By Vincent Barbera, CFP®, MSFS
In three short years, from 2014 to 2017, the U.S. saw an increase in drug overdose deaths, from 47,055 to 72,306. (1) And of those deaths in 2017, 68% involved an opioid, (2) a sobering statistic that led the U.S. Department of Health and Human Services to declare a national opioid crisis. (3) Now, opioid addiction is so prevalent that around 130 people die every single day from a related overdose. (4)
For every death, there are countless more people struggling with addiction. In fact, studies have found that up to 29% of patients who take prescribed painkillers abuse them. Opioid abuse can lead to even more devastating habits, as about 80% of people who use heroin admit to abusing opioid medications first. (5) You might be thinking that the opioid crisis is primarily about people’s physical well-being, but every aspect of our lives is intertwined, and in this case, opioid abuse can lead to detrimental financial outcomes.
The Financial Effects Of Opioid Abuse
Opioid abuse can affect personal finances in a myriad of ways. First of all, drugs cost money. Whether they are prescription or illicit drugs, they are not free. Once addicted to a drug, a person will often spend unwisely and beyond their means to fulfill their need for it. This can lead to draining savings and running up debt.
Once a person’s own resources are depleted, they may try to get money from others. As such, the opioid crisis has led to an increase in elder financial abuse. It has become so prevalent that the North American Securities Administration Association is now providing resource material to investment professionals to help them identify the exploitation and manipulation of seniors by drug abusers. (6)
Those who wish to get clean (and their loved ones) face another set of financial challenges. In-patient drug rehabilitation can cost anywhere from $12,000 to $60,000 depending on the type of program and duration. (7) These treatments are not guaranteed and it’s not uncommon for someone struggling with addiction to end up in rehab multiple times. Even after rehabilitated, some former drug abusers require ongoing medication, which can cost thousands of dollars a year.
Things get even more complicated if the opioid user has dependents, such as children. Many grandparents are unexpectedly thrust into the role of guardian for grandchildren whose parents cannot take care of them due to addiction, imprisonment, being in treatment, or having died from an overdose. In these situations, seniors are often forced to use their savings and mortgage their homes to pay for treatment for their adult children and provide financially and physically for their grandchildren.
Your Financial Plan Can Help
While no one expects to be affected by opioid abuse, about 1 in 5 adults say they personally know someone who has been addicted to opioids, (8) so it is wise to be prepared. The first step is simply to educate yourself on the issue. Reading this article and others like it will help you understand how opioid abuse occurs and affects users.
Next, it is important to watch for warning signs in your own household and among those you care about. Drastic changes in spending habits or sudden, inexplicable debt can be red flags. An abrupt divorce or child moving back home, while commonplace, can also result from opioid abuse. If a friend or family member unexpectedly begins expressing interest in your financial accounts, that could also be a warning sign and often precedes elder financial abuse.
To be proactive, you should stay alert to any uncharacteristic behavior. If you suspect someone you know may be struggling with opioid addiction, seek out resources that are available to them. From hotlines to addiction counseling services and rehabilitation centers, the sooner the problem is addressed, the better the chance of resolving it before physical and financial lives are destroyed.
Finally, meet with a financial advisor to create a plan. There are steps that you can take to protect your portfolio in this and other unconventional situations. Click here to access our online calendar and easily schedule a free 15-minute introductory phone call, or you can email us at email@example.com or call 610.727.3960 to schedule a meeting and be proactive about your family’s future in this time of national crisis.
Vincent R. Barbera, CFP®, MSFS is a managing partner and co-founder of Newbridge Wealth Management, a private financial counseling firm located in Berwyn, Pennsylvania. Believing in a patient, disciplined approach to investment management that delivers value and peace of mind, he utilizes a process-driven approach to financial planning that provides comfort and clarity to his clients’ long-term goals. Along with a bachelor’s degree in psychology and business, he has a master’s degree in business and financial planning and Certified Financial Planner™ designation. Learn more by connecting with Vincent on LinkedIn, or send him questions at firstname.lastname@example.org.