Introduction.
A friend recently asked about abuse in relationships, and didn’t know whether they had wandered into abad relationship. So after a discussion with them I pointed out a number of factors that could point to control or manipulation and therefore abuse.
The things discussed I decided I’d share with all, this therefore is the first part of many that I will write about over the next year, it is a personal view and certainly not the be all and end all, so if you find yourself thinking, “am I being controlled” have a read of the articles and if they ring alarm bells with yourself, talk to professional help about how you can get yourself to a better place.
If anyone finds these useful but would like to me to write on a specific topic, feel free to drop me an email here: michelle@shellsshots.com and I will attempt to provide general insight and research on the particular topic. First topic… financial control.
Abuse by Financial Control
The is very easily perpetrated both deliberately and accidentally where one person in a couple earns money and the other does not… e.g. husband and wife.
There are three main types a couple will control finances:
- All money earned by both parties goes into a ‘joint account’ (and maybe a personal account each that money is shared out into.)
- All money earned by both parties goes into their own personal account and some of that is shared
- All money earned by both parties goes into their own personal account and financial responsibilities are shared but no money is shared.
Depending on where in the world you live will depend on whether one is more common than another, and indeed your relationship status (e.g. married or living together) will also have baring on your choice of sharing.
The list should be fairly self explanatory why each is used and how it does, but in the event of it not being quite ‘your fit’ I will explain:
All money earned is shared.
Quite simply all money you and your partner earns will go directly into a joint account, and from there all the bills are paid, shopping and groceries are paid etc. Some couples will also have their own (savings) accounts where a fixed amount (either directly or percentage of earnings) will be transferred out to their own accounts for ‘special items’.. e.g. treats for themselves, birthday presents for their partner, habits (like smoking) etc…
This type of arrangement is the most ideal as it gives full financial freedom to both parties whilst ensuring responsibilities to the household are met.
The two ways these are usually abused:
- Where one partner will require the statements of the other’s personal account to checkup what money is being spent and where.
- When the relationship breaks down, and either the account is emptied or frozen by one party to abuse the other.
The second reason given is the most common why people seem not to use joint accounts in this way.
All money is kept separate with a join responsibilities account.
This is the method where your wages/earnings are paid into an account that is your sole responsibility and you have an agreement to pay either a fixed amount or percentage of your earnings into a shared account.
This type of arrangement has a distinct advantage over the ‘All money is shared‘ method in that should things go wrong the other party cannot freeze your access to money. However, it also has the disadvantage that if you are not earning anything, you have no money that is not also shared. Of course it also suffers like all three methods if one partner is demanding details on payments made from personal accounts.
Personally I have had most of my relationships in this type of arrangement, those that weren’t where I was not living with the other person and the relationship had not gotten to the level where finances could be shared. This has been suggested at times that I could be controlling my partner (and indeed in some cases I was, blatantly, but with their full knowledge and reason (which is where I consider it not abuse.))
In my case, my partner was not earning any money and I was putting in a non insignificant amount of money into the joint account for them to take care of responsibilities, like paying for food, petrol, buying clothes etc. The problem for my partner of the time was that there was not enough money to get a lot of clothes, or to buy designer items etc.. I had to point out to them on multiple occasions, that out of my personal account, I was paying the rent/mortgage, car loans, personal loans for joint items, household bills (water/electricity/phone etc) and the actual amount of left over money after putting money into the joint account was less than the money I put in the joint account. This was very controlling and I was constantly aware of it and even though I knew they had the better end of the deal I constantly felt guilty about it. The situation changed after a couple of years as loans got paid off and my partner got work (and therefore started contributing) and the situation ended up with spare money in the joint account and several thousand in savings in each of our personal accounts.
I never ask my partner what they are spending their personal money on, and they never ask what I am spending on either, however, to give an idea of how it works… I smoke and drink, I buy all of my vices from my personal account. I buy presents from my personal account. If I want a new phone or computer I buy it out of my personal account (well not exactly.. but will explain towards the end.) My partner does the same, except they rarely drink and don’t smoke but they do like their designer label clothes, so they buy them from there.. they also want plastic surgery so again, they are saving money to pay for it from there.
