The economic impact of substance addiction affects many aspects of an addicted person’s life. However, when a person enters substance addiction treatment, they have the opportunity to begin again, emotionally and financially.
The Impact of Substance Use Disorder
A person with a substance use disorder (SUD) bears the brunt of their financial problems. However, the cost of addiction impacts society, family, friends, and the workplace. According to the University of Pennsylvania Health System, the economic impact on society is:
- Substance use is involved in 52 percent of traffic fatalities
- Vehicle insurance premiums go up after a DUI or substance-related traffic incident
- Each year businesses lose approximately $93 billion due to decreased productivity, healthcare costs, or a combination of substance abuse-related events.
A person with SUD may experience a rise in healthcare costs, spend excessive amounts of money per month on substances, or lose their job. As a result, savings accounts are often drained.
Financial insecurity is a part of substance use, but it doesn’t need to fuel insecurity, anxiety, or depression during treatment and recovery; there are ways to build a stable financial future.
The Effect of Financial Instability
Financial instability is a source of stress. According to a survey conducted by the American Psychological Association, 72 percent of those surveyed said they felt stress about their finances. Stress, when left untreated, presents in several ways, including:
- Social withdrawal
- Drug or alcohol abuse
Stress management is one way to help build financial stability. Your client can decrease stress with holistic therapies like yoga, a sport, hobbies, or time spent with loved ones. Once they recognize the signs of stress and how to implement coping skills to address stress, they can begin to work on the steps to financial stability.
The Steps to Financial Stability
Financial stability can include a regular income, debt control, savings, health and life insurance, or a wealth management portfolio. When your client can weather financial setbacks, they are financially stable. They can achieve this goal if they learn to follow a few steps.
Decide on a Financial Plan
A financial plan is not a budget. Create a map that can guide your client to their financial goals. The way to do this is to look at where they are and decide where they want to be in the future. Once they envision their financial future, you can help them create short-term and long-term goals to assist them.
Of course, you and your client can revisit the goals when necessary and make changes, life isn’t a straight path, and neither is financial planning. Your client’s financial plan is the essential step in achieving financial stability. You can emphasize the importance of assessing their:
- Savings — Your client should review how much of their paycheck they place into a savings account each month
- Salary — What is your client’s earning potential? What are they making? Their salary dictates how they save, invest, and spend. Also, by taking a closer look at their current salary, the average income for their profession, and their potential, they may find they deserve a raise
- Debt — A person’s debt affects their mental and financial health. If your client is carrying too much debt, their financial plan will need to accommodate the debt burden
- Spending — Ask your client to take an unbiased look at their spending. Often, people don’t realize how much they spend, where they spend, and what they can cut back on or cut out of their spending
- Risk — The financial definition of risk means the degree of uncertainty or potential for financial loss in their savings or stock portfolio
Build a Budget
A budget is a cornerstone to financial stability. How a client spends their money affects their ability to achieve their financial goals or independence. Ways to create a budget are:
- Add up their income. Have your client include any form of payments received, whether it’s rent on a property, part-time jobs, a full-time job, money from a side hustle, or investments; it doesn’t matter.
- Look at their expenses. Have them categorize their expenses into needs and wants.
- Assess what, if any, money is leftover at the end of the month. If your client finds they are spending too much, figure out where they can reduce their spending.
The steps you took with your client in building a budget are carried over into their spending habits. When they evaluate what they can eliminate from spending each month, your client can decide where they will put that money instead. Your client can put their money into an emergency spending plan, use it to pay off debts, put it into a savings or other type of account. Money saved is money earned.
Don’t Spend What Isn’t There
Ditch the credit cards. When your client wants to splurge on a want, ask them to use cash or their debit card; if they don’t have enough money in their wallet or account, they shouldn’t buy the item. By limiting spending to what is available, your client will avoid the debt cycle.
Plan For Retirement
When you and your client set up a stable financial plan, they can start working towards a comfortable retirement. First, ask your client when they want to retire and how they want to live when they are retired. Then, show them the expected cost of living when they retire and use their financial plan to reach their retirement goals.
Substance addiction takes a financial toll on society, loved ones, and businesses, but it also affects an individual’s finances. Guiding your client to financial stability is another way to help them build a future. A comprehensive treatment plan, including a financial stability plan, gives your client a chance to take responsibility for their economic well-being.
Those with a SUD face many obstacles in their effort to become sober. Substance addiction treatment that includes ways to become financially stable can decrease the risk of relapse. By discussing, analyzing, and recognizing weaknesses in their finances, your clients can strategize their financial goals. After deciding to build a comprehensive financial plan, you can guide them through the steps to financial stability. Although financial stability isn’t easy and does take commitment, your commitment to helping them navigate the financial path they take is essential to their success. The detox program at Alta Centers is the first step in addressing addiction and eventually moving towards financial independence. Our detox program, staffed with trained professionals, is dedicated to our client’s health and safety. Located in the Hollywood hills, we provide early-stage counseling, referrals for further treatment, and the comfort needed to begin the path to recovery. For more information, call (888) 202-2583.