If you frequently overspend, find yourself living beyond your financial means, or are always in need of instant cash, it’s possible you view yourself as a careless spender who struggles with money management. However, these behaviors could signal a deeper issue known as a money disorder. Here’s how to recognize it and what steps you can take.
Understanding Money Disorder
According to Brad Klontz, a psychology professor, a money disorder is any financial behavior that has harmful effects on your life. This means not only making less than you’re capable of but also partaking in actions that negatively impact your health, relationships, and career.
In the United States, money disorders are recognized in the Diagnostic and Statistical Manual of Mental Disorders, which is published by the American Psychiatric Association.
At first glance, symptoms of a money disorder may appear to be simply wastefulness or, conversely, excessive frugality. However, the reality is that symptoms are much broader. Here are some indicators that psychologists have identified:
- You avoid discussions regarding finances. You may hide your problems from loved ones and insist that everything is okay.
- Your spending habits suddenly change dramatically, either increasing or decreasing, without any clear reason for that shift.
- You misuse credit cards, such as using them for basic necessities or taking out new cards to pay off older debts, indicating that you may have ignored these issues for quite some time.
- Thinking about money brings you feelings of anxiety and depression.
- You become irritated or shut down when conversations about finances arise.
- You may experience significant weight fluctuations, chronic fatigue, and sleep disturbances.
- You may be working excessively, putting in long hours at the office, bringing work home, and feeling unable to relax due to a constant need for more money.
- You struggle to spend money even on essential items and feel long-term regret after shopping trips.
- You often make impulsive purchases that stretch your budget and feel a sense of guilt afterward.
Characteristics of Money Disorder
Experts categorize the signs of money disorder into several groups.
Compulsive Spending
This is an obsessive drive to shop and a compulsive need to make purchases. Often referred to as shopaholism, this disorder affects approximately 6% of individuals. Before a purchase, one may feel excited and hopeful, but once the transaction is completed, they often experience guilt and sadness.
Hoarding and Extreme Frugality
This condition presents the opposite scenario: an obsession with saving money and an intense fear of spending it. In extreme cases, hoarders may have significant savings yet live in squalor, unable to part with anything they own.
Workaholism
Many people take pride in being workaholics, viewing it as a virtue. However, genuine workaholism is a pathological obsession with work and income that manifests as an inability to disconnect from work, leading to stress and social isolation.
Financial Deceptiveness
This involves an individual misleading their family about their financial situation, including income or debts, often due to fear of criticism or discomfort discussing these topics.
Overprotection
This is typical among the affluent, who may overwhelm loved ones with financial support and rush to solve their problems, preventing them from learning how to be self-sufficient and take initiative.
Financial Dependency
This scenario occurs when a person, often out of fear or immaturity, does not earn money themselves and relies entirely on someone else for financial support. This situation differs from mutual family agreements where one partner manages household duties.
Financial Indiscretion
This behavior can be described as financial abuse, where parents involve their children in their financial struggles, sharing details they are not mature enough to handle, causing unnecessary stress.
Denial
This manifests as ignoring financial issues entirely, with individuals often avoiding bills or avoiding communication with banks, pretending that their financial problems do not exist.
Steps to Overcome Money Disorder
Since money disorders are not specifically diagnosed conditions, there are various forms and manifestations, each requiring a tailored approach. However, some general suggestions can help.
Acknowledge the Issue and Seek Solutions
You must admit that your spending habits, debts, or extreme saving behaviors are damaging your career, relationships, and peace of mind. These problems can lead to constant anxiety and the need to hide from creditors. Ultimately, addressing this issue falls to you.
This entails evaluating your financial situation, listing all debts and unnecessary expenses, creating a plan for repayment, and monitoring your income and expenditures. If this seems overwhelming, consider consulting a financial advisor for assistance.
Participate in a 12-Step Program
Numerous support groups for anonymous debtors and spenders operate on a 12-step recovery framework. These groups foster community support, aiding members in overcoming financial issues and establishing healthier spending habits.
Reach Out for Support
Share your struggles with supportive loved ones or seek the guidance of a therapist who can help you uncover the roots of your unhealthy financial behavior and guide you toward recovery—both financially and mentally.