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Getting Your Finances Back on Track after a Battle with Addiction


An addiction problem leaves no stone unturned; it affects every part of a person’s life, and finances are no exception. A drug habit costs money, and people in the addict’s life – family, friends, and even employers and coworkers – can be dragged down by the desperate need to keep the habit supplied. Getting your finances back on track after a battle with addiction can be a slow, frustrating process, but it is a necessary one to ensure that your life in recovery is as healthy and fulfilling as possible.

Wrecking the Economy

A report from the United States Surgeon General estimates that the “misuse of prescription drugs, illicit drugs or alcohol” costs the country $442 billion, in terms of lost productivity, stolen money, and other forms of embezzlement. Because the economic cost of addiction is “beyond staggering” (in the words of U.S. News & World Report), it can be hard to fully appreciate how financially devastating an addiction can be.

Even removed from an “economy-wrecking number” like $442 billion, substance abuse causes everyday money problems that can derail a relationship, a job, or even a life. When a drug addiction leads to the threat of a home foreclosure or vehicle repossession, an addict is often pushed to desperate measures to come up with money. It is not unheard of for employees to “borrow” money from their place of work, usually with the sincere intention of paying that money back when things get “better.”

But addictions being addictions, there is rarely an opportune moment when things improve enough for the person to make good on the pledge to give the money back. Addiction feeds on itself, continually raising the stakes and making its victims increasingly bolder and more desperate to keep going. What usually stops the pattern is when something goes wrong, and the person is caught; and when they are caught, the consequences are usually severe. In 2013, for example, a woman in Oklahoma was sentenced to 33 months in prison for taking money from ATMs that she serviced as a security guard and then gambling away as much as $70,000 in a single slot machine. Upon her release, she will have to pay $847,952 “in restitution to the corporate victims of her theft.”

How Addiction Ruins Finances

Addiction takes many forms – drug and alcohol abuse, compulsive gambling, or eating – but the symptoms of any kind of behavioral disorder overlap. Financial disaster is common to all forms of addiction; more and more money is needed to fund the habit, leaving bills, rent, and mortgages unpaid. Money is “borrowed” and never returned or outright stolen, or an employee steals increasingly large amounts of cash from work. Credit cards are maxed out, savings accounts are depleted, and getting more drugs or alcohol becomes the primary target of the next paycheck. This state of affairs is not sustainable; for many people, the end comes when they are evicted for non-payment of rent or fired because they were caught stealing money from work. Some lose their vehicles because car loans go unpaid for months; others reach the point where they have to resort to committing crimes (“Stolen Property Can Fuel Drug Addictions,” wrote local news in Wisconsin), even becoming sex workers just to stay afloat (“to an alcoholic and an addict,” says a writer in Jezebel, “[prostitution] just seemed like a good lifestyle fit.”)

Addiction takes on many forms, but they all end badly. CreditCards.com relates the story of a past meth addict who accumulated $40,000 in debt, and lost his car and his home, because of how his drug habit took over his life. In his words, “the financial hardships hang with an addict.”

Learning Financial Skills in Treatment

When a person enters a treatment facility for addiction treatment, part of the rehabilitation process involves extensive work with therapists, coaches, and other professionals experienced with life skill development. The work will cover things like job competencies, physical health and nutrition, relationship planning, and financial organization – seemingly simple for a person without a drug problem, but for a person in recovery, necessary steps to reconstruct the various aspects of life that have been upended by addiction.

Financial commitments don’t stop during treatment, and getting treatment is a financial obligation by itself. To start chipping away at the iceberg, a client will be guided through the process of making a list of every outstanding debt. This requires full trust and cooperation between the client and the counselor; going into the gritty details of how the addiction ruined the client’s life in many ways can be embarrassing, but there will be no judgment or condemnation from the counselor. This should encourage the client to honestly disclose all major recurring expenses, such as monthly mortgage or rent, home equity loan, line of credit, car loan or lease payments, insurance costs, credit cards that may have been maxed out because of the addiction, utilities, cellphone bills, and student loans, as applicable. Incidental expenses, such as food, clothes, and expenses for children, will also have to be factored in.

This list will provide an extensive, all-encompassing view of the client’s finances, which makes it easier to identify which expenses can be reduced or completely eliminated. Some difficult choices will have to be made, but with the guidance of the counselor, the net benefit for the austerity will be easier to accept and follow. Sacrifice is part of any recovery, whether that means no longer hanging out with old friends or cutting down on luxuries and comforts.

