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Financial Issues, Part I: Behavioral Health Disorders

Financial Issues, Part I: Behavioral Health Disorders

Financial or money problems are common among clients with behavioral health (BH) disorders. These can affect physical or mental health, relationships, lifestyle, recovery, and quality of life of individual with these disorders. Money problems also affect families or significant others. The following examples show variations of financial problems and their impact.


  • Bill, an ex-millionaire, lost his home, business, and other assets due to his addiction to cocaine and gambling. He was flat broke and in debt when he entered rehab. Once a wealthy businessman who was miserable as his addictions controlled his life, after getting and sustaining his recovery, Bill became a modestly paid nursing assistant while working on a social work degree. When he received his degree Bill worked as a therapist in an addiction program. He said that he was much happier helping others, making much less money, and living in a small apartment than he was as a wealthy businessman with expensive tastes.  


  • Bethany, a married woman with bipolar illness and addiction, stopped her medication and then relapsed to drug use. During a recent manic episode she went on a shopping spree, spending tens of thousands of dollars on clothes and jewelry that she did not need, causing serious financial problems for her family, and conflict with her husband.  


  • Diane, a single parent, spent an inordinate amount of money to pay legal costs for her son in an attempt to get his vehicular homicide charge dropped or reduced. He was driving while drunk, leading to an accident that caused a death of the driver of the car he hit. Despite the money Diane spent trying to get her son out of legal problems, he was charged with vehicular homicide and went to prison.


  • Rich died unexpectedly. However, he failed to update his beneficiaries on his retirement accounts and life insurance policy after breaking up with his partner. As a result, this money went to his ex-partner and not his family, even though his family paid for the funeral expenses.


There are many other financial problems caused or worsened by the way a person manages finances. These may result from symptoms or behaviors associated with a BH disorder such as impulsiveness or poor judgment. Or, these may result from poor decision making, failure to pay attention to financial issues or follow a budget or plan, losing jobs or working low paying jobs, or spending too much money on substances. The effects of poor money management vary among clients. Some problems are minor and are easily fixed, while others are significant and can create havoc on a person’s life or a family who depends on this person.


This is the first of two articles on financial problems that affect individuals in recovery as well as their families. This one reviews common financial problems found among clients with BH disorders, and some of the causes and effects of these money problems. 


Personal Disclosure


These articles are not intended to offer financial advice like one would get from a certified financial advisor or planner. My intent is to identify financial behaviors and problems common among clients with BH disorders, and provide strategies to address these in recovery. I also do not address the issue of poverty, which affects many individuals with BH disorders and their families.


I grew up in a poor family and know what it is like to depend on welfare, live day-to-day, live in funky houses and neighborhoods, have no car or phone, be broke, and have no concept of the future as it relates to money. As a young man, I had “financial ignorance,” which created many problems. I accumulated too many bills, paid too much in credit card interest, saved very little, and had no concept of investing for retirement in the future. In the early years of marriage, my wife and I bought furniture, clothing, and other items with credit cards or loans, often going deeper in debt that we should have. We repeated our mistakes and consolidated our bills four times because we did not stick to our financial plan and let things get out of hand. Fortunately, over time I overcame my financial ignorance, changed my bad financial habits, and became more responsible in how I managed money.
Money and Recovery from Behavioral Health Disorders


SAMHSA delineates four dimensions of recovery from BH disorders related to health, home, purpose, and community (2012). The health dimension involves abstinence from addictive substances for those with a substance use disorder (SUD) and making good decisions to support physical and emotional health for anyone with a BH disorder. A stable and safe place to live comprises the home dimension. The purpose dimension involves engaging in meaningful activities and having sufficient resources (including financial) to participate in society. The community dimension involves having personal relationships and social networks that provide support, friendship, love, and hope. However, it is more than having resources; it is managing these resources that impact on a person’s quality of life. Others who write about recovery state that there are multiple domains, many of which overlap with SAMHSA’s working definition of recovery. These include physical, psychological/emotional, social, family, financial, spiritual, and lifestyle domains.  


Common Money Problems and Effects


Although financial problems are often caused or worsened by substance use or psychiatric disorders, these are often overlooked by professionals and individuals in treatment even though they create stress and frustration, and affect the quality of life for these individuals and their families. In close relationships, money, spending habits, and financial planning are common sources of conflict and disagreement.


I have worked with wealthy (including millionaires), middle class, and poor or broke clients. Below are financial problems that I have observed among a range of BH clients. Even individuals with adequate financial resources can have problems as a result of how they mismanage money.  


  • No income, loss of income or inadequate income 
  • Lack of a financial plan 
  • Lack of financial discipline 
  • Impulsive spending
  • Poor use of credit cards
  • Poor credit score
  • Too many and/or high interest loans
  • Pay too much for living expenses
  • Spend too much money on tobacco 
  • Make a large purchase that shouldn’t be made
  • Not paying debts
  • Drug debt
  • Not saving or investing for the future
  • Lack of, or poor use of, retirement account
  • Rely on others for financial help
  • Lack of willingness to sacrifice
  • Money as a trigger to use drugs or alcohol
  • Failure to keep beneficiaries current 
  • The individual does not set money aside for taxes or retirement or does not pay taxes (lies on the tax returns).
  • Couples do not work as a team to set financial goals, or deceive each other and hide bills, lie about them or spend money secretly.
  • Parents or families feel financially stretched because they continue to support adult children, their grandkids, or both


If clients have no money or current source of income, or depend on others for support, the first step is to put together a plan to get a legitimate source of income. Some may need public assistance until they are back on their feet, have a job, find legitimate ways to make money or apply for disability if there is a real need.  


Clients who have jobs that do not pay enough may need to look for a better paying job or find other ways to earn money such as part-time work or selling items on the Internet. Or, clients can consider going back to school or training to prepare for a career or better paying job. 


In the next article, I will discuss strategies to address money issues for individuals in recovery. These relate to a person’s attitudes and beliefs, and behaviors such as spending, budgeting, setting goals, living within one’s means, reducing bad debt, cutting down on expenses, and planning for the future.




  • Some clients are broke, and others have no income. These individuals have to first get a source of income before they can consider managing their money more effectively.
  • While many think of recovery as encompassing many domains—emotional, cognitive, spiritual, social, and others—little attention is paid to financial behaviors or related recovery issues. Conferences, workshops, treatment literature, and recovery literature appear to pay little attention to financial matters among individuals with BH disorders.
  • Financial problems are not unique to clients as many of us professionals and our families also struggle with these.


Questions to Consider


  • What kind of discussions do you have, if any, with clients about their financial condition and how they manage (or mismanage) money?
  • Are you familiar with resources that may help clients who have financial problems that may impact on their recovery or the quality of their lives?
  • Do you need to take a look at your own financial behaviors? Or, do you need to make some changes in how you manage your financial resources?


Substance Abuse and Mental Health Services Administration (SAMHSA). (2012). SAMHSA’s working definition of recovery. Retrieved from https://store.samhsa.gov/shin/content/PEP12-RECDEF/PEP12-RECDEF.pdf