Lack of financial control or financial awareness can have long-term consequences. In the second essay of our series for Financial Literacy Month, we explore the link between intimate partner violence and financial well-being.
Margaret Williams, not her real name, was initially content to let her husband handle all the financial and career planning in their relationship.
Williams said, “He told me that it would be best for the family if I focused on raising the kids and worked part-time for his business.” So, essentially, what happened was that I wasn’t developing any marketable skills. He managed everything related to finances, and I didn’t realize that all the things he did were advantageous to him until much later.
By “later,” she means when her husband’s physical and mental abuse had pushed her to the brink of a breakdown, and she was contemplating ending the marriage.
She claims that when things got out of hand, he threatened to withdraw all their funds from their joint accounts. “That was all of our wealth because he was the only one actually employed.”
Williams continues, “And that’s exactly what happened after I ended the marriage. I had very little left.”
However, economic abuse persisted even after they closed the joint account. After the marriage, her ex-husband not only refused to pay the court-ordered child support, but he also damaged her credit history, leaving her with little choice but to accumulate debt on a family member’s line of credit.
Sadly, these stories are all too common. While intimate partner violence (IPV) is often associated with physical, sexual, and emotional abuse, it also occurs in an estimated 99 percent of IPV cases.
The individual being targeted may find it particularly difficult to escape their situation due to financial abuse, which also significantly hampers a survivor’s recovery and mental health.
According to Dr. Kristina Nikolova, whose research at the University of Windsor focuses on economic abuse, “Your recovery will take much longer than it otherwise would if you don’t have the financial means to access mental health services.” However, despite its detrimental effects, assisting those affected by it is a frequently overlooked issue in Canada.
According to Haileyesus Meseret, CEO and founder of the Canadian Center for Women’s Empowerment (CCFWE), “We have good shelters, food banks, evacuation support systems, and crisis hotlines.” However, survivors also need a robust plan for financial empowerment. CCFWE provides various resources, including financial literacy workshops and checklists for those who have experienced financial abuse, as well as advocates for systemic change, which begins with raising awareness.
Haileyesus says, “This type of violence hasn’t really been accurately defined in Canada.” When it is, it’s usually broken down into three categories: work, education, and education.
The second category is financial exploitation, which can involve destroying a partner’s property (such as their homes or cars) or their finances through gambling, extravagant spending, or the imposition of costly guardianship and divorce proceedings. According to Nikolova, the offender may accumulate debt in the victim’s name through financial exploitation. There is fraud legislation in place for this, but it can be very difficult to determine who genuinely owes money in a close relationship.
Employment sabotage, which involves withholding vehicles, confining victims, or stalking them at work, is the third type. Nikolova claims that even though IPV directly leads to absenteeism or poor job performance, employers often fail to recognize financial abuse.
Haileyesus Meseret
She argues that although workplaces in Ontario are required to have policies and safety protocols for handling domestic violence, people rarely receive this training. As a result, it often goes unnoticed unless someone shows up screaming, shouting, and brandishing a weapon. In that case, the victim may get some leeway and avoid losing her job due to the abuse.
Other experts in the field and those who have personally experienced financial abuse claim that businesses, even unintentionally, collude with the abuser. Williams claims that based on her experience during her divorce and separation, she concluded that the legal system is poorly understood, making it easy for perpetrators to take advantage of it.
She says, “I always assumed that the law and the courts would protect the well-being of children when things went south.” I thought that, but I was completely unaware that this was not the case at all. This is not the society I would hope for my children to inherit one day, and I’m truly sorry to say that.
Although Canada’s Divorce Act was amended in 2021 to recognize the role of financial abuse in gender inequality, the overall system needs a major overhaul to make a significant difference. For instance, Williams says that family responsibility offices are toothless when it comes to enforcing child support payments, at least in her province.
Regarding women’s awareness of financial abuse, there is also much room for improvement, from coverage to healthcare. CCFWE estimates that about two-thirds of social and healthcare workers lack training in screening for economic abuse, which is why the organization has developed a screening tool for service providers.
However, since the financial sector is where the majority of financial abuse occurs, it is likely to have the greatest impact. According to Haileyesus, new initiatives that make it easier for survivors to access credit and personal bank accounts have led to programs being established in banks in Australia and the United Kingdom to assist victims of economic abuse.
One British bank updated its app earlier this year to allow users to mute the messages that come with money transfers, so they won’t see any threats that abusers might make regarding alimony or child support payments. This is an illustrative example of the many systemic gaps and oversights that allow economic abuse to persist even after a relationship has ended, even though it may seem minor compared to repairing damaged credit.
However, much remains to be done in Canada. Haileyesus says, “Our banking system is not designed to assist these victims due to a lack of policies and attention.” CCFWE “launched a provincial report on economic abuse earlier this fall that included policy recommendations aimed at the financial industry.”
For Nikolova, these gaps have immediate, practical consequences for individuals that prevent them from recovering and achieving positive mental health outcomes. This is especially true for Indigenous, African, Caribbean, and Black individuals, who generally face greater bias from the legal, healthcare, and financial systems, according to her research. “We have found that financial stress is highly correlated with issues like anxiety, depression, and worsening PTSD symptoms,” she says, “and we are now measuring it as one of the assessments with survivors to see how it is affecting them. Research shows that women who have experienced financial abuse still have a lower socioeconomic status than their peers, even five or ten years after their relationship ends.
Williams has been dealing with her ex-husband’s depression and ongoing financial abuse for several years after their separation. He frequently tells her that she won’t succeed on her own, but she insists that this is untrue. “It’s almost as if the abuse continues and adds insult to previous injury, making it difficult for you to truly focus on recovery and rebuilding your life because I’m trying so hard to be in recovery mode,” she says.
Despite these challenges, Williams is confident that she will overcome financial abuse thanks to her renewed commitment to independence, which she wants to model for her children. With that determination, she is able to navigate the daily challenges of balancing work, caregiving, retraining for a new job, and dealing with the courts.
Resource: The Canadian Women’s Foundation provides support services throughout Canada.