Abuse takes on various forms, many of which we are familiar with. Physical abuse, sexual abuse, emotionally abuse, and even psychological abuse seem to be more mainstream words these days. While these types of abuse are out there and extremely negative, there are also forms of abuse that do not get enough light shed on them.
One of those is financial abuse by parents, or parental financial abuse. This type of abuse can be difficult to recognize due to children not always being aware of the ins and outs of finances, bank accounts, and other forms of financial management.
What Counts as Financial Child Abuse?
Financial child abuse is using money to take advantage of a child. It can be described as family members exploit a child’s finances for their own personal gain or financial health. Financial abuse does look different from other forms of abuse, however that does not make it any less important or detrimental. Many times financial child abuse is done from a parent to a child, however it can also come from any other family member or individual to another.
Why Would a Parent Financially Abuse Their Children?
It can be difficult to understand why a parent would financially abuse their child. Some parents abuse their child in a financial way to control their child and prevent them from gaining their own independence. This is a big component in codependent parent child relationships. Financial abuse against a child can also be an aspect of a relationship with a narcissistic parent or other family member. It is not uncommon for narcissistic abusers to utilize money and finances to gain power and control.
There are also caregivers who may be in poor financial situations and their family is dependent on them. Situations like these may lead to financial abuse of a child through taking out loans or credit cards in a child’s name.
Examples of Parental Financial Abuse
There are many examples of parental financial abuse that expand past the information provided in this article. To summarize each of the examples into one definition, parental financial abuse involves using or managing bank accounts, involves credit cards and lines of credit, making financial decisions and more, all for economic gain. Often, a child or teenager is not aware that their parent or family member has been financially abusing them until they try to apply for a credit card, take out a loan, or open up a bank account.
Taking Credit Cards or Loans Out in Your Name
One of the most common forms of financial abuse by parents is opening up a credit card in the child’s name. In addition to this, parents may also take out a loan in their name of their child. This is technically a form of identity theft, which is defined as using someone else’s personal information that is sensitive to commit fraud.
Just because parents may be related to their child and manage their finances when the child is young, it is not okay for them to take out credit cards or loans in their child’s name for ill intent. This type of financial abuse can significantly impact the line of credit in the child’s name, creating problems for them in the future for many financial endeavors.
Constant “Borrowing” of Money
Another form of financial abuse from parents is constantly borrowing money from their children. This may be parents taking money from their child’s saving account, cashing in savings bonds that are given in their child’s name, or borrowing money from a teenager who has a job. This may put a teenager or older child into a strange position where they want to help their parent and also feel like none of their money is for them at the end of the day.
Usually when parents borrow money from their child and they are financially abusing them, the money is never returned or reimbursed.
Outright Stealing
Financial abuse by a parent can look like simply stealing a child’s money. Examples of a parent stealing money from their child could be sneaking bills from their teenagers, withdrawing money from a bank account, transferring money to their own bank accounts, or taking money that is gifted to their child for special events. Similar to parents borrowing money, it can be difficult for a child or teenager to speak up to their parent in regards to this type of situation.
Forcing You To Take Out Loans or Spend Money
Parents can financially abuse their child by forcing them to take out loans, which has heavy financial impacts on the child’s line of credit. Loans exist to lend people money that they then pay back at an interest rate, however there are times where a child does not know a parent has taken a loan out in their name.
When situations like this occur, a child may grow up and apply for another loan but get denied. The unfortunate thing about parents taking out loans in their child’s name is sometimes the child is not aware of this until it is too late and there has already been serious damage done to their line of credit.
Another form of abuse is parents forcing their children or teenagers to spend money on specific things. If this does occur, the parent usually is having their child’s money go towards things that benefit them, as the parent. They may phrase it as “helping the family”, however if true abuse is going on, the child will lose all of their money and the parent will gain significantly.
Draining a Joint Account
There are times where a parent and child will have a joint account. This can be a savings account that gets set up for the child when they are young to plan for financial stability in the future. It is not uncommon for a parent who is on the account to take money from it. It may start off as small amounts here and there, and occasionally can grow into the parent completely draining the account of all of the funds.
Again, with financial abuse the parent will not deposit any money back into the account or reimburse the money used.
Selling Your Valuables
If a parent is becoming desperate for money or financial gain, they may start to sell the valuables of a child. Not only is this financial abuse, but it can have emotional impacts on the child or teenager as well. Many times there is an attachment to valuable items, so if parents are selling those for their own benefit, it can create a lot of resentment and difficult feelings from child to parent. Like all of the other forms of financial abuse by a parent, there are many times this happens without the child’s knowledge, further creating tension in the parent/child relationship.
Other forms of financial abuse are:
- Control of how money is spent
- Limiting job opportunities for children
- Forcing child to overdraft accounts
- Parental refusal to work or contribute financially
- Refusing to pay bills
- Filing false insurance claims
What are the Long-Term Effects of Financial Child Abuse?
The long term effects of financial child abuse can be detrimental to a child as they grow up. One of the most common impacts is a ruined credit score in the child’s name. This creates issues when the child grows up and needs to apply for a loan, credit card, or even get a job. Unfortunately a low line of credit may lead to an individual experiencing financial destitution, or being very poor. With that comes a strew of emotional struggles as well.
Additional emotional impacts of financial child abuse include strains in family relationships, susceptibility to further abuse in relationships, poor self-esteem and potentially depression or anxiety. Children who have been financially abused by their parents or caregivers may also find themselves in a similar situation as an adult as a victim of financial abuse from a spouse, partner, or friend.
Some signs of financial abuse against child that an adult may recognize include:
- Inability to access bank accounts
- Difficult opening a bank account because one already exists in your name
- Unauthorized withdrawals from an existing account
- Bills or debt that you cannot explain
How to Escape Parental Financial Abuse (and Heal)
It can be incredibly difficult to come to terms that a parent or caregiver has been financially abusing you. Speaking up is hard to do, particularly to a parent, but there are ways to escape and heal from parental financial abuse. It can be helpful to obtain a credit report with the help of a trusted adult or friend to have evidence of the abuse. A trusted adult can also help to call existing loan companies or banks to cancel and shut down accounts, as well as help you explain your situation. Just like other forms of abuse, it can be helpful to speak to a trained mental health professional to get ongoing support and validation.
A final option for some individuals is to take litigation measures, or get the court of law involved to settle debts or determine appropriate consequences for the abuse.
Alyssa Biestek is a Licensed Marriage and Family Therapist (LMFT) in both Texas and Florida. She currently works for a small group practice and enjoys helping children, teenagers, and their families heal. Alyssa has experience providing treatment to high risk youth in a community mental health setting and is trained in Dialectical Behavioral Therapy (DBT) and Trauma Focused-Cognitive Behavioral Therapy (TF-CBT). She is currently furthering her education and training to become a Registered Play Therapist (RPT). In her spare time, Alyssa enjoys reading, crafting, spending time outdoors, and playing with her dog.
