Addiction presents its ugliness in many forms, such as drug and alcohol abuse, compulsive gambling and over or undereating, just to name a few.
While there are a variety of addictions, many of the symptoms of behavioral disorders overlap. Families and the addict are eventually affected financially and emotionally. Sometimes relationships become so severely damaged they cease to exist.
Often, family members support the person’s addiction without realizing it. Once aware of the problem, it is important to consider and establish some firm boundaries, however difficult. Are you willing to see your loved one spend time in jail instead of covering their legal fees? Are you willing to see them evicted or living on the street instead of paying their living expenses? How many months are you willing to pay their rent if they are not addressing their addiction?
Setting boundaries will not cure your loved one of their addiction or guarantee that they seek help, but it will help you to manage your life without financial ruin. Ultimately, all you can control is how well you look after your own health and welfare.
Without support or resources, navigating through the emotional strain and financial pressures of addiction will be difficult. The Substance Abuse and Mental Health Services Administration agency within the U.S. Department of Health and Human Services provides resources that address the topic of addiction for both the addict and their family. SAMHSA’s mission is to reduce the impact of substance abuse and mental illness on America’s communities. They can be reached at 1-800-662 HELP (4357) or at samhsa.gov.
One of the consequences of economic ruin is having bad credit. With this burden, people in recovery will struggle to be approved when applying for credit cards or loans. Even if they are sober; banks and other financial institutions will be wary of allowing a line of credit to a person who has, in the past, demonstrated poor judgment and decision-making skills. This may mean that even the basics of a loan to get back on their feet, or a housing application for a place to live, will become much more difficult than usual.
It’s unrealistic to expect a newly sober person to simply resume their financial existence from before their addiction took hold. Consider seeking help from a financial adviser who knows how and where to apply for financial aid, secure loans, find scholarships or grants and qualify for special payment plans that can help cover the cost of treatment and other damages incurred because of addiction.
While recovering financially will not be easy, there are tools to assist with this phase.
Next Step Prepaid Mastercard — Developed by three recovering addicts, this prepaid card is specifically for people in recovery. It comes with controls that block certain ATM or point-of-sale transactions, such as those at liquor stores, casinos, bars, escort services, and selected online retailers. The card cannot be used to get cashback.
The card must be cosigned by a responsible person in the individual’s life. The cosigner is responsible for the actual loading and transferring of funds; a companion card is given to the individual who uses it for purchases. There are daily spending limits and maximum monthly transactions placed on the Next Step card, and the card’s use can be monitored online for accountability purposes.
True Link prepaid Visa Card — The True Link Prepaid Visa Card is a reloadable prepaid Visa card created to meet the complex needs of the underserved. This card allows a person to buy items and pay bills without carrying cash. Access can be blocked for purchases in bars, online, and other risky places. The card can also be set up to be accepted at certain merchants. It offers access to real-time alerts if the card is attempted to be used at a blocked location, such as a liquor store.
Even though it is difficult to watch a loved one lose control of their life, family members should not financially rescue or support the addict. Let the addict experience the consequences of their disease. Think carefully about helping an addict, establish boundaries, and clearly understand the long-term ramifications to your finances. By financially supporting the addict, you are supporting their addiction, while possibly placing your own finances at risk.
Teri Parker CFP® is a vice president for CAPTRUST Financial Advisors. She has practiced in the field of financial planning and investment management since 2000. Reach her via email at Teri.parker@captrustadvisors.com.