The idea is to get to the financial bottom line of what you cannot live without: utilities, food, and shelter. When this bottom line has a dollar amount, that is the target to hit.

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Family and Finances

The advantage of creating a meticulous budget is that it makes asking for help much easier. Family members are usually the ones most badly burned by the lies and betrayal of addiction, says the Chicago Times; but presenting them with a detailed payment plan, co-authored by a professional addiction counselor and/or a life coach trained in substance abuse recovery, will go a long way in regaining their trust. It will also show them that you are serious about putting your life back together. A tangible display of growth and maturity will demonstrate your trustworthiness and your investment in the recovery plan. There is a chance that your family will come together and offer you assistance, especially if it was their intervention that was the catalyst for you seeking treatment in the first place.

The financial damage caused by an addiction may mean that family members themselves are not in a position to help you as much as they would like, but their support with be nonetheless invaluable, either in terms of other ways they can help (providing transportation or childcare, for example) or the simple knowledge that they are willing to actively work with you as you repair your life.

One way to get everyone on the same page is for family members to be part of certain therapy and treatment services. Family involvement can play a huge role in rehabilitation, according to Psych Central, and joint counseling (conducted by a specialist who is trained in family dynamics and relationships) can help loved ones fully grasp the financial challenges that lie ahead. Understanding the need for realistic budgets is an important part of recovery, as are honest communication and spending time together.

There is only so much financial oversight that an addiction counselor can give; for that reason, they (or the treatment facility) will eventually recommend the services of a professional financial guidance counselor, someone who can offer more comprehensive and in-depth guidance. Your personal economic situation will determine how much you can pay for such a professional (another advantage of having a detailed budget), and federal, state, or local organizations can recommend the right kind of financial counselor for your financial and recovery situation. A financial guidance counselor knows how and where to get financial aid, how to secure loans, how to stay on top of those loans, how to find scholarships or grants, and how to qualify for special payment plans that can help cover your cost of treatment and other damages incurred as a result of your addiction.

Another way to putting your finances back together is to join an aftercare support network, like a 12-Step group. These groups don’t directly offer financial assistance, but they will offer accountability and encouragement in many of the challenges that come with recovery, including financial solvency and fidelity. The people in 12-Step groups have all been through similar experiences: losing everything to addiction, going through treatment, and getting their lives back on track. They will offer not only their experience and insight, but also their friendship and companionship to rely on. When the struggle to stay sober becomes too much, they will be there to help you over the hump; when the stress of being financially responsible becomes daunting, they will remind you that you’re not alone in your struggle.

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What to Do about Debt

One of the consequences of economic ruin is having bad credit. With this burden, people in recovery will struggle to apply 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 judgement 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, may become much more difficult than usual.

Speaking to CreditCards.com, a bankruptcy attorney recommends that people in recovery file for bankruptcy or a similar form of debt relief. If approved, this will allow the person to start from scratch and demonstrate their newfound trustworthiness. The attorney suggests that it may be too unrealistic to expect a newly sober person to simply resume their financial existence from before their addiction took hold.

Not all debts can be written off. If a person’s addiction led to divorce, there will be alimony and child support payments to make. Similarly, bankruptcy protection does not cover debt incurred through fraudulent means. So, if a person lied to creditors about why they needed money (such as claiming that the money was needed to put a loan on a house, but in reality, it used for drugs), the debt would not be discharged. These are known as “nondischargeable debts” and will still have to be paid even after filing for bankruptcy. However, retaining the services of a financial counselor (one experienced in working with addiction-related issues) can secure some measure of legal and financial relief when faced with nondischargeable debts.

Working with a counselor or a personal finance lawyer is vital to people in recovery who are trying to get their lives back together. The stress of debt can cause its own problems, (such as deep-seated anxiety or stress, according to The Huffington Post), which someone in recovery should be very wary of. A counselor or personal finance lawyer can help to devise a robust plan for rebuilding financial trustworthiness, keeping an eye on the bigger picture items and also focusing on the everyday needs of life.

Taking the ‘Next Step’

One way everyday needs can be met is through the innovation of a prepaid bank card meant specifically for people in recovery. The “Next Step” card 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 cash back. The card has to be cosigned by a responsible person in the individual’s life, such as a parent, other family member, or rehab sponsor. 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.

