The Financial Consequences of Addiction

Among the many negative consequences of addiction, financial cost is unavoidable. A lucky few may be able to carry their losses and keep functioning but for many, the pain of it all will surely become intense, unless they stop their addictive habit. This pain may eventually become a catalyst for change, but it will usually come too late to stave off financial crisis. Denial of reality and trying to ‘buy one’s way out of trouble’ will have prolonged the misery too far for most people to repair. The good news is that, with the benefit of sobriety, many recovering people are able to rebuild their finances along with the rest of their lives.

There Are Many Financial Consequences

Addiction has a long reach, and the financial costs of addiction are more varied and more damaging than most people think. It is not just the direct drain on your bank account that addiction exacts for keeping it going on a daily basis – the money you need to buy drugs and alcohol, gamble or feed your shopping addiction for example. That can be dire and vicious enough because it re-occurs relentlessly, usually daily. But then there are the indirect costs (such as loss of employment) which might not happen but are made more likely by your addictive behaviour. Further beyond these probable indirect costs, there are a whole range of unforeseen and less likely, but nevertheless possible costs that may or may not occur (such as an expensive divorce on the grounds of abusive behaviour). These should still be regarded as potential threats to your finances that could one day happen.

Direct Costs

A quick look at some typical direct costs shows how seriously your finances can be affected just by feeding your addiction on a daily basis.

  • Cost of alcohol: though intakes vary, a typical alcoholic consumes the equivalent of a bottle of spirits per day which at supermarket prices, equates to about £100 per week – at least £5k per year – but this can be far larger when social drinking is involved. Bar prices are high.
  • Cost of drugs: cocaine and heroin are both highly popular and expensive. Heavy use of either could cost £20k per year. Crystal meth might cost £10k, which is why many people switch to it from heroin and cocaine. A cannabis habit is likely to cost £4 – 5k per year.
  • Cost of gaming: Many games are available free, but some charge the player for extras such as more powerful weapons. The direct financial toll of a gaming habit is lower than some other addictions.
  • Cost of tobacco: a cigarette smoker on 20 per day spends about £4k per year. If they roll their own, the cost would be £2k.
  • Cost of gambling: gambling has the potential for you to lose everything including your home. Personal computers and credit cards make it possible to run up huge debts very quickly. The suicide rate among gamblers is the highest for any addiction. Beware the glamour.
  • Cost of investing: investing sounds a safe word but if done addictively and repeatedly it becomes day-trading with the potential to incur enormous losses. Cryptocurrency trading is popular because its volatility makes it more exciting but there is always the potential to lose everything you have. Some forms of investment that allow you to sell short (sell a stock you have yet to buy) have the potential for huge losses too.
  • Cost of shopping: This sounds a relatively harmless occupation, but the internet and credit cards have made it easy for people to spend tens of thousands on items they don’t need and can’t pay for.
  • Other addictions: behavioural addictions of all kinds nearly always involve a direct cost – sex, overeating, and over-exercising come with a price tag. Perhaps the only exception is an eating disorder such as anorexia nervosa, where direct cost is minimal (but other costs can be huge).

Depending on the type of addiction, direct costs can vary enormously, but they represent just the tip of a very nasty iceberg that can rip the bottom out of your finances.

Indirect but Likely, Costs

Paying out simply to keep your addictive habit going from day to day is the start of your financial exposure but few addicted people get away without paying a lot more. Indirect costs are likely to be high but unquantifiable. We ignore them at our peril. Here are a few examples:

  • Loss of income through job loss: although employers today have a more enlightened approach to addiction among employees, people still lose their jobs because of their addiction. In some types of work (where driving is required, for example) dismissal may be automatic if an employee presents for a shift in an intoxicated state. The likelihood of finding alternative work may be poor for such people until they can establish lasting sobriety. Thus, unemployment can trigger a whole series of negative events – loans cannot be serviced, mortgages unpaid, children underfed.
  • Healthcare: addiction attacks the body and the brain. Even if your major organs such as heart, liver and kidneys don’t require attention, your mental health probably will. A high proportion of all hospital admissions are addiction related in some way. You may require counselling or more intensive treatment. In Britain, the NHS does a wonderful job at little cost to the consumer, but private healthcare comes at a high price. Even if you keep your job, the time you spend on detoxification or medical care may be deducted from your pay and if you are self-employed, a long lay-off may be disastrous.
  • Loss of productivity: it is impossible to give your best at work of any kind when you are in active addiction. Instead, you are likely to be listless, distracted and generally underperforming. People will notice, however hard you try to hide your shortcomings. This can affect your chances of promotion or, if you are freelance, your ability to self-promote as a quality service provider. Over time, the effect on your bank balance will show.
  • Legal costs: addiction causes trouble – our self-destructive behaviour leads to all kinds of legal problems – accidents, negligence, assaults, theft, debt and drink driving to name just a few. Coming up against the law in its civil or criminal form will quickly empty your bank account even before any costs and damages that may be levied.
  • Neglect of good practices and responsibilities: most addicted people are either careless or ignorant of prudent practices and responsibilities such as insuring against loss, paying bills on time to avoid late payment charges, healthcare insurance or sensible budgeting practices. Not renewing a loss of profits insurance, for example, because you have spent the money on cocaine could turn out to have been a very bad decision.
  • Cost of borrowing: credit card providers and some loan companies charge exorbitant rates. Addiction leads people into debt. A gambler with £50k debt on credit cards might pay a further £11k interest in a year.

Indirect but Less Likely, Costs

  • Forced sale of assets: when the strain on finances becomes intense, people may be forced into selling major assets on unfavourable terms because they cannot wait for a better market price. This is especially dangerous in markets such as housing and stocks and shares, which tend to be cyclical.
  • Divorce: unfortunately, some marriages cannot bear the pressure of addiction, but the denial of addiction may render them unforeseen. Although spouses are often supportive to the point of co-dependence, they have a breaking point. Divorces, where addiction is involved, tend to be bitter and expensive for the addicted person.
  • Fines and penalties: addiction can lead people to behaviour that is completely out of character and beyond unacceptable. There are people in prison for crimes they cannot remember committing – they only know that they were intoxicated at the time. Even when the prison is avoided, there may be heavy fines and penalties levied for crimes such as financial impropriety and public disorder.
  • Loss of professional recognition: high standards are rightly expected of professionals such as doctors, lawyers and accountants. Sometimes they do things that they would never dream of doing while sober. Being stripped of their accreditation means financial disaster and it happens to hundreds of professionals every year. Some may achieve reinstatement later, but the financial cost is still enormous.

Cost of Rehabilitation

The cost of a few weeks in residential rehab might cost you £25k-30k. You might require further, less intensive care after that which, though less expensive, could total another £10k. People often baulk at these sums and exclaim that they cannot afford the cost. Not so many have that kind of money in their bank account. On the other hand, your addiction could be costing you more. Substance abuse – especially if alcohol, drugs and tobacco are all involved, can cost £10k-20k per year in direct costs alone and indirect costs could easily double this. In the case of behavioural addictions such as gambling or shopping, for example, the annual costs in extreme cases are limited only by the amounts a person can beg, borrow or steal. With this in mind, can you afford Not to go into rehab?

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Rehabilitation – The First Step

At Castle Craig Hospital we are always ready to discuss your concerns about rehab, including cost and the ways this may be covered. Health insurance, NHS and private funding are all possible. We are proud to have helped many people gain lasting sobriety and thereby return to financial health, in addition to physical and mental health.

Rehabilitation Leads to Financial Health

Sober people can achieve great things. Starting with the courage and honesty to face their situation, people often find it possible to develop a plan to bring their finances back into balance. Even when people have incurred large losses through gambling or cryptocurrency trading, they can still recover. This may include some hard decisions and some negotiations with creditors, but it can be done. It may take time, but for those prepared to make recovery their priority, it is certainly achievable. As part of your continuing care plan, we will help you take the first steps back to financial stability.

Our team of experienced admissions staff are here to make the process as easy as possible for you.

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