Building a Financial Firewall Against Addiction

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Carol writes in:

My husband is a gambling addict. He also drinks excessively. The problem is that he takes money to feed both of these addictions right out of our checking account.

He’ll go for weeks and weeks without gambling or drinking, then he’ll have a rough day at work, call me on the cell phone to say he’s running late, then withdraws a bunch of cash from the checking account and goes out to a casino. He usually comes home having lost all of the money and incredibly drunk and he passes out in the living room.

I’m not going to leave him. Other than this, he’s a wonderful man who is incredibly kind to me and to our children.

What I’m trying to figure out is how to protect our finances against this kind of behavior. What steps can I take to ensure that these kinds of responses don’t damage our financial state? I’ve had checks bounce because of this behavior before and I don’t want to see that happen again.

Before I dig into the finances of this situation, I strongly encourage you to address this kind of behavior in a more direct fashion. Simply “walling off” the financial aspects of his behavior from your family’s finances is not addressing this problem in any real way, and it does nothing about the emotional and social impact it’s having on you and on your children. You need to seek further counseling on how to fix this problem because this is not a healthy pattern for your marriage or for his life.

However, I recognize that fixing this type of pattern is a long-term problem and simply directing someone to fix it does not help with the short-term impact of that problem. So, let’s look at that short-term impact.

The problem you’re facing is that at irregular intervals, a fairly large and unexpected amount of money is taken out of your checking account. The amount itself isn’t large enough to trigger an overdraft, but it is enough to sometimes cause checks to bounce.

How do we solve that problem?

My first suggestion would be to set up a protection account. By this, I mean that you set up a savings account, preferably at another bank, where you can transfer money electronically back and forth between the two accounts. I’d probably recommend ING Direct for this purpose.

Then, set up an automatic transfer that scoops out, say, $100 or so each pay period, shortly after the check hits your account. I’d recommend setting up that transfer through the second bank so that it’s not a part of online banking at your primary bank.

Then, whenever you see that your spouse has had one of his “benders,” just calmly go to your computer and transfer enough money back from this secondary account to cover what was withdrawn.

In essence, the second account is a special “emergency fund,” where the emergency is the very situation you describe in your email. Your second account is simply there to cover you when this happens.

A second approach you might want to consider is setting up a low ATM withdrawal limit for him. Most banks will allow you to set a very low daily ATM withdrawal limit if you so request it. Instead of the $500 per day that your limit might currently be, drop it down to $100 a day.

At the same time, you need to maintain physical control of the checkbook so that he can’t just go to a cash checking service.

What this method does is that it minimizes the amount of damage he can do when he does these things. If the ATM only gives him $100, then he can’t inflict too much damage on your checking account, after all.

A final approach, and this one depends on his attitude when sober, is to ask for his ATM card. There’s no reason he can’t have some pocket money, of course, but you’d be the one to give him some regularly. If he chooses to spend it on a night of carousing, that’s his choice.

Of course, this final option requires that he’s willing to talk about such things in a rational fashion when not under the influence or depressed. If you can’t have this type of discussion, you need to strongly consider marriage counseling.

Good luck!

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