Last month, I was honored by InvestmentNews as one of their 2016 Women to Women. One of my fellow honorees was Stacy Francis, founder of the nonprofit organization Savvy Ladies.
While Stacy was growing up, she witnessed her grandmother endure an abusive relationship, which lasted from when she was 18 until her death, because she feared she could not support herself financially. Her grandmother did not believe she could survive on her own given her lack of understanding of money. Having watched someone so close to her suffer in this way, Stacy made it her life’s mission to “help other women have the resources, the education and the support to make sure that they can live the life that they truly deserve.”
Her remarks made me remember a situation with a former client when I was just a few years into my financial planning career. After an hourslong conversation and some tears, this educated, married professional woman shared that she thought her husband was mismanaging her accounts and she did not know what was going on. Now she wanted to open a new account for herself to start saving for retirement without his involvement.
I also thought of a widow I was recently introduced to. She lovingly revealed that her late husband controlled the family finances, had used her name to open accounts and had even liquidated her retirement account. She said she was not fully aware of what happened to the money.
While these women show no outward scars or bruises, what they experienced may have been a form of financial abuse. The National Network to End Domestic Violence (NNEDV) explains that financial abuse is a powerful tactic used by an abuser to entrap their victim in an abusive relationship.
Common tactics of abusers include employment-related abuse that results in the victim being unable to earn a living; coerced debt, when the victim is forced into transactions that affect their credit; and refusal to give the victim access to their own money. This can occur regardless of the age, ethnic or racial identity, education, or socioeconomic background of the person involved. Survivors of this type of abuse indicate that their fear of being unable to provide for themselves and their children caused them to return to or stay in the abusive relationship.
The statistics are staggering. One in three women has been a victim of some form of domestic violence in their lifetime. According to the National Coalition Against Domestic Violence:
» Between 94 and 99 percent of domestic violence survivors have also experienced economic abuse.
» Each year, victims of domestic violence lose a total of 8 million days of paid work, or an estimated 32,000 full-time jobs.
» The cost of intimate partner violence exceeds $8.3 billion per year — $2.5 billion in lost productivity and $5.8 billion in medical costs.
Those who have never been in this situation should not be quick to pass judgment. It is not enough for us to ask the victim, “Why don’t you just leave?” Walking away is not easy when you are embarrassed and often isolated from friends and family. Without a viable plan in place, a victim of financial abuse faces the threat of homelessness and an uncertain future if they end the relationship with their abuser. And the situation is even more complicated when children are involved.
The president and CEO of Urban Resource Institute, Nathaniel Fields, said that financial abuse victims find themselves in a “Catch-22” because a large percentage of victims also suffer from domestic violence.
In addition, he said, “Seven out of eight women who leave an abusive relationship will go back because of financial abuse. It’s a double-edged sword. If I do leave, it may be more difficult to maintain independence because I have poor credit or because I can’t find my own apartment or because I had a sporadic work history because he showed up at my job with the intention of getting me fired.”
Here are a few tips that experts recommend for what to do if you or someone you know is involved in a financially abusive relationship:
» Reach out to the local domestic violence agency for help.
» Put copies of personal and financial records in a secure place. Consider giving copies to a friend or relative you trust. Or get a safe deposit box that only you can access.
» If you are considering leaving, figure out how much it will cost to support yourself and begin to put away money, regardless of the amount, in a safe place that only you know about.
» Request a copy of your credit report and review it for accuracy. Be sure to report any errors, and dispute all fraudulent accounts.
As Stacy said, it is important that women have access to resources, because financial education can make all the difference in financial freedom. And based on the statistics, there are likely more people who experience financial abuse than we realize.
Jocelyn Wright is the chair of The State Farm Center for Women and Financial Services at The American College. Jocelyn may be contacted at firstname.lastname@example.org.