Understanding Financial Abuse
Don’t let someone else use finances against you – here’s how to help yourself and others…
As with all forms of abuse in relationships, financial abuse occurs when a person uses finances to gain control and power over their partner. This imbalance causes the victim to feel isolated, dependent or uncertain of their ability to financially provide for themselves or gain independence when unhappy in their relationship. Elise Corless, a counsellor at Diamond Women – a support and education organisation for women facing motherhood without support – says financial abuse is still a big problem in Australia. “Over the past two years, I’ve encountered numerous women who’ve struggled with financial independence due to controlling behaviours in their relationships. This has ranged from partners sabotaging their work lives to manipulating expenses and debts to keep them financially dependent,” she says. “Tactics include stalking at workplaces, forcing them to leave jobs, controlling bank accounts to incur debt and prevent good credit scores, accruing secret debts and withholding money as a way of receiving what they want from their partner. These actions not only undermine a woman’s financial autonomy but also trap them in cycles of dependency and manipulation.
PATRICIA’S 7 TIPS TO HELP PREVENT FINANCIAL ABUSE
• Establish your own income “Having your own income is crucial for financial independence. Whether it’s full-time employment, part-time work, freelancing or starting your own business, a reliable income lays the groundwork for a stable future and gives you the freedom to navigate your financial journey on your terms.”
• Establish individual bank accounts “Ensure you have bank accounts in your name only,” she says. “This gives you direct access and complete control over your money. It is a fundamental part of financial autonomy and privacy.”
• Stay informed “Regularly review your bank statements and financial documents. This keeps you informed about your financial situation and allows you to detect any unauthorised or suspicious activity early.”
• Understand documents you sign “Make sure you are fully aware of the implications of any financial document and only sign those you understand,” says Patricia. “Enlist the help of a financial adviser to demystify complex information.” And while you can seek financial advice as a family or couple, remember you can always seek advice on your own, if you prefer.
• Learn to say no It’s not always easy, but always be prepared to assertively refuse requests or demands for your money that are not in your best interest. It’s important to set boundaries around your finances to prevent misuse and protect your financial well-being.
• Understand family finances “Staying informed is key. It is important to ensure you are across all financial decisions that impact you to ensure you are receiving your fair share. If in doubt, always seek legal and financial advice.”
• Document and report abuse “Most importantly,” says Patricia, “if you experience financial abuse, document everything and seek legal assistance to protect your rights. This can break you free from abusive financial situations.”
AND WHAT ABOUT DIVORCE?
Divorce can be a challenging time, not just emotionally but financially. Patricia stresses the importance of safeguarding your financial independence. “You must arm yourself with knowledge, carve out time for planning and surround yourself with professional support to ensure you emerge with stability and confidence,” she advises.
BEFORE SEPARATION
✔ Seek legal advice early. In Australia, there’s a 12-month separation period required before applying for a divorce.
✔ Gather all financial documents, including bank statements, loan statements, tax returns, superannuation statements and property records, so you can assess your financial position accurately and make informed decisions going forward.
✔ Establish individual accounts. Owning individual bank accounts and credit cards in your name will ensure financial independence and separate finances from your spouse.
✔ Establish credit in your name. You can do this by owning a credit card in your name and making regular, timely payments.
✔ Consult with a financial adviser to understand the financial implications of divorce, property settlements and future financial planning.
BEFORE DIVORCE
✔ Determine the ownership status of shared property, including the family home, investment properties, vehicles and personal belongings, plus get professional valuations for significant assets to accurately assess their worth.
✔ Negotiate with your spouse to reach a fair and equitable division of shared property. If necessary, consider selling shared property and dividing the proceeds or allowing one party to buy out the other’s share to facilitate a clean break.
✔ Close joint accounts if possible to prevent further accumulation of debt and ensure that each party is responsible only for their debts moving forward.
✔ Compile a comprehensive list of all shared debts, including credit cards, loans and mortgages and work with your spouse to negotiate responsibility for shared debts fairly, considering each party’s financial capacity.
✔ Review shared investment portfolios, including stocks, bonds, superannuation accounts and other investments.
✔ Consider spousal maintenance if you’re in a financially disadvantaged position compared to your spouse, ensuring financial support during and after the divorce process.
POST-DIVORCE
✔ Develop a new financial plan, taking into account your new goals, current assets, debts, income and expenses to rebuild your financial stability and seek professional advice.
Your Vision Financial Solutions Pty Ltd ABN 64 650 296 478 and its Advisers are Authorised Representatives of Fortnum Private Wealth Ltd ABN 54 139 889 535 AFSL 357306. This article has been prepared without taking into account your personal objectives, financial situation or needs. Before acting on any information on this article you should consider the appropriateness of the information having regard to your objectives, financial situation and needs.