If you’re old enough to read, then you’ve almost certainly been “had” financially once or twice.
Perhaps a “friend” borrowed money and didn’t pay it back. Instead, she “remembers” that it was a gift from the start — and tirelessly tries to convince you.
Or maybe your brother-in-law sold you mortgage life insurance — and you didn’t need it. You later found out that he pocketed a huge commission and he knew you didn’t need it from the start.
Beyond the financial losses, the emotional fallout can be catastrophic.
Those feelings can weigh so heavily on you that it becomes debilitating.
You simply freeze. You become unwilling to take further financial action or to trust other people.
I can understand why you might react this way, but it’s really no way to live. It feels terrible, and it will cost you big-time in terms of lost opportunities in the future.
So what is the solution?
My experience tells me there are five steps that you need to take to overcome financial betrayal.
1. Damage Control
If the financial betrayal is happening now, you have to stop the bleeding. If someone has taken advantage of you financially, don’t allow them to continue doing so. This may seem like a no-brainer, but sometimes we tell ourselves that if we only give the perpetrator another chance or a little more money, it will all work out.
This is like Charlie Brown trusting Lucy NOT to pull the football out from under him at the last minute — like she’s done every time she had the chance.
Are you Charlie? Who is Lucy? Are you going to give her yet another chance to fool you?
Don’t fall for it. Get out now.
2. Get Right-Sized
As I mentioned above, the emotional pain of being messed with can be more devastating than the financial losses involved. Part of untangling that emotional knot is to understand the true nature of the losses you’ve incurred.
Somebody sold you the wrong life insurance. Okay… But you can cancel it.
Your spouse “nuked” your budget. Fine… You can fix that.
I know this is going to sound terrible. But even if you lose your small business, can’t you open another?
If a “friend” wrecks your credit, you can rebuild it… Yes?
You can even survive bankruptcy.
It’s not cancer… Right?
Very few financial errors are fatal to your future. Keep that in mind.
Don’t blow the problem out of proportion. This will help you stay present and make adult decisions.
Of course, I’m not saying to minimize the problem. But, in most cases, the problem is the person in your life who has betrayed you — not the actual financial cost of the deception.
3. Draw Boundaries
You certainly don’t want to repeat what you’ve just gone through. And you don’t want to give the “perp” another opportunity to put you in this position again.
You don’t have to write this person out of your life completely (although if it’s your brother-in-law, you have my blessing if you do). But you do have to install safe boundaries around this person so you don’t get taken to the cleaners yet again.
If someone has demonstrated poor character, have no further financial dealings with them. Period.
This is easier if it’s a non-spouse. But if it’s your husband or wife, it’s a bit trickier.
If that’s the case, explain how this failure has impacted you financially and emotionally. You may even want to see a marriage counselor together because it’s a core issue. I say this because you can’t have a happy relationship with someone when you have resentment towards them and/or you don’t trust them.
What can you do to put in safeguards?
Whatever you have to do, do it. Protect yourself. You’ll be doing yourself and the other person a big favor by being honest about your feelings.
4. Check With Others
If you’re hurt, you should talk about it with people you are close to. Tell them what has happened and what you plan to do about it. This way, you’ll have an objective pair of eyeballs giving you feedback to make sure your response isn’t over the top.
5. Understand Who the Real Loser Is
When we get hosed, we often blame ourselves and label ourselves the loser. This is not correct or even helpful.
Do you need to make changes? Yes.
Do you need to be more careful around others? Maybe.
But the real loser is the person who took advantage of you. All you did was trust someone. They are the person who behaved despicably. You only have to make minor changes and re-affirm your boundaries. The other person has a lot of amends to make. They have to live with the person they are. Thankfully, you don’t.
Have you ever had to deal with financial betrayal? What happened? What did you do? What was the result?