Financial Recovery Steps 1 & 2

When someone you love is addicted, your finances often take a big hit. Bailing loved ones out of jail and other financial emergencies eat away at any cash on hand. Likewise, people who are rebuilding their life after addiction often face financial hardships. Treatment expenses and bills pile up. Here’s two simple things you can do to protect what you have and gain financial recovery.

1. Be Selfish And Secretive With Savings

Many times, fighting addiction is a matter of life and death. People are scared and desperate, and treatment is expensive. In these situations, spouses and parents don’t keep enough margin between them and disaster. Well known financial guru, Dave Ramsey, says step one is to keep an emergency fund.

Emergencies will happen; this is not an if type of crisis, this is a when situation. Not having enough cash on hand means depending on credit cards or cash advance services. Both charge big interest rates, but more importantly, both put you further behind. Dave recommends dropping everything to save $500 to $1,000 for the impending emergency. This logically makes sense, so why don’t people do this?

First, many people believe the best way to help their addicted loved-one is to sacrifice everything. Yet, this won’t work because if you really want to help, you have to be strong enough to help. You have to put yourself first, and you can only give of your excess. Don’t feel guilty about keeping a rainy day fund.

Others are driven by shame and pressure from creditors. Getting your life back on tract after addiction is an amazing accomplishment. It’s important to protect yourself financially first then work on paying back debts. Having a little bit in savings gives you a peace of mind that can help protect your sobriety.

Still others may feel trapped in an abusive relationship due to financial dependency. For many, having money means having choices. If you are in an unsafe relationship, you may have to open a new account at a new bank to keep your emergency fund safe.

2. Defend Your Fortress

Dave calls this protecting the “four walls.” Many times, people get trapped in the vicious debt management cycle. They run short of cash, so they charge things like gas and groceries. These bills run up quickly in crisis. Instead of meeting physical needs first, people feel obligated to protect their credit rating. What if they need to take out another credit card or borrow money for rehab? Making the credit card payment takes top priority, which only perpetuates the cycle of debt. To get off the debt cyclone, you have to make some tough choices. You may not have enough money to pay all of your bills. Which do you pay first?

Groceries Get Top Billing

If you really want to get control of your finances, cooking at home and taking a brown bag lunch are the first big change to make. You can save big money by keeping your fridge full of food. The path to financial recovery is not paved with empty pizza boxes.

Second, Pay Your Rent Or Mortgage

You have to have a roof over your head. Also, make sure to keep current with your utilities like electricity, water and natural gas.

Third, Pay For Transportation

If you have a job, you need to keep it, so you can keep on the path to financial recovery. To keep a job, you have to have a way to get there. Here you might have to make some tough choices. Driving a corvette when you can only afford a scooter won’t let you help anyone. However, repairs and payments on transportation you can afford must take priority over student loans and credit card debts.

The Last Wall Is Clothing

To keep a job, most places require you show up wearing something. Again, keeping your job is crucial, so reasonable clothing comes before credit card payments. Chanel and Ralph Lauren may not be reasonable at this time; you may have to consider shopping at a thrift shop.

As Dave says:

“If you have a place to live, it’s warm and the lights are on, your stomach is full of food and you have clothing to wear and a way to get to work, you live to fight another day. The worry starts to slip away. When your lights are getting ready to be cut off but MasterCard is current, that trips you up. That sends you into a tailspin. You will not win in that situation. Put the four walls of your home up first when you’re in a crisis situation. Then work your way through the other stuff.”

Usually, struggling financially is a symptom of another underlying cause. Family dynamics, co-occurring mental health disorders, and addictions often play a role in financial difficulties. Recovery Guidance lists family therapists and counselors that can help you address the root causes of your financial problems. Click here to find family counseling in your area.


Want help, but not sure where to start? Click here try our self-assessment guide.

How To Protect Your Finances From Addiction

It’s crucial to be safe when your loved one has a substance use disorder. Protect your finances and possessions so that you don’t have serious problems down the road.

Families With Drug Abusers Always Have Financial Difficulties

Drug abusers (and some people with behavior addictions) need money all the time to support their drug of choice. They use their families to get it by:

  • Going from one family member to another asking for money
  • Taking money from wallets and purses that are left unattended
  • Stealing valuables from their relatives’ home to sell
  • Scaring family members into providing money for them
  • Coercing or blackmailing family members who fear homelessness or worse behaviors if they don’t give money

The families that protect themselves against financial wreckage due to a substance abuser are the families that fare the best. Here are some tips to follow.

Protect Valuables In The Home

Know what and where your possessions are and monitor them. What to do:

  • Make a list of your assets and valuables
  • Know where everything is
  • Make sure your valuables all have your name on it
  • Engrave your name on jewelry when you can
  • Lock valuables away whenever possible
  • Alert everyone in the family that possessions are watched and monitored

Guard Your Wallet

Does the abuser have access to your wallet, cash, credit and debit cards? Does cash mysteriously disappear? Cash charged on a credit card costs more, and the credit card holder may be held responsible for the charges. Have you seen charges you don’t recognize on your cards? What to do:

  • Make sure your wallet or purse is always in a safe place not accessible to abuser
  • Keep your cash hidden
  • Keep your credit cards locked up
  • Check you balances frequently

Protect Bank Accounts And Investments

Who is in charge of the family money? Abuse occurs when the abuser is in charge of finances. Be aware of your family finances. What kind of bank and investment accounts do you have and where are they? You should have access to bank accounts and safety deposit accounts as well as investment accounts. What to do:

  • Be sure to have access to all bank accounts
  • Watch the balance to see if cash is going out
  • Start keeping some money separate for emergencies
  • Change passwords often for online banking accounts that you own
  • Check your safety deposit box if you keep valuables there
  • If you have an investment advisor alert him/her to potential problems

Grandma And Grandpa’s Finances

Abusers will go from family member to family member with sad stories and sometimes threats. The most vulnerable may well be grandma and grandpa. Is the abuser stealing from the grandparents or getting them to hand over social security checks? What to do:

  • Take an inventory of grandparents’ valuables in the home
  • Monitor what drugs they taking and make sure they are not kept in the open
  • Ask about investment accounts, bank accounts, debit cards, and other potential sources of cash
  • Keep in touch with them and other vulnerable family members
  • Pay special attention to jewelry, guns and other weapons, and tools

Legal Options

Check with your lawyer about your rights and liabilities as a spouse or parent.


Want help, but not sure where to start? Click here to try our self-assessment guide.