Monday, November 10, 2014

The Invisible Abuse: Financial Abuse




There is a type of domestic abuse that is getting more and more attention these days:  financial abuse.  In some relationships, financial abuse exists even when other forms of abuse do not. 
Financial abusers gain power and control by limiting their partners’ access to cash and other assets or by concealing information about finances.  It is one of the most powerful methods of keeping a victim trapped in a relationship and greatly reduces her (his) ability to subsist after leaving.  Survivors report that concern over their ability to provide financially for themselves and their children was a major reason for staying in or returning to an abusive relationship.
Common methods used by financial abusers include:
·         Controlling how all of the money is spent & not allowing the victim access to bank accounts
·         Withholding money or giving “an allowance”
·         Refusing to pay bills and ruining the victim’s credit score
·         Forbidding the victim to work or refusing to work or contribute to the family income
·         Running up large amounts of debt on joint accounts
·         Not including the victim in investment or banking decisions
·         Hiding assets
·         Stealing the victim’s identity, property or inheritance
·         Evading child support or manipulating the divorce process by hiding or not disclosing assets
Those who manage to escape financial abuse often face overwhelming odds against success.  Ruined credit scores, sparse employment histories, and legal issues caused by the abuser can make it difficult to gain – and maintain – independence.

Tuesday, June 17, 2014

Planning Ahead Together: Joint Money Management



Partners in successful marriages and other long-term relationships often settle into a division of household labor based on abilities, affinities, and tolerances.  It is usually easier on both to divide the to-do list into yours and mine and attack the chores individually rather than trying to do everything together.   This can be a highly effective strategy, but when things go wrong – one spouse becomes ill, has an accident, or dies unexpectedly – the other spouse may find himself (or herself) responsible for tasks he doesn’t know much about.  This can cause even well-laid plans to go awry.

Money management is one of the tasks that one spouse often takes on and the other gladly abdicates the responsibility.  Some chores, such as housekeeping, cooking, lawn care, and car repair, can be hired out or taken over by family and friends, if necessary, but many people are reluctant to share their financial information with someone else and, therefore, the spouse who has not been attentive to the financial details usually must take over this responsibility.  If the money manager spouse wasn’t particularly organized, and picking up where he left off requires figuring out a haphazard system, the crisis level of the situation and the stress on the new money manager increase dramatically.  This is also the worst possible time to discover that your spouse has not been paying bills on time, has allowed you to accumulate more debt than you were aware of, or has accounts you knew nothing about. 

You and your partner should always keep in mind how each of you will need to proceed without the other.  Make sure that you train each other on your own chores – what washer and dryer cycles you use, how to clean the pool, and how you keep the financial records.  It isn’t necessary for both of you pay the bills together each month – just provide monthly reports to your spouse on the activity and balances in all of your bank accounts, loans, and credit accounts.  Whether you generate the monthly reports with a personal finance software program, a spreadsheet, or a handwritten ledger, provide the details that your spouse will need to know in order to comfortably step into the job, should it ever become necessary.  If you are not the family bill payer, ask questions about what’s in the reports and make sure you understand what you’re reading.

If your assets include investments, trusts, and other financial instruments, it is a good idea to engage a qualified financial planner to advise you, and both of you should attend regularly scheduled meetings with your advisor.  If you are the one who has to take over in an emergency, you will be much more at ease with the task if you already know and trust the person you may need to depend on during a difficult time. 

If discussing finances with your spouse is a challenge, you may benefit from consulting with a Financial Therapist to explore new ways of working together to reach your financial goals and maintain your lifestyle.  When partners argue about money, their disagreements often reflect other problems in their relationship.  Building an effective money management plan without resolving these underlying issues can be a daunting task.  Commit to each other to do whatever is necessary to create an effective strategy for success. 

Making “The Talk” with Your Children (about Finances) Easier


You’re getting close to retirement age, you’ve met with your financial advisor, and you have a strategy in place for funding the next thirty years of your life.  All you have to do is wait for the magic date!  Actually, there is one more thing you need to do before you start spending down your investment accounts – talk to your children about your finances. 

While the thought of this version of “the talk” may seem as awkward as the one you had with your teenagers, it’s even more important to initiate it, because it’s for your own benefit, as well as your children’s.  You can make it clear to them who you want to handle your finances when you can no longer do it yourself.  (This may be especially important if your choice is not your oldest child or an otherwise obvious one.)  Making your plans and expectations clear now will prevent worries (yours and theirs) during future health crises and other stressful times; also, your children will know what you want them to do and where to find the information they need to do it.  Explaining what your retirement income and resources will be will allay concerns your children may have.  Also, detailing how much you expect to leave behind and how you plan to divide it among your heirs will quell speculation and minimize or eliminate fighting over your estate.

Here are some tips that will help you conduct a stress-free family meeting:

1.      Plan the discussion when everyone you want involved can be present; set up a conference call with anyone who can’t attend. 
2.      Decide what you want to share; write an agenda, if it will help you organize your thoughts. 
3.      Show your children your respect by listening to their concerns and answering their questions.  (Entertaining their suggestions is optional.)
4.      If you have concerns about leaving anything to a particular family member, address it so there are no surprises for anyone down the road.
5.      Be clear about your current plans – and that they can change.  Assure them that you’ll notify them of any major modifications to the plan.
6.      If you are concerned that this meeting will not go well with one or more of your family members, ask a financial therapist, financial advisor, or other professional to help facilitate the discussion.

Sharing the details of your financial life with your children is not relinquishing control over it.  You’ll merely be acknowledging that a time may come when you will need their help, and you want to make it as easy on them as you can.  If you don’t give them this information, you may be forcing them to someday make decisions based on what they think you would want.  That scenario will be more stressful for them, and their decisions will be less likely to concur with your wishes.  Overcome the potential awkwardness and show your children that you trust them, not only with this most personal of information, but with your future.

Monday, June 16, 2014

Financial Therapy - Like a Walk in the Park


When my son, Kyle, jogs with his dog in the park, he sets a steady pace along the trail, but Sam runs ahead, stops to sniff a clump of grass, and then darts after a squirrel.  When I shop with my daughter, I always head straight for the department we need.  Crystal  starts out with me, but something always catches her attention, and she frequently veers off into the racks, then scurry to catch up with me.  Inevitably, she darts away again to look at something new.  We shop the way Kyle and Sam exercise!


            Park outings are more successful for both Kyle and Sam if they each do it the way it comes naturally.  If Kyle keeps Sam on a leash, the dog would constantly be tugging, slowing him down, and tripping him up; also, Kyle enjoys seeing the squirrels, rabbits, and other wildlife Sam flushes out.  Without my focus, Crystal and I may wear out before we find what we’re looking for; but I also enjoy watching her delight in her discoveries.  And sometimes she spots a treasure that I would never have seen.


Couples with different money management styles often find themselves at an impasse as they each insist on budgeting/saving/spending their own way.  Money management, like walking the dog and shopping with a friend, is often more successful when both spouses can contribute in their own way.  Taking advantage of unexpected bargains and opportunities can be an effective way to save money on things you need or were already planning to buy; making it possible to methodically saving toward a goal.  Learning new ways to achieve your objectives can be very satisfying, and attaining a goal you might never have achieved by yourself can be exhilarating.  Acknowledging the value of your partner’s point of view and trusting his/her instincts and abilities will build a stronger relationship at the same time it helps you achieve your goals.