How is your relationship with money? If you’re like most Americans, the answer is likely complicated. In a 2015 survey by the APA, money was indicated as a main source of stress for Americans. Since money is something that impacts us throughout our lives, it’s important to find ways to manage this stress because long term stress can harm your health.
You may be stressed about money because you truly do not have enough coming in to cover all your expenses, or because you are in debt. A 2018 study by Northwestern Mutual showed that the average American is $38,000 in debt. There are plenty of ways money can create stress, and some of those are due to a disordered relationship to money. Brad Klontz, a psychologist who specializes in money disorders, states that “a money disorder is a chronic pattern of self-defeating or self-destructive financial behaviors.”
Julie Cazzin at MoneySense writes about the seven deadly money disorders, which include hoarding, compulsive buying, underspending, financial infidelity, workaholism, and financial incest. Below I explore each of these in more depth.
- Hoarding. Someone who suffers from hoarding feels unable to get rid of possessions, and the thought of getting rid of items causes significant emotional distress. Other aspects of hoarding can include feelings of embarrassment, damage to relationships, lack of living space due to accumulated possessions. Hoarding can also correspond to compulsive buying.
- Oniomania, or compulsively buying. People with this disorder spend even though they may be doing financial damage by spending more money than they have available. Spending money becomes irresistible, and even though the items being purchased may not provide any joy or be useful, they continue with the behavior because the act of spending money can provide a “high.”
- Underspending. At first glance, underspending can seem like a smart way to save money, but when we are talking about disordered behavior, we aren’t talking about someone who’s simply cutting back to save money. Someone who has a problem with underspending is chronically worried about money, despite having plenty of income and savings. Underspending can become dangerous, and even expensive, when someone is neglecting their basic needