In light of the ongoing 16 Days of Activism, a time dedicated to raising awareness about gender-based violence (GBV), Senior Legal Adviser at Momentum, Sharon Hamman, urges South Africans to consider the role financial awareness and working towards financial independence can have in protecting them against financial abuse.
Financial abuse is a form of abuse where one party in a relationship manipulates and gains control over the other by limiting their access to financial resources. Even though it rarely leaves physical evidence of abuse, it takes away a person’s dignity, choice, and control over their own destiny, leaving them powerless.
“Too often, GBV is linked to finances,” says Hamman. “Today’s economy is stressful, and many people are financially isolated by their partners. Financial awareness is the first step to protect oneself against financial abuse.”
Financial awareness will enable early identification of financial abuse in a relationship when it is most likely easier to deal with. Be aware of how financial decisions are made in the relationship, how and by whom expenses are managed, whether each person retains control over their own financial decision and planning, etc.
Recent findings from the Human Sciences Research Council’s (HSRC) First South African National Gender-Based Violence Study, highlight a disturbing correlation between financial dependence and heightened vulnerability to abuse.
According to statistics from Stats SA, a growing number of women rely on grants and the income of their partners, making them more susceptible to financial abuse. Other statistics suggest that 60% of divorces in South Africa result from financial issues.
Hamman says: “Financial stress can strain any relationship and may lead to various forms of GBV, including financial abuse. Making the decision to work towards financial independence early in life is vital. Starting to save, no matter how little, from the first pay cheque is a positive step towards future financial independence. Forming positive money habits early in life, paying yourself before anyone else, and building that nest egg – one Rand at a time – will enhance personal financial self-confidence, provide security, and peace of mind, and reduce vulnerability to any form of abuse.
"If you find yourself in a financially abusive relationship and your partner is unwilling to seek financial and emotional counselling and support, it is important to consider your future. Remaining in an abusive relationship limits future financial freedom and choice. The longer one remains, the more difficult it will become to leave.
Every action starts with a plan, and making the plan in itself is empowering. Prevention is by far the easier option. If you want to protect yourself from financial abusive relationships, Hamman shares some tips on finding financial independence:
Start saving, even small amounts: As alluded to above, even small contributions to a savings account can grow into a significant financial cushion. Small amounts of money correctly invested over time will benefit from compound interest.
Build your nest egg/emergency fund over time: Start small but remain consistent. Gradually building your savings will empower you to make decisions that are best for your well-being.
Maintain a healthy credit score: If you need emergency access to funds, a healthy credit score may assist you to gain access to short or medium-term credit.
Financial independence from your partner: Even if you are not in a financially abusive relationship, having your own income and/or savings is a vital first step towards independence.
Seek advice from someone who understands your circumstances: A trusted individual, like a financial adviser who understands your unique circumstances and can help you with a financial plan to achieve financial independence as defined in your circumstances.
Acknowledge the real impact of financial stress: Financial stress affects all parties and can cause stress in a relationship, resulting in abuse, including financial abuse. Recognising this can help one develop strategies to mitigate its effects.
“When faced with taking proactive preventative steps or reactive corrective action, a financial adviser can provide much-needed guidance when taking the first steps towards financial awareness and independence. They can act as a mentor, guiding you while laying the foundation for financial freedom.” Hamman concludes.
PERSONAL FINANCE