Using the Next Step Card isn’t cheap – it has a $14.95 monthly maintenance fee – but the businessmen who developed it (all three met in rehab) set it up in such a way to keep people in recovery “away from the addict’s number one gateway drug: cash.” Having easy access to money puts early recovery in jeopardy because the temptation to relapse is so easily facilitated. Gift cards, for example, can be easily traded in for cash; traditional debit and credit cards do not have purchase and amount restrictions, and banks are unlikely to issue credit cards to those fresh out of rehab.

Instead, the businessmen looked at the meal plan cards used on college campuses and designed the Next Step card “to promote healthy spending and help these cardholders stay away from impulsive spending.” Speaking to New York Daily News, an addiction specialist in Manhattan felt that the card has a role to play in recovery because it “teaches patients boundaries and limits.” Other people are skeptical, saying that the card robs individuals of the chance to mature and recover on their own terms, or that it is impossible to create a secure prepaid card to wall off all possible avenues of relapse.

Money as a Relapse Trigger

The point of money being the “number one gateway drug” is also made by Psych Central, which says that money can be an unexpected trigger for relapse. As much as being productive is good for anyone’s mental health, especially the wellbeing of a person in recovery, having more money than anticipated (through a promotion or a raise) can feel like an insidious temptation to put that money to bad use. “I earned it,” goes the train of thought, “so I have the right to use it however I want.”

Recovery can be frustrating, and when there is extra money available, making an impulsive purchase becomes that much easier. However, by being financially diligent and accountable, a person in recovery can control for the chance of being pulled off the wagon by money. By being alert to the signs of relapse, the person can check in with a recovery sponsor or family member when life starts to get busier and more stressful. This has the effect of heading off a potential relapse before it happens. Properly managing relationships is vital in any kind of recovery life, says Psych Central, and the relationship to money is no different.

The overconfidence that comes with having a full wallet is one of the blind spots in addiction, says Psychology Today. People in recovery are encouraged to take pride in their accomplishments and their new footing in post-recovery life, but the problems they have had with behavioral disorders and poor judgement in the past mean that their sentiments have to be kept in check. Getting a bonus at work is not dissimilar in risk to going a notable period of time without a relapse, to the point where the person feels entitled to a little indulgence. Counselors and coaches will help clients identify what overconfidence and complacency feel like, so when a client looks at their bank account and sees some disposable income, they can turn their thought processes into a positive behavior. This could entail transferring the money into a savings account or some other “off-limits” fund, or telling a sponsor or family member about the temptation to spend the money unwisely.

Working Hard at Financial Fidelity

Getting your finances back on track after a battle with addiction will not be an overnight process, and neither you nor your family should expect quick results. It might even become a source of stress in itself; waiting for months, perhaps even years, to see things turning around could become frustrating, with nothing but trust and faith that the counselor who helped devise the financial plan knew what they were doing.

Reconstructing finances could be a day-to-day ordeal, with the results only becoming evident much further down the road. This is one reason why family members should remain connected to a counseling program even after the client is discharged from an addiction treatment program. Recovery is a lifelong process, both for the recovering addict and for the people in their life. Putting finances back together is part of that process.

The task of paying off debts and fines, re-establishing credit, and building up savings requires close collaboration with a financial counselor. With their input, unnecessary expenses can be whittled down. Credit card use should be tightly monitored; for example, being smart about how to use it and not just saving it for emergencies. When times are good and there is more money coming in than expected, cash should not be left lying around the house; the temptation to use it for drugs or alcohol (or for gambling or compulsive eating) should not be underestimated. Having difficult conversations with the individual about why they cannot be trusted with a little extra money is one example of how getting finances back on track can be a tense experience.

Getting Finances Back on Track

As an extension of this, financial counselors may advise family members to assume control of all household finances or to put credit cards and loans in their name, including checking and savings accounts. This should be understood to be a way of safeguarding the family’s financial interests and not an expression of suspicion toward the person in recovery.
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Other things that can help are money management smartphone applications, which allow for real-time budgeting and tracking of income and expenses. While such applications are of use to anyone, they can be especially helpful for people in recovery, so they can better monitor their spending, share results with family members and sponsors, and cultivate a healthy attitude toward personal finance and budgeting.

Steps like these represent some of the examples that financial counselors might suggest to help get your money matters up and running well. Each client’s financial and family situations will be different, but the fundamentals of careful management, austerity, and accountability will likely remain the same. Having sound financial advice from a counselor, and being ready to make some tough decisions, will help make a good recovery plan into a reality.