Drug and alcohol addiction can ruin an addict’s health, destroy relationships, and destroy mental health, but it can also do some serious damage to his or her personal financial situation, and getting finances back on track can be a daunting task.
Not only are drugs and alcohol expensive, but the nature of addiction often leads addicts to spend beyond their means. To someone with alcohol addiction, the choice between being able to afford rent and being able to afford another 12 pack of beer is often a simple one.
Substance abuse and mental health issues that are often associated with it lead addicts to overspend, go into debt, lose their jobs, and even steal from friends and loved ones. For this reason, one of the first difficulties many addicts experience in the recovery process, whether in or out of a treatment center, is rebuilding their personal finances.
Financial Woes Due to Addiction
In a survey of Americans, 82% of people surveyed said that their loved one with a substance abuse disorder experienced financial difficulties. Among addicts, 48% drained their retirement savings to pay for drugs and alcohol. 11% filed for bankruptcy. In a follow-up study with Americans whose loved one suffers from a substance abuse disorder, friends and family noted that credit card companies do not offer assistance or forgiveness to recovering addicts. They also expressed concern that lack of access to funds could result in relapse.
Addiction is often a burden for the families of addicts as well. Many families, concerned that access to money is a danger, will choose to disinherit their addict loved one during estate planning. For San Francisco-based writer David Shef, not only was his son’s substance abuse a financial drain on the family’s resources, but the recovery process itself was.
While going to rehabilitation program after rehabilitation program, Shef’s son’s insurance eventually ran out and he was forced to pay almost $100,000 out of pocket. They found that the cost of addiction doesn’t simply end when addiction does. Recovery forces addicts and their families to be very proactive about ensuring a safe financial future.
Getting Finances Back On Track : Financial Planning for Recovering Addicts
Upon setting out on a course of financial planning, it is crucial for recovering addicts to take sound financial advice from whatever resources or financial services they have available. Before making additional financial goals, however, it is important to assess three different aspects of your financial situation:
- Assess your debt situation.
- Assess what assets and sources of income you have.
- Assess what you need to live. What are your monthly bills?
After you’ve done this, the next step is to open up a bank account and set up a budget that takes into account income and expenses. There are many financial products for creating a budget, but one simple resource is You Need a Budget, an online platform that connects to a user’s bank account to make the process of inputting data far simpler than old fashioned pen-and-paper budgets.
How To Get Finances Back On Track : Dealing with Debt in Recovery
If you are in considerable debt, it might be worthwhile to reach out to a credit counseling agency. While there’s no magic pill to eliminate debt, a credit counseling agency can assist you in creating a debt management plan. In rare cases, it might even be possible to refinance certain loans or even get debt forgiveness. Thus, it is important to seek help to see what options exist for your particular financial situation.
One common result of massive debt is a poor credit score. Rebuilding credit is important for recovering addicts so that they can finance a car, a home, and have more financial flexibility down the road. After paying off debts, the most important actions to take to help minimize damage and rebuild ones credit are:
- Don’t apply for loans and credit cards that aren’t strictly necessary
- Make sure whatever loans you’re taking out can be covered by monthly income
- Automate payments
- Pay down credit cards with the higher utilization first
Finding a Job in Recovery
While many addicts are indeed able to hold a job during their addiction, it is a fact that many addicts and alcoholics in their first few weeks in recovery are starting from rock bottom. Depending on the recovery options the addict is using, whether at a halfway house or sober living home, staff will generally guide recovering addicts in obtaining and holding down a job.
Some even have job placement services that can put addicts in touch with recovery-minded employers. Behavioral therapies can also assist in helping addicts develop the skills necessary to keep the job.
The key aspect of financial recovery that recovering addicts should keep in mind is that seeking help is not wrong. Using financial resources and taking advice is crucial to rebuilding ones credit and finding employment. The first step to recovering from an addiction and becoming drug free long term is admitting the problem and seeking outside help, and the same principle applies to getting finances back on track. Luckily, often the same resources will provide assistance for both problems.
According to the National Institute on Drug Abuse, recovery houses are excellent resources for managing finances and finding employment. While recovering from financial problems might seem insurmountable at first, especially in the first few months of addiction recovery, by seeking outside help and creating a manageable financial plan, recovery is possible.