financial dependency

The Characteristics of Financial Dependency

In our book Facilitating Financial Health, co-authors Ted Klontz, Brad Klontz, and I write about disordered financial behaviors and problematic financial behaviors. Some of the disordered behaviors have some roots in the DSM-V, the mental health diagnostic manual. Others are behaviors that cause someone a lot of financial trouble even though they are not labeled as disordered. 

What I have learned in working with mental health professionals is that diagnosing someone as having a certain disorder is really embedded in the medical model of mental health, in which a diagnosis is often needed for prescribing medications, authorizing treatment, and obtaining insurance reimbursement.

I want to be clear that identifying a problematic behavior or diagnosing it as a disorder does not equate to a person having a mental disability. The worldview I come from, the Internal Family Systems approach, is that “there are no bad parts.” I see disordered behaviors as coping mechanisms meant to take care of vulnerable inner parts that have been traumatized and forced into roles. A person is not defined by or seen as their disorder.

My suggestion is to keep that perspective in mind as I discuss some specific types of disordered financial behaviors. The one for this week is financial dependency. This includes reliance on others for non-work income in a way that creates fear or anxiety (such as fear of being cut off) and brings on feelings of anger or resentment related to that income. We have found that financial dependency really stifles a person’s motivation, passion, and drive to succeed. It is not conducive to financial wellbeing.

Let me emphasize that the desire to be loved, nurtured, and taken care of is not the same as dependence. We all need to be taken care of as children, and we all need and want to be cared for at times as adults. We want to be noticed, to be valued, to be supported. The give and take of caring for each other is part of being in a coupleship or other close relationship. This does not mean that we want to be dependent upon someone for everything, including our finances.

Financial dependency is close to what the DSM-V describes as dependent personality disorder. The manual lists eight characteristics and behaviors that are warning flags for this disorder. For each one, I’ve added language in parentheses specifically focused on financial dependency.

  1. Has difficulty making everyday decisions (financial decisions) without an excessive amount of advice and reassurance from others.
  2. Needs others to assume responsibility for most of major areas (finances, including investing, major purchases, etc.) of his or her life.
  3. Has difficulty expressing disagreement with others because of fear of loss of support (especially financial support) or approval.
  4. Has difficulty initiating projects (including investing, business innovations, and other financial decisions) or doing things on his or her own.
  5. Goes to excessive lengths to obtain nurturing and support from others (including financial support).
  6. Feels uncomfortable or helpless when alone because of exaggerated fears of being unable to care for him or herself (by earning or managing money).
  7. Urgently seeks another relationship as a source of care and support (including financial support) when a close relationship ends.
  8. Is unrealistically preoccupied with fears of being left to take care of him or herself (financially).

According to the DSM-V, if an individual has five of those eight criteria, they’re diagnosed to have dependent personality disorder.

Some examples of financial dependency include:

  • Parents who provide financial support to adult children who are out of school. Of course, not every case is enabling. There is a difference between providing short-term help during a time of financial need and chronic enabling which goes on and on to the point of being harmful.
  • Generational wealth can create financial dependency for descendants of the wealth builders, who are sometimes labeled with the demeaning term “trust fund babies.” This dependency can really harm their development, motivation, and sense of self-esteem.
  • People can become financially dependent on government funding or family support through chronic illnesses or disabilities.
  • In abusive spousal relationships, financial dependency can be used as a means of control.

An additional component of financial dependency, as I described above, is resentment and anger. This can be directed toward the financial enabler who provides the money, toward the circumstances that create the dependency, or toward oneself for being dependent. Addressing these emotions, perhaps with the help of a financial therapist, is essential to recovery from financial dependency.

Check out The Financial Therapy Podcast by Rick Kahler concerning this topic.

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