Completely separate finances.
This type of financial arrangement is usually what you see at the beginning of any relationship, but often it continues even after marriage. When it is mutual agreement (as in both parties have said, they want it this way, not one wanting it and the other not or being persuaded against it) it is fairly safe from abuse. Like the other two arrangements the classic abuse sign is when one partner will demand the see what the other is spending money on.
It does have an advantage in that at the end of a relationship everything becomes quite easy to separate and its difficult if not impossible to abuse the other by ‘cutting them off from their own money’… however it is also the most easily abused where one partner is working and the other not (regardless of whether the relationship has ended or is ongoing.)
The problem and abuse, quite surprisingly to many, can come from either side of the relationship:
- The partner not earning can demand, manipulate, control the person earning by constantly playing on the fact they have no money of their own and how they are doing things for their partner all the time. This ‘doing things’ can be anything, like cooking, cleaning, looking after children or even sexual favours.
- The partner earning can control and manipulate the person not earning into doing things they don’t want/like to do by withholding money unless their wishes are fulfilled (this you, the reader, probably guessed already.)
A note on business accounts.
To add a complication to these seemingly simply ways to abuse are when there is a business account brought into the equation. Business accounts are used for business things (obviously) however in many countries (e.g. Australia) they are also used in a legal tax avoidance method, and illegal if you don’t know the rules. In Australia, there are two main types of business an individual or couple will own, either a straight ‘ABN’ which is basically the same as being self employed, or a ‘ACN’ which is where there is a legal company entity. Any ACN will also have an ABN, an ACN is where the company name is followed by ‘Pty Ltd’ and is similar to the UK where you have ‘limited companies’ these are companies that have been setup with shares and have limited liability, but are privately owned and not on the stock market. ABNs are used more like a ‘trading as’ so the money earned and any liabilities come back to those listed as the owners. Each has its advantage and disadvantage when it comes to tax and responsibilities in regards to those with financial interests… talk to a financial advisor and accountant about what is better/safer for you and your circumstances. However, something to beware of and can result in some extreme forms of abuse is where one of the couple owns the shares in the business and the other does not work for the company but gets tax breaks from it. This is mostly illegal and can result in severe penalties including jail.
For example if one partner has a company car, phone, computers etc and uses them for personal use they have a FBT (Fringe Benefits Tax) liability. It is not uncommon for the abuser to fail to mention it, and then use it as leverage at a later date. Similarly if one spends money from a business account (that are not wages of employees), the law requires the money is viewed as a loan and has to have a specific payment plan with interest specified etc.
The biggest lesson here, and something my accountant warned me of just last week, if your partner gives you a corporate card (credit or debit) you MUST ensure you only use it for things directly related to the company.. and you must be ready to prove it to the tax office. You could end up in court facing fraud and/or embezzlement charges (both of which carry jail time for first offenders) if you cannot. Charges can even be laid if you have used the card for company business if you are not an official employee, though it is rare for this to happen, and usually will only occur when the ‘owner’ says the payment was unauthorised. An example of how you can cross the line is if you own a car dealership, purchasing a camera and computers would be completely expected, however expensing food and travel to locations that don’t relate to the delivery or purchase of a vehicle for the business will be questioned. Similarly running an online business (such as mine) purchasing $2000-3000 worth of designer clothes would probably be ignored the first time as I would need professional clothing for meeting business partners and customers, however if I was doing it every month, I would expect to be audited very quickly. In summary, if you are in a relationship where your partner has a business and you are spending company money, make sure it’s on only company related stuff and you are either a shareholder or employee of the company otherwise you could be in serious trouble when you don’t do as you are told.
Finally…
The key to knowing whether there is manipulation and therefore abuse when it comes to finances is communication. If one person is controlling the money and examining where it is going, it doesn’t automatically mean there is abuse… especially if the finances are tight. However, if money is plentiful (who has this nowadays?!??!) and a person finds them having the explain every purchase or beg for money its at the other end of the spectrum and most likely abuse. If you communicate with each other and things are explained and you know where and why purchases can and cannot be made then even if money seems ok it maybe your partner is just trying to keep it there.