4 Ways to Protect Yourself from Financial Abuse
Even if you are doing all you can to manage your money, we know there are some circumstances where your bank, job, or landlord may be taking advantage of you. These situations can be financial land mines, so it’s crucial to know your rights and get help if you need it.
Let’s take a look at some common abusive practices that can hinder your best efforts to achieve financial security.
1. Where You Bank
We don’t have to look very far to see abusive practices in our financial systems. Payday lenders, for example, charge outrageous interest rates that create cycles of financial destruction. These practices are unfortunately quite common, but we only hear about the abusive practices of more mainstream financial institutions when there is a big incident affecting lots of people.
The Consumer Financial Protection Bureau (CFPB) has an extensive database of complaints that you can check. While not all banking practices are abusive, it’s worth your attention to make sure you aren’t inadvertently giving away your hard-earned money. Check out the CFPB website to learn what to do if you have common issues like unauthorized transactions or hidden fees.
2. Where You Work
The “gig” economy provides lots of opportunities to bridge financial gaps and generate income to meet basic financial needs. Unfortunately, this way of working has a downside if you’re working with or for an employer that treats you like a consultant to avoid paying taxes or benefits. There aren’t hard and fast rules and each situation is different, but generally, if your boss can decide when, where, and how you work, you are an employee. Being a consultant has some benefits and you can start here to learn more about the difference between being an employee or a contractor, and what to do if you are misclassified.
You can also get info on how to manage your taxes as a contractor at the Self-Employed Tax Center, so you can include payments to your uncle (Sam) in your pricing and budgeting.
3. Where You Live
Evictions, lock outs, and disagreements over security deposits are some of the most common disputes between tenants and landlords. Fortunately, if you’re renting, you can get support from local and federal government agencies. The first thing you’ll notice when you check out the tenant’s rights page at the Housing and Urban Development (HUD) webpage is that each state has its own rules, so start at the source and be sure to get information from reputable organizations like HUD Housing Counseling in your area. The website also has resources for legal support, housing advocates, and rent stabilization boards or councils.
4. Recognizing Financial Abuse
Financial abuse can take many forms (domestic/partner, senior) and the first step to address the situation to recognize is to write down what you are experiencing (don’t worry about trying to figure out the solution), identify a trusted resource to help you look at it objectively, and then decide on the best course of action to protect yourself.
Saundra Davis is a nationally recognized financial coach and educator. Her experience in the U.S. Navy, where she made every money mistake possible, and her 20 years serving community-based organizations led her to the reality that the best way to help people find a path out of poverty is to help them become their own financial expert.