It may not be a surprise that the effects of alcohol stretch beyond mental health—alcohol can also impact relationships, your physical health, and even your sense of security, like if your job is at risk.
But what about the lesser-known effects? For many people in recovery from substance use issues, an unhealthy relationship with alcohol can also impact financial health.
Just like alcohol use disorder itself, the financial implications of addiction can exist on a spectrum, varying from simply having less disposable income to losing everything, being unable to afford treatment, and even filing for bankruptcy and experiencing homelessness.
We hope to uncover why debt and addiction co-exist, and also provide some resources to empower yourself to find financial independence in your recovery.
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The Relationship Between Money and Addiction
“Addiction and financial mismanagement frequently co-occur,” says licensed professional clinical counselor Lynn Matti. In her practice, Matti often discusses the intersection between the behaviors associated with addiction and those in relation to money, such as impulsivity and compulsivity.
“Impulsivity is associated with harmful behaviors, including substance abuse and financial mismanagement,” says Matti. She continues, “Both impulsivity and compulsivity play a role in the development and perpetuation of addiction, though impulsivity is more influential in the early stages of abuse/addiction (mild to low-moderate substance use disorders), and then later stages (high-moderate and severe SUDs) are characterized more by a combination of compulsive and impulsive acts.”
Matti says that addiction and financial mismanagement frequently interact in a negative but also in a positive way. For example, she pointed to a 2012 study, published in the American Journal of Alcohol Abuse, showing the impacts of substance use disorder on money management and debt.
“People with substance dependence have approximately twice the likelihood of carrying debt as compared to those without substance dependence, although they may not have less income,” according to the article (note: this article published before the adoption of the spectrum of substance use disorders was adopted).
Matti also highlights a study showing that money management interventions can improve a person’s financial decisions—and positively affect their substance use outcomes.
Stories of the Impact of Addiction and Money
It’s worth noting that recovery doesn’t necessarily mean a better relationship with money. As the above study shows, just like addiction, interventions are usually required to help someone in recovery manage their finances. Psychotherapist, licensed social worker, and author Ann Dowsett Johnston likens the process of recovery to a game of Whac-A-Mole.
“When we remove one substance, it is likely that another will rear its thorny head,” she says.
Reflecting on her own journey, Johnston explains that putting down the alcohol led to checking out by shopping (something that is commonly called a cross addiction). “When I got sober, money ended up being a problem—or more specifically, clothes shopping. It took some time and effort for me to understand that I was numbing with shopping as I had with alcohol.”
Kristina Canfield M.Ed., substance abuse prevention and recovery coordinator at The University of Alabama at Birmingham (UAB), shared that she too struggled with debt in recovery. “My personal experience was that I entered into recovery in a very large amount of debt. I owed well over $20,000 in restitution and court costs/fees, thousands in credit card debt, and an ever-growing amount of student loan debt.” Thinking about the reasons she struggled with money, Canfield says that she wasn’t taught how to manage money, and that in active addiction it wasn’t really a priority.
In her professional capacity at UAB, Canfield says the most damaging area for people in recovery is debt. “I have seen many folks enter into recovery with what feels like insurmountable amounts of debt,” she says. Those could be student loans, tax/IRS debt, credit cards, court fees, and/or restitution.
Financial Health in Recovery
Recovery provides us with the opportunity for growth in all areas of life, including our finances, but also our self-worth. Some people say that recovery gave them a new relationship with money, others paid off $30,000 in debt, and some reflect on ways to save (or spend) the money they are no longer spending on booze.
One thing is certain: it is a process, and that process—just like recovery—takes time.
For Canfield, it took many years to improve her financial health. “I have been working on my credit score for the last 10 years and just now coming out of the financial wreckage of my active use and the damage I did in early recovery as well,” she says.
Perhaps a reason why many of us struggle with money is that we simply don’t have the knowledge or skills to manage it. This was the case for Canfield. “Even in early recovery, I just lacked the skill set to manage my finances and would buy things that were completely unnecessary,” she says. “Sometimes it was just to feel good about myself and sometimes it was to get back some of those things I lost. For example, my first purchase with one of my first paychecks once I got into recovery was a PlayStation 2. There I was with tens of thousands of dollars in debt, but I bought a gaming console because I had stolen and pawned so many in active addiction. Looking back, I can see how that probably wasn’t the best decision. I just didn’t have a very healthy relationship with money.”
However, just because we don’t necessarily have the skills doesn’t mean we can’t gain them.
Resources to Improve Your Relationship with Money
There is a range of strategies people in recovery can use to tackle their relationship with money.
Licensed social worker and author Jennifer Matesa recommends starting with similar values as those we use to approach recovery. “Perhaps the most important thing is to establish an honest and open relationship with money, to repair one’s relationship with money, as you might repair any relationship that has become damaged because of neglect during AUD,” she says.
Matesa recommends using a tool as simple as your phone. “There are apps that track how much money you’ve saved since your sobriety date,” she says. You simply have to enter how much money you spent per unit of time. It is quite an insightful tool that is often discussed by people in recovery on social media. Apps like Nomo track recovery and how much you save by not supporting your alcohol habit.
Canfield advises that the first step is asking for help. Financial advising or counseling can be helpful. “We just don’t have to do it all alone,” she says. “I was really ashamed in the beginning and scared to be honest with anyone, even a professional who could help, about just how bad it was. But having someone help me plan and tackle the debt bit by bit was extremely helpful. On my own, it felt like this huge mountain I would never be able to climb. I also needed someone to help me through the legal pieces.”
Another important skill in this financial journey is prioritizing our health. Lydia Milburn DNP, PMHNP, CARN-AP, and medical director of substance use disorder services at Central City Concern, explains, “We often think we aren’t worthy of having money, or that if we do have, we might spend it on substances.”
Part of Milburn’s work is working with clients on regaining dignity in relation to money. “This often comes up when clients can’t afford copays for necessary medications in early recovery.” Milburn explains some of the breakthroughs her clients achieve. “We spend a lot of time reviewing that it is okay to access money in a way that is congruent with your values and that you deserve to pay for necessities, especially medications that save your life.”
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Whether you are new to recovery, or a few years in, there is no right time to tackle your relationship with money. Just like the process of recovery, it begins with awareness. Once that awareness grows, you can begin to learn new skills or try new techniques for managing your money more effectively. What’s key is that you start with curiosity, rather than judgment, and you give yourself the time you need to grow into healthy new habits.