The Three Types of Financial Abuse That Abusers Use to Control Others

An insecure need for power and control are the driving factors of the behavior patterns many abusers display on a daily basis. While abusers have many different techniques designed to accumulate a substantial amount of power and control over others, society’s acceptance of narcissistic behavior patterns has created an environment characterized by the haves vs the have nots.

As a result, financial abuse has emerged as one of the most common ways abusers acquire power and control over their victims. At this point in time, money is essential, it is what makes things happen. So, it is imperative that we are all aware of the most common forms of financial abuse that abusers use to fulfill their need for power and control over others.

The three most common forms of financial abuse are when the abuser “takes care” of the finances, employment sabotage and economic exploitation.

The information in this article has been intertwined with the experiences of those who’ve escaped abusive relationships plagued with financial abuse to give you some of the information you need to protect yourself from financial abuse in your own life.

Three of the Most Commonly Seen Forms of Financial Abuse

When you take a step back and analyze the warning signs of financial abuse, they seem to be very obvious. For example, one warning sign of financial abuse in a relationship is when one borrows money and doesn’t give it back. It’s clearly a worrisome behavior and at the very least should encourage the victim to maintain very strong boundaries with their abuser. 

However, it is important to remember that financially abusive behavior is accompanied by a slew of other abusive behavior patterns designed to create an environment where abusive behavior is consistently justified, rationalized and normalized by both the victim and their abuser. 

When the intensity of the power imbalance that financial abuse creates is combined with the level of manipulation required from the abuser to maintain in control of these types of relationships, it creates a very powerful trauma bond.

The importance of having a comprehensive grasp of the warning signs of financial abuse is immeasurable so be sure to read our article What Are the Signs of Financial Abuse to help protect yourself from this form of abuse. 

The Abuser “Takes Care” of the Finances

An abuser’s insecure need for power and control often encourages them to try to place themselves in positions where they’re able to take control of the financial situation in both their personal and professional relationships. 

In an intimate relationship or family setting that is abusive, an abuser’s usage of money to fulfill their insecure need for power and control often manifests in the form of the abuser taking control of the financial situation while keeping others in the dark. 

A few months later my ex insisted that I stop wasting the money on the monthly co-op fees and sell my downtown apartment. He suggested that I give him the money and he would pay me interest on the loan. I agreed and lent him the $170K as a 2nd mortgage on the home that he owned in Annapolis. The message of this transaction, which he would say to my face and in front of friends, was that I wasn’t responsible enough to handle my own money and could not be trusted. As a result of this and other ways he gaslit me, my trust in myself slowly began to evaporate. The bottom line is that my ex uses money as a way to control people. He wanted to teach me the lesson that he is the decision maker in the relationship and I am not smart enough nor capable of deciding how to handle money or what I want for my own life. I began my relationship with my ex earning $92K/yr, owning my own apartment and car, with perfect credit; I left the relationship with no job, no apartment, no car, him controlling all of my money, with ruined credit. – Rosa, A Survivor of 5 Years of a Financially Abusive Relationship

As far as their professional relationship, like the ones you’d observe in a work environment, their tendency to use money to control others is more subtle than they are in their personal relationships. 

The reason being that an abuser’s insecure need for power and control in their professional relationships manifests in very specific characteristics like a lack of empathy, sense of entitlement, a grandiose demeanor, and manipulative/exploitative tendencies that enable them to make money faster. 

Someone who is comfortable with taking advantage of others is able to earn money much more quickly than someone who is more ethical. 

Meaning that in professional environments abusers often find themselves in positions of power because they lack empathy, they’re manipulative/exploitative and feel entitled to getting whatever they want, whenever they want. 

Employment Sabotage

When an abuser uses emotional and/or physical abuse to manipulate their victim into quitting their jobs or to prevent them from finding a job, it is known as employment sabotage. 

My ex enjoyed the triangulation and on some level he liked for me to be unstable because it allowed him to feel superior to me. The constant criticism, lack of empathy, and chronic invalidation of my feelings decimated my self-worth. At this time I would frequently call out of work and was often so fixated on my paranoia about the relationship my ex was having with his assistant that I could not concentrate. I got fired from my job and immediately got pregnant again. We decided that I would not look for another job and would instead focus on having a healthy pregnancy.

My ex had been trying to get me to sign a prenuptial agreement since our engagement 4.5 years ago and I have always resisted. This past October he increased his pressure and bullying about getting legally married and said that he could save a lot of money on his taxes if we married before the end of the calendar year. He told me that he would reimburse me for my lawyer fees if they were $2K or less.

I was so brainwashed by him that I almost just signed the agreement and didn’t even get an attorney. Fortunately, my sister insisted that I find a competent attorney and suggested I show the agreement to my uncle. My uncle said to me, “This agreement makes it very difficult for you to leave him, but very cheap for him to get rid of you one day.”

When my uncle insisted that my ex should agree to always pay for both my and our daughters health insurance, and our daughter’s education, my ex became enraged and they got into a screaming match. My ex felt that I had betrayed him by showing the prenup to my uncle and to my sister and specifically seemed to be bothered that they had both seen his financial disclosure. It was the issue of the prenup that finally opened my eyes to the fact that my ex did not in fact have my best interests in mind. – Rosa, A Survivor of 5 Years of a Financially Abusive Relationship 

Economic Exploitation

When an abuser intentionally destroys their victim’s financial resources or credit, it is known as economic exploitation and it is arguably the most severe aspect of financial abuse. 

I gave birth to our daughter in January, 2020. Around this time my ex suggested that I not pay my medical bills and should let them go to collections so that I could negotiate the bills and pay smaller amounts. I stupidly did this and ruined my credit. My ex had offered to pay the bills after I negotiated them down – but he never did. The first year of our daughter’s life I did not work and I lived off of my savings. I went from a person who very much enjoyed “retail therapy” to someone fearful of not having enough money to pay my credit card bill and worrying that if I bought something that wasn’t second-hand I would get yelled at when I came home. 

When our daughter turned one, my ex told me that his accountant suggested paying me a salary of $34K/year as an employee so that he could deduct it as a business expense. My ex only agreed to do this if I put 75% of the salary into a joint account, which I agreed to do. My ex also advised my mother not to hire an attorney to handle her estate before she passed away which wound up costing me and my sister $60K more in taxes not to mention aggravation and stress. After my mother died, my ex wanted me and my sister to sell her house. In retrospect I believe that he pressured me to sell my apartment and also to sell my mother’s house because he didn’t want me to have a place to go should I ever leave him. – Rosa, A Survivor of 5 Years of a Financially Abusive Relationship

We chose to write about economic exploitation last because in a study we conducted among 50 victims of financial abuse who’ve experienced every single type of financial abuse that we outlined, we found that 90% of the study participants believed that they experienced financial abuse in the following order.

1. The Abuser “Takes Care” of the Finances
2. Employment Sabotage
3. Economic Exploitation 

Since economic exploitation is certainly the most severe form of financial abuse, we hope that this study serves as a reminder that the self-centeredness and sense of entitlement that an abuser possesses causes them to take and take and take until their victim has nothing left to give.

It is our hope that this encourages you to avoid normalizing, rationalizing or justifying any type of abusive behavior that may be occurring in your own life.

Why? 

The chain that keeps most victims of abusive relationships tethered to their abuser is made up of cognitive dissonance. Cognitive dissonance is a theory that suggests when we experience an inconsistency among the information we have, the behavior we see and our own beliefs, it causes an insane amount of psychological tension. 

To ease this tension we will change one or more of the inconsistencies to make everything consistent. For example, imagine that you were trying to quit smoking. You have all the latest gadgets to help you break the cycle, but it is not easing the psychological tension you’re feeling from not being able to smoke.

What do you do? Do you fight the urges you have or do you convince yourself that a few puffs won’t set you back? If cognitive dissonance was present, you’d convince yourself that a few puffs weren’t going to set you back even though you know the consequences. 

Well, this same principle applies to abusive relationships.

The abuser often spends months grooming their victim by portraying themselves as the victim’s soulmate, best friend, friendly co-worker or beloved family member. 

Cognitive dissonance comes when the abuser switches from charming and charismatic to abusive. It forces the victim to decide between acknowledging that someone they thought was perfect is actually an abuser or finding a way to rationalize, normalize and/or justify the abuser’s behavior. Unfortunately, many victims of abusive relationships choose the second option…

What Should You Take Away From This Article?

Knowledge is the best defense against all types of abusive behavior patterns, especially when it comes to financial abuse. Along with getting financially educated and ensuring that you’re in possession of essential documents you should be sure to educate yourself on the hidden aspects of financial abuse. 

---

Disclaimer

This information is for educational purposes only and is not intended to be a substitute for clinical care. Please consult a health care provider for guidance specific to your case.