Sobriety and Finances: Managing Your Money in Recovery

Nikki Seay
Calendar icon Last Updated: 04/15/2024
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Managing money in recovery can be difficult.

I entered recovery with $50,000 of debt. Credit cards, payday loans, loans, overdrafts, and store cards were slowly suffocating me every month as I tried to make ends meet.

I was too deep in active addiction to care about my financial situation. Needless to say, managing my money in recovery was the last thing on my mind!

I thought I was really creative in finding ways and means to buy more drugs and alcohol. I sold most of my possessions, took out loans, bounced checks all over town – I even pawned my mom’s jewelry!

But by the end of my using days, I had run out of ideas to generate more money.

Managing Money in Recovery Can Be Overwhelming

I racked up so much debt that most companies wouldn’t even consider giving me a consolidation loan. My credit was in horrible shape. By that point, I’d also lost my job, my sanity, and access to credit.

It’s a good thing that recovery came when it did, otherwise I’d hate to think what else I could have lost. It was time to take a good look at managing both my sobriety and my finances.

I’m not alone in my debt situation. “It is very common for people in recovery to be in debt” says certified money coach and professional recovery coach, Linda Parmar.

“When we are active in our addictions, money can be spent very quickly, easily and unconsciously.” In Parmar’s experience, when you start to work on your financial sobriety you become conscious about your decisions with your money.

How Sobriety Helped Me Get My Finances Together

Parmar says that our patterns with money lead us to where we are with money. During active substance using, for example, we’re often making poor decisions leading us into more and more debt—so when we finally do find recovery and take a look at our finances, it doesn’t feel good.

“There is a lot of shame, resentment, embarrassment and so many other feelings involved in your money story,” says Parmar.

That was certainly the case for me. Avoidance would be a great way to describe how I handled money during addiction, and even in the early stages of recovery because I was so ashamed at the things I’d done to get money.

Taking action around our financial situation in recovery is often an extension of our sobriety, which is where the phrase Financial Sobriety comes in.

“Financial sobriety is when you start to address the challenges that you have with your finances and rebuild your relationship with money,” says Parmar. She explains, “When we start to peel back the layers of our recovery money often comes up. The patterns that come up often mirror our addictive behaviors.”

A Money Management Journey in Recovery

Parmar suggests that we first start our journey of managing money and healing by taking a look at our relationship and history with money. She suggests first picking up a pen and writing your money story by addressing these writing prompts:

“What was your first memory with money and from there write significant things that happened with you and your money over your lifetime. Connect with how your childhood and experiences have shaped who you are with money today.”

Through doing some work around my money story, I realized that money represented many different aspects of my life and my history:

  • It provided access to substances and those substances numbed my pain
  • It was how my parents showed me love: they would lend me money instead of providing affirmation and affection
  • I thought that my lack of money was a reflection of my worth
  • Money provided the ability to self-soothe with substances. When I didn’t have any, I felt like I had no control over my state of being
  • I lacked the confidence and skills to handle money effectively and therefore felt like I was inadequate and stupid

Realizing Your True Worth

Of course, after working through each of these beliefs as part of managing money during recovery, I can see how harmful and untrue they were. For instance, my worth has nothing to do with money – worth comes from believing I am worthy.

I also realized that much of my story wasn’t caused by a lack of intelligence; I simply hadn’t been educated enough or attained the proper tools to handle money.

And lastly, I was inebriated for so much of my twenties and thirties that I didn’t make decisions based on self-love; I made them based on what would allow me to escape my life.

Financial sobriety was a second awakening for me. It helped to guide me through overcoming these limiting beliefs and moving towards taking helpful actions to build a new money story.

Actionable Steps to Get Your Finances Together

Financial sobriety is a personal journey, but there are similarities in our stories and the actions we can take to get our finances in shape. If there is one piece of advice I could offer anyone starting this journey is to know that you are not alone and many of us have been in your shoes. Shame isn’t helpful—but action is.

Here are some of the steps people in recovery have taken to get their finances together and some expert tips from Parmar:

  • Create a full financial picture: Take an honest look at your financial situation and try to be free from judgement. Parmar suggests getting a clear picture of your money. Write out your debt, savings, investments, loans, mortgages, etc.
  • Inventory: Make a list of your debts, the amounts, the creditor (the institutions and organizations you owe money to), and the interest on the debt.
  • Ask for help: Speak to a therapist, financial advisor, or financial coach so that you can formulate a plan of action.
  • Check your credit report: Parmar suggests ensuring the report is correct, looking to see if you have any negative marks, and if you do—and they’re inaccurate—message the credit bureau to get them resolved. “Credit Karma is a great place to go for checking the credit bureau and does not affect your credit score and they will lead you to how to increase your score,” says Parmar.
  • Consolidate your debt: Get your financial institution’s advice about getting a consolidation loan so that you can pay off all debt and then make a smaller, usually lower interest, payment. Note: You may have to get a credit building loan first — a small loan that you loan to yourself and pay back to increase credit. You can do this for just a few hundred dollars, if you can get access to that amount.
  • Negotiate with creditors: If you can’t get a loan, ask the creditors if you can arrange a payment plan where the interest rate is frozen or reduced. Make a priority repayment plan based on the highest interest rate debt first.
  • Cut up credit cards: If you do obtain a loan, cut up all of your credit cards to prevent you from using them, but do not close the accounts if you can. A good credit history is built on the length of time you’ve had credit and the amount of credit lines you have (as well as credit card utilization and other factors).
  • Make a spending plan: Parmar suggests gathering information on your personal and home expenses, then making a list of your income and expenses to ensure you’re not spending more than you make. If you are spending more than you make, Parmar recommends that you assess your needs versus wants when it comes to expenses, such as TV subscriptions, gym memberships, and whether you can reduce the cost of your utilities by switching providers.
  • Save!: If you can, start to save money. “Set goals of what you would like to save for plus emergency savings, periodic expenses (annual or intermittent expenses). Even if you start small the habit of starting to save is very important to your financial sobriety,” says Parmar.

Have Patience With Managing Your Money in Recovery

It took me around three years to get my finances in order. While difficult at times, the process really encouraged me to get smart around my spending habits.

I learned to save for things first, rather than racking up debt to pay for them later. It also felt great to repay debt and have that emotional weight removed—much like the relief from getting sober!

If you or someone you love is experiencing a substance use disorder, help is available, call 800-681-1058 (Info iconWho Answers?) .


Nikki Seay Bio Image
Nikki Seay, LPN, BS
Addiction & Mental Health Author
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Nikki brings more than 10 years' experience in content and healthcare. She holds a Licensed Practical Nursing degree and a B.S. in Marketing. In recovery since 2010, Nikki understands addiction from both a personal and a clinical point of view, which helps her create content that truly impacts our audience.