Addiction is a nasty disease that impacts millions of individuals and their families. And while the ill-effects are widespread, there’s one set of consequences that don’t get nearly the discussion that they should: finances.
The Financial Cost of Addiction and Abuse
According to a recent study from financial services firm True Link, 82 percent of friends and family members of people with substance abuse disorder say their loved one experiences adverse financial consequences due to their dependence on drugs and alcohol.
More specifically, 65 percent say the person has borrowed money and/or asked for money. Nearly half (48 percent) say their loved one has depleted all of their savings, while 11 percent have witnessed a filing for bankruptcy.
While it’s expensive to be in the throes of addiction (easily costing $10,000 per year to sustain a cocaine or heroin addiction), the financial struggles don’t stop when a person pursues recovery. Not only can rehab facilities be costly, but it’s tough to manage money when coming out of such a dark place.
Eric Dresdale, 35, is a great example. He was addicted to painkillers after being diagnosed with psoriatic arthritis. As a result, he experienced depression and anxiety, which eventually led him to borrowing money from his family, lying to them, and digging a deep hole of addiction and financial trouble. He got clean for a couple of months before totally depleting his bank account once again.
After going through an impressive four-month stint at a facility in Florida, Dresdale once again had a financial “relapse.”
“I realized I could take out money and in about a week I spent $500 on silly things to fill an emotional void,” he recalls.
After going into a recovery residence, Dresdale very quickly racked up $7,000 in debt. And while he was thankfully able to turn his life around and get his finances back on track (along with his substance abuse problems), his story is a familiar one for many.
The Financial Challenges for Parents and Loved Ones
While there are so many ways to help a child or loved one who struggles with addiction – including general outpatient programs – there has to be some desire for the individual to get better. Until then, the issues just get worse. And, unfortunately, many parents unintentionally aid and abet their child’s struggles.
There’s a very fine line between helping and hurting someone with support. Many parents think they’re helping their child pay for groceries or rent, while it’s actually going to fund drug or alcohol addiction. If there’s going to be financial support involved, there must be strong guardrails and oversight in place.
Dresdale actually went on to help create a prepaid debit card that has spending parameters on it specifically for people who suffer from substance abuse and other mental health issues. The purpose is to limit how money can be spent, while also providing some accountability.
But erratic spending is only part of the financial problem. Parents often get dragged into expensive legal battles as well. Between attorney fees, court costs, and the opportunity cost of attending legal proceedings, it can all get expensive fast. And for a family that’s already struggling to get by, this financial burden can initiate a negative cycle that makes it hard to escape. In extreme cases, it can actually deepen addiction and lead other family members into the very downward spiral that they once vowed to prevent.
Getting to the Root of the Issue
Once addiction progresses to the point that it’s causing financial consequences like debt, bankruptcy, and dwindling credit scores, it’s challenging to get out of the cycle. It’s not impossible, though. The key is to dig down to the root of the issue and address the problem at the core.
It’s not a matter of developing a budget or having someone oversee your spending. While these might be good things, they’re impractical over the long term. An addict can’t live their entire life like this and be expected to succeed.
The real issue – the addiction – must be addressed by licensed professionals. And once it’s dealt with, financial education and recovery can ensue. Any other approach is destined to unravel prematurely.