Being financially self-sufficient is one of the most important tools you can give yourself to succeed in life. It can be extremely easy to fall into a dynamic where one person ultimately becomes dependent on another, however this dynamic will almost always become untenable and counterproductive to your own financial independence.
Before you can be financially independent, you need to be self-sufficient, meaning you’re earning an income, and you’re paying the bills to make ends meet. Having the resources to take care of yourself is important if you want to continue to build towards your goals, aspirations, and future.
But what happens when we fall into the trap of becoming financially dependent?
In her moving TED Talk, Estelle Gibson discusses how people fall into two categories: financially dependent by choice and financially dependent without a choice. Someone is dependent by choice when they hand over their financial power and their participation. This applies especially to elderly folk, who will assign Power of Attorney to their children for financial affairs and decisions. However, the flip side of this is financially dependent without a choice. While on the surface this may seem non-threatening, financial dependence is actually a form of financial disorder, and as Gibson asserts in her TED Talk, can manifest in subversive ways. This disorder occurs for all kinds of people from different socio-economic backgrounds, such as wealthy generational recipients or heirs, people in unsustainable romantic relationships, the elderly, stay-at-home caregivers, and others.
Financial dependence is a problem anytime it creates a power dynamic where the provider abuses, or attempts to abuse, this power. However, where the relationship between the two parties is healthy, this is not as much of a concern. Outdated gender roles and stereotypes play a part in financial dependence. Women are the most likely to fall victim to this phenomenon, as they are often forced into a position of choosing between their career or their family obligations, therefore directly placing them in a position of financial dependence. Women who are financially dependent in abusive relationships often feel it’s impossible to leave, creating a dangerous, vicious cycle–and studies have shown that almost half of domestic violence victims will return to live with their abusers due to lack of income.
The elderly are also susceptible to financial abuse, influence, and pressure. As a vulnerable population, the elderly are often bullied into signing over power of attorney or control of their assets, such as their home or will, otherwise they will face having their savings depleted without their knowledge by a family member.
Moving out of financial dependence requires some initial difficult work; however, in the long term, you will feel more confident, secure, and empowered. By first addressing the issues which led to this initial dependence, or referring this article to someone you know is struggling with this, you can work to begin to untangle these tendencies, and build healthier financial literacy for yourself.
Review your finances and begin by finding ways to manage them. This can include simply reviewing bank statements, credit card bills, or getting more involved in budgeting. Expanding your financial literacy can be easy and freeing.
Seek support to learn and establish healthy money habits. There are so many online resources to get you started! If you’re not sure where to begin, Grow Your Wealth can assist. We will listen to your concerns and create an actionable financial plan to transform your future, beginning today. In Gibson’s own words, when you share your story, you empower others for success, and this is our mission. We offer many financial planning services to get you started on the path to personal success!