Last month, at the height of college basketball’s March Madness, billions were won and lost — mostly lost — betting on the NCAA men’s basketball championship tournament.
There’s nothing wrong with a little friendly wagering from time to time — $5 on the annual NCAA bracket or a $1 Lotto ticket when the jackpot gets really high. But for many people, gambling takes an ugly turn when “hitting it big” becomes part of their financial mentality. An astounding one in five Americans said the most practical way to accumulate “several hundred thousand dollars” was by winning the Lottery, according to a recent survey conducted by the Financial Planning Association and the Consumer Federation of America.
Problem gambling destroys families and financial futures. What steps should be taken to protect the family if problem gambling is suspected? Here are some suggestions:
Read the signs first
All addictions trigger erratic behaviors, some more evident than others. In the case of problem gambling, if an adult or minor is suddenly scrounging for additional money, running up credit cards or using credit access checks to make ends meet, monitor their behavior. Catching the problem early is actually the best financial move.
Don’t act without a plan
Dealing with a loved one’s addiction needs honesty and openness, but first, it needs a strict plan with family agreement. Locate treatment and counseling options — such as Gamblers Anonymous — and then talk to a financial adviser or an attorney before you approach the addict. Ask what the best ways are to deal with the money side of the problem based on your own financial situation and then make it part of the addict’s recovery plan.
Consider legal movement of assets
Gamblers should not be cut off from money entirely. They need to be put on an allowance for essentials with all other financial temptations put out of their reach. This should be done only with the help of a financial or tax adviser, but spouses or heirs should investigate taking assets out of joint tenancy and put into the sole tenancy of the non-gambling spouse or family member to protect everyone as long as the addiction remains an issue. This decision should cover everything from checking accounts to investment accounts and business assets. If it can be sold or liquidated easily, it’s a target. Experts say that retirement plans are actually great cover for gamblers — at least for a while — because spouses tend to be beneficiaries or passive joint owners of the account and they can easily miss money being removed.
Non-gambling spouse should consider setting up own accounts
Again, consult an expert, but frequently addiction leads to breakups and divorce, leaving the non-gambling spouse a financial wreck as well. Even if you have no intention of leaving the afflicted person, it’s self-preservation to plan for an independent life while you have the means to do so.
Develop tough-love repayment strategy
So often, families with means quickly pay off gambling-related debt to eliminate the embarrassment that the gambler has caused. Such speedy bailouts are usually a mistake. Actions have consequences, and the addict must be made to reverse the damage he or she has caused. Individuals who make bad decisions tend not to learn from them if they are quickly wiped away by others.
Sign up for credit check program
Credit reporting services can send e-mail updates whenever someone checks your credit report to approve a new loan or credit card. If your spouse opens a new line of credit to access fresh sources of gambling cash, it’s a good way to find out.
Above everything else, safety trumps money
The pattern of elation and desperation addicts live with often produce verbally, emotionally or physically dangerous situations for their loved ones. Checking out financial avenues is important, but not at the cost of one’s safety. Don’t stay in an abusive environment simply because you fear your financial assets will be threatened.
For additional information or a copy of the handbook “Personal Financial Strategies for the Loved Ones of Problem Gamblers,” contact the National Council on Problem Gambling at 1-800-522-4700 or online at www. ncpgambling.org/resources/literature/.
This column is provided by the Financial Planning Association of Mississippi, the membership organization that connects those who need, support and deliver financial planning. We believe that everyone is entitled to objective advice from a competent, ethical financial planner to make smart financial decisions.