Introduction to Financial Wellness in Addiction Recovery

Introduction to Financial Wellness in Addiction Recovery

Financial issues can go hand in hand with addiction. The inability to hold down a job, or the overspending on substances like alcohol, can lead to debt that feels impossible to find your way out of. And if not debt, your credit may also be shot from losing a home, being unable to pay bills, and so forth. Taking control of your finances can be cathartic for those who have come from such chaos, so to start, you need to understand the challenges involved and how to overcome them easily. No matter your financial situation, there is always a way out of the other side as long as you take the time to work toward it. 

If you need a safe space to stay sober, our sober living environment at The Sanctuary Recovery Foundation may be right for you. Contact us and learn how we can help.

Understanding the Impact of Addiction on Finances

Addiction is expensive; the cost of substances, missing work, and extra charges when you can’t keep up with bills all add up. But it doesn’t stop once you have overcome your addiction because, at that point, you’re looking at healthcare costs, treatment costs, and probably a lot of debt either with family and friends or companies. If you find yourself in a dire financial situation, it isn’t your fault. This is the product of addiction, and just like working toward sobriety, you can move toward a stable financial place. 

5 Strategies for Financial Recovery

Budgeting and Money Management

First, you need to know how much you are bringing in and what your spending looks like against it. You can pull up a spreadsheet, a document, a piece of paper, or an app for this. The idea is to write down all of your spending in a month and see where this leaves you. Sometimes, you might find if you cut a certain thing out, like eating out, you will be more financially stable. Or you may discover you have an income problem, where your basic costs of living are more than what you make. 

It’s important to know which issue applies to you so you can take the right steps, such as finding another job or a second job or cutting back on costs in certain areas of your life so you can live more comfortably in other areas. 

Debt Management and Credit Repair

You’ll need a copy of your credit report and any credit cards or money that you owe to truly see the whole picture. Get all of this together so you understand where you’re starting from. Remember not to blame yourself, and try not to become overwhelmed. This is the first day toward a better life, and all of this will be behind you soon. Once you know what you’re working with, there are lots of debt management plans out there for paying off debt, like the snowball effect, putting your money into envelopes and paying off large sums at once, etc. 

Be careful if you choose to consolidate or take out a personal loan to pay it all off and only have one monthly payment; you really want to pay attention to the interest rate and small print. Companies will take advantage of you and put you in a situation where the debt is basically impossible to pay off unless you can do it all at once. 

If you find out your credit score is low, there are lots of tactics for getting it higher. First, it’s important to know that there are three main credit reporting agencies, and your score may be lower on one than another: Equifax, Experian, and TransUnion. Paying off your debts will start to boost your credit scores on all three, as will continuing to pay your bills on time. But there are some websites that can crawl through your accounts and report things like on-time payments that the credit bureaus might not be aware of, too. Remember, don’t close your credit cards once you have paid them off, as the older they are, the better your credit score. Instead, destroy the card. 

Building a Healthy Relationship with Money

Spending habits can actually cause relapse. You will need to recognize where this is an issue for you and work through it in therapy. Money and spending are intrinsically tied to our mental state, so you’ll find the stronger you become mentally, the better your financial situation will be. 

Financial Planning for the Future

Once you have everything set up, all your bills are being paid, and you are slowly chipping away at your debt, it’s time to consider an emergency fund. The general rule of thumb for this is to start with $1000 in your bank account. The next step will be three months’ worth of bill money in case you lose your job. The idea is to take it one step at a time. Also, use a high-yield account for those savings so it grows to mitigate some inflation. 

Sanctuary Foundation: Empowering Your Recovery 

Being financially secure is challenging and takes a lot of planning and sacrifice, but the end result is always rewarding. Once you understand finance and how your addiction can cause it to become unbalanced, you’re one step closer to having a life of freedom from addiction and stress. Seeking support in places like sober living so it’s harder to relapse is just one step you can take. Find out how we can support you in that step by contacting us today