Tips for Managing Finances for People in Recovery
Substance abuse and addiction have a profound impact on the health of individuals, families, and communities nationwide. The current epidemic of addiction in America is widespread. Nearly half of all Americans (44%) have a loved one who is dealing with a substance use disorder (SUD) now or has dealt with one in the past .
It's no secret that substance abuse and addiction take a severe physical and mental toll on individuals, causing disruptions in every aspect of their lives. One significant and often understated consequence of addiction is the financial issues that individuals with a SUD face.
In a recent True Link survey, 82% of respondents reported that their loved ones experienced adverse financial effects due to their SUD. According to those respondents, the most common financial issues that their loved one faced as a result of their addiction included outstanding debts to family and friends (65%), neglected bills (50%), depleted savings or retirement accounts (48%), additional medical or legal expenses (43%), and more .
Navigating the physical and emotional stress of recovery is challenging enough. The added stress of managing the financial challenges associated with addiction and recovery can often jeopardize a person's recovery.
This article aims to provide financial tips for people in recovery from addiction and their loved ones with practical guidance and resources to aid in a successful recovery.
Managing Money While in Addiction Recovery
During recovery, a person with a SUD must learn how to change their thinking and take back control of their life from the addiction. Developing money management skills like budgeting, safer spending habits, and putting away savings is essential to a lasting recovery.
Although financial independence is necessary to a successful recovery, little attention is paid to the financial barriers that make it harder for someone to rebuild their life after addiction. Eight in ten adults with a loved one who has a SUD agree that regaining control of one's finances is among the biggest obstacles in recovering from a SUD . Without the support of traditional financial services and products, millions of Americans recovering from a SUD struggle to safely and effectively manage their money.
Money management in recovery is a balancing act. The financial challenges extend beyond settling outstanding debts and replenishing savings accounts. One of the most common challenges a person in recovery faces is re-learning how to safely spend money in their daily lives and avoid situations that may threaten their recovery.
Money Issues Can Be a Relapse Trigger
Money is a powerful trigger for recovering addicts. For many, money has played an integral role in fueling their addiction. Furthermore, money management is a skill that many recovering addicts may not have learned before developing a SUD or may have lost during their active addiction. Because of this, many loved ones of recovering addicts worry that direct access to money can result in a relapse.
Another money issue that can arise during recovery is reckless spending. Addicts often use the money to cope or fill the void left by a substance. It is easy to use spending to get the same "high" because it can trigger the same reward centers in the brain.
The key to preventing money from triggering a relapse is understanding what causes the trigger and learning how to avoid it. Limiting direct access to cash can help reduce the risk of problematic, uncontrolled spending. Other popular money management strategies for people recovering from a SUD include creating a budget, setting savings goals, using prepaid cards that introduce guardrails around spending, and seeking the support of trusted loved ones or advisors to help you safeguard your finances.
Money Management Tips for Addiction Recovery
Create a Budget
Creating a budget is an essential financial management strategy for people in recovery. It helps set boundaries and safeguard against unnecessary or unsafe spending. Start by calculating how much you plan to make each month. Then, determine how much you need to cover your monthly expenses (i.e., rent, groceries, transportation, etc.) and any repayment of debts. Once you've created a basic budget, consider sharing it with someone who can support you in executing your spending plan.
Set Attainable Financial Goals
When setting financial goals in recovery, it is important to start small. Start by setting financial goals that are attainable and don't trigger undue stress. Reference the budget you created. After you've covered your monthly expenses, what do you have leftover to put towards savings or paying off debts? Then, make a list of 3 – 5 financial goals with specific amounts and timelines to complete each goal. For example:
- Pay off $600 balance on Mastercard
> Monthly payments of $100/month for the next six months.
- Save $1000 for an emergency fund
> Set aside $200/month for the next five months
Use True Link's Spending Monitor to Set Custom Spending Rules
The True Link Visa® Prepaid Card can help you safeguard your finances and independence in recovery. With these prepaid cards, a family member supporting you can set custom spending rules, block high-risk stores (e.g., liquor stores), and stay informed with the platforms' spending monitoring system. This type of money management resource can help prevent setbacks and enhance your independence and autonomy while recovering from a SUD. Learn more about the True Link Visa Prepaid Card here.
Reach Out to Someone for Help
Financial management for addicts is a difficult task to do alone. If you’re struggling, reach out to someone who can help. In addition to leaning on family, friends, or counselors for support, consider seeking the advice of a trusted financial institution that specializes in supporting people in recovery with their financial independence. At True Link, we provide practical financial advice and support for people in recovery and the loved ones supporting them on their journey.
The True Link Visa Prepaid Card is issued by Sunrise Banks N.A., St. Paul, MN 55103, Member FDIC, pursuant to a license from Visa U.S.A. Inc. This card can be used everywhere Visa debit cards are accepted. Use of this card constitutes acceptance of the terms and conditions stated in the Cardholder Agreement.