In these difficult financial times, it’s easy for financial stresses to become the cause of arguments between family members. Partners may quarrel over how money is spent, and family members can be put under pressure to lend money to extended family who are struggling.

At the extreme, this can lead to what is best described as financial abuse. Domestic violence can take many forms and it is important to recognise that financial abuse can be one of them. Financial abuse may or may not be linked to physical abuse and can be hard to detect by others.

Lurking inside what appears from the outside to be a normal relationship may be controlling and threatening behaviour which is psychologically damaging. Victims in such relationships are often too ashamed to speak about what is happening to them, and in some cases may not even recognise that the way they are being treated is neither normal nor acceptable.

Financial abuse can occur across all socio-economic groups. It can take many forms:

• Intense monitoring of money spent, which can be followed by criticism or punishment for spending without approval or not being able to account for where the money has gone.
  
  
• Excessive control of income or assets by one partner, leaving the other with either a small allowance or limited access to money.
  
  
• Threats of leaving knowing that the remaining partner has no means of supporting themselves.
• Forced signatures on legal documents pertaining to borrowing money or purchasing significant assets, often involving significant financial risk.
  
  
• Spending large amounts of money without consultation, which may leave insufficient for necessities or increased financial stress.
  
  
• Denied access to financial records or certain bank accounts.
  
  
• Emotional blackmail, especially between parents and children – for example ‘if you love me you will lend/give me the money’.
  
  
• Adult children moving into their parents’ home and refusing to pay board when asked.
  
  

Perpetrators of financial abuse usually have deep psychological issues; however they are unlikely to deal with these if their behaviour is tolerated by others.

Seeking help

Any person who believes they may be experiencing these forms of abuse should seek advice from someone they trust. None of these behaviours are acceptable in a relationship.

While these are extreme behaviours, they are still problematic when they appear in less dramatic and more subtle forms. One of the most common forms of subtle abuse is controlling personal spending of another person and in so doing, denying them the freedom to spend money on things that are important to them without feeling guilty or creating tension in the relationship. Adult children can also make subtle demands of parents which can lead to guilt and tension.

Healthy financial practices in a relationship

In healthy relationships, money is not used as means of control and financial issues are discussed freely and openly without criticism. It is vital that every person has an amount of regular income and capital they can spend on their own personal needs without being answerable to anyone else and without repercussions. When finances are shared, the amount of money available for personal spending should be agreed upfront and reviewed when necessary.

Ideally in a relationship, managing finances should be shared equally and jointly. However, if one person takes responsibility there should be no withholding of information and there should be good communication. Some couples choose to manage their money separately, but the same principles of openness and communication apply.

Helping others without compromising your financial situation

When it comes to providing financial support to others, the basic principle to bear in mind is that your own financial security should be the first priority. It is not uncommon for parents to jeopardise their own situation by helping children who are in trouble, but all that does is create another problem. It’s not possible to continue to help others if you end up in the same situation they are in.


Written by: Liz Koh
Liz Koh is a money expert who specialises in retirement planning. The advice given here is general and does not constitute specific advice to any person.