The High Financial Cost Of Addiction & Recovery

By Kelly Burch 01/07/19

A new survey highlights the financial hardships that people with addiction face.

man who is bankrupt because of addiction and recovery costs

Addiction and recovery come with huge emotional costs, for the person with substance use disorder and for their family members. Yet, there is also a very real financial cost to both active addiction and recovery — one that can affect family members and people with substance use disorder in the short and long term.

According to a recent survey by True Link Financial, 82% of family members said their loved one’s finances have been affected by their addiction. People who are addicted need a constant stream of cash to fund their drug purchases.

Survey respondents also said their loved ones had made irresponsible financial decisions to fund their addiction: 48% said their family member had used savings or retirement money to purchase drugs; 42% had family members who sold assets to fund their addiction; and 11% had family members who had declared bankruptcy in part because of their addiction.

However, the challenge doesn’t stop when people get sober.

“Treatment is extraordinarily expensive, and it often takes a couple of tries,” Kai Stinchcombe, True Link’s co-founder and CEO, told Forbes.

Eighty percent of respondents said that getting on track financially is one of the biggest challenges of recovery for their family members.

“Being able to make typical day-to-day purchases, like putting gas in your car to get to work, or taking a new friend out for coffee, is critical,” Stinchcombe said. “Having no safe, dignified way to pay for basic items makes it harder to build yourself a new life. Recovery is not just tough physically, mentally, and spiritually. There are financial barriers in place that make it harder to build yourself a new life.”

True Link is known for making debit cards that have limitations, like only working at certain locations, helping family members guide purchases for adults. Although it’s usually used for adults with disabilities, Stinchcombe said that the cards can be a tool for people in recovery.

Eric Dresdale, who is in recovery, said he was used to borrowing money when he was addicted, but when he got sober and had access to more money, he began spending recklessly.

“I realized I could take out money and in about a week I spent $500 on silly things to fill an emotional void,” he said, adding that he was about $7,000 in debt by the time he left a half-way house program. After regaining control of his own finances, Dresdale went on to help develop a prepaid debit card for people with substance use disorder and mental illnesses. He says that cards like this can help family members provide support, without enabling.

“I’ve worked with families and there’s a fine line between helping and hurting,” he said. “You might think you are saving or protecting someone by giving financial support, but you could be making the problem worse. I believe in providing financial help with boundaries.”

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Kelly Burch writes about addiction and mental health issues, particularly as they affect families. Follow her on TwitterFacebook, and LinkedIn.