a plan of action before pulling the trigger helped quite a bit.
While I didn’t have enough right away to rent an apartment, I was able to stay with family until I paid off what I needed to before taking on any new expenses. This not only allowed me to pay off my portion of the bills I accrued in the divorce, but also provided me the opportunity to establish some savings and an emergency fund.
Since my credit had been damaged a bit, I wanted to rebuild that as well. Taking out share secured loans (the bank freezes a specified amount of money in your account until payments are made. Each payment frees up the same amount of principal) was the easiest way I knew. Within a year and a half my credit had been repaired.
What advice can you offer for someone who is rebuilding their finances after leaving an abusive relationship?
However bad the financial damage, it’s worth the trouble to take back your life. Typically one doesn’t fall in love with an abusive person. The abuse develops over a period of time. Rebuilding your finances will take some time too.
Share secured loans or credit cards are the best options. They usually have low interest rates (typically only 2% over what the savings is paying), and can be paid over many months. You want to make sure to establish a payout for at least six months, since that is the trigger point for helping raise your credit.
Replacing household items can be done fairly reasonable as well. Social media sites have “online garage sale” postings, and you can pick up items really cheap. Hitting the Goodwill and other thrift stores are a great idea too. You can find some great treasures at rock bottom prices.
What can we, as friends, family neighbors, etc., of someone in an abusive relationship, do to support them (specifically with regards to finances)?
Often times a victim doesn’t have the funds to remove themselves from an abusive relationship. If they were unmarried, the abuser might have all property titled solely in their name. For those married, the bill for an attorney may be the deterrent. This can be particularly true if the abuser holds the purse strings.
While there are a myriad of reasons for a victim to leave, there may only be a few issues that hold them back. Money is a fairly common one.
Sitting down with the victim and creating a plan of action often helps them realize leaving is realistically doable. Knowing they are not alone, and monetary assistance with the first steps (attorney, filing fees, food, etc.) is available to them is sometimes all it takes.
Is there any information you'd like to include that I haven't asked about?
Being in a relationship, regardless if married or not, does not mean you have to commingle all funds. I am a huge proponent of a mine, yours, and ours type of finance. It is a simple technique, but can have enormously positive effects.
Most relationships consists of a saver and a spender. More than likely, the items one person wants to spend money on is not the exact same items the other person would like to use the funds for. This causes conflict.
There are two solutions that can help. The first is for each person to have their own account and be responsible for certain bills. However, more often than not, this ends up not being an even split.
The second option is for each person to have their own individual accounts, and also a jointly owned account. Each person contributes, equally, their portion of the total amount of the bills into the joint account. Then the bills are paid from this account.
The funds remaining in their individual accounts are used with their own discretion.
Michelle Kuehner is a Registered Investment Advisor Representative and Managing Director for Personal Money Planning. She is also a Certified Credit Counselor and Certified Financial Health Counselor, writes Fix Our Budget blog, and has over 24 years of experience in the financial industry.
Photo by Stuart Miles. Published on 09 March 2015
Stock photo - Image ID: 100314433