Financial Literacy Blog

Financial abuse in a child/parent relationship Link

Parental financial abuse is a common form of child abuse. This is a complex issue where the parent uses money as a weapon to take advantage of a minor. This can be done by stealing a child’s money or by using their personal information for economic gain. It is important to know the warning signs so you can help prevent or stop the abuse. Sometimes parents will use a child’s information to apply for credit cards, take out loans, or to make big purchases they cannot afford. This leaves the child with damaged credit and severe debt before they even hit adulthood. This can leave the victim in a constant poverty struggle once they get older. Credit scores are looked at by employers, landlords, and banks. This can make it difficult for them to get a loan for college, a mortgage on a house, or a loan for a car. Financial abuse can cause lifelong damage to a child’s future.

Financial abuse can be hard to identify because it is invisible compared to physical abuse. Children most likely won’t know they have been financially abused until it is too late, and the damage is done. Some parents do not realize the negative consequences of exploiting their child’s money. Since it is hard for a child to know what is going on, it is important for adults close to the children to be aware of red flags for financial abuse. This form of abuse may be happening if a child has a credit report, receives credit or bank information in their name, a parent consistently takes the child’s gifted/earned money and never allows them to have access to it, a parent demands all money given to the child to be placed in the parent’s name, or if the child is punished for spending their own money.

If financial abuse is suspected, there are a few steps you can take. First, have a conversation with the parents if it is safe to do so. Some parents do not think through the consequences of these actions. Educating them can help put a stop to this abusive behavior. You can also obtain a credit report using the child’s name to see if there is any damage. This will also act as proof in any legal matters. The next step would be to contact the lenders to cancel and come up with a payment plan.

By: Rachel Salmon

Oct. 2022

Reference: What is financial child abuse? (n.d.). ENDCAN. Retrieved October 10, 2022, from

https://endcan.org/2021/10/21/3-forms-of-financial-child-abuse/

Why Shame Resilience is Important in Finances Link

It can be hard to admit to or proclaim the things we don’t know – we may feel embarrassed, less than, or at a disadvantage to our peers when we speak up and let those around us know we are experiencing confusion or uncertainty. This fear of vulnerability can steam from feeling shame and utilizing shame and insecurity can be a vital tool when we are in an abusive or coercive situation, including when we may be subject to financial abuse.

Building up shame resilience can lead to a healthy sense of self and allow you to see the warning signs of financial abuse and plan to step away from those abusive behaviors if necessary.

You can start with a few actionable and immediate measures:

Ask for help.

In the Office of Financial Literacy, we refer to asking for help as exercising a skill or muscle. Often, we learn that asking for help may put a burden on others and this can make us self-conscious in doing so, we must learn and utilize this skill regularly so as to not get rusty and stop reaching out. Lean into asking for assistance in small tasks and around your schoolwork, and keep track of how often and how often you are greeted with kindness and grace.

 Give a sincere apology.

Saying sorry can feel shameful and humiliating because we must admit to being wrong. But accountability is important, both in others and ourselves. The better we are at providing sincere apologies that can be held to actionable change, the more equipped we are to fight off the immediate shame that follows. This increases self-awareness and helps identify when we might be OVER-apologizing, too.

Adjust for accuracy.

Changing your language to help reality check instead of allowing negative self-talk and internal criticism to push you toward shame is an actionable step you can take today and will improve your relationship with personal finances almost immediately. Not everyone will prioritize or value the same things you might, nor will their version of success, joy or livelihood look like your own and verbally recognizing this will help you quell the impulsive purchasing habits that might come with wanting material things others have or feeling left out or left behind because certain opportunities do not fit your financial scope right now. Although those moments can be frustrating and should be acknowledged as such, often it can feel less damaging and hurtful if you put into words why you might be feeling that way and if this is truly a priority for yourself.

 Pass along your knowledge.

Sharing is caring and connecting. Connection fosters belonging and is the antithesis of shame. The more you learn and share with your peers and those around you, the more you are able to learn and grow into yourself. You can set goals without being influenced by other’s success but instead inspired by their knowledge and sense of know-how. The exchange of information allows you to better understand how other’s might see the world and their own personal finances and creates opportunities for shared vulnerability, which helps fight back and resist shame when we understand where one another is coming from.

By: Karina Anderson McNary

Oct. 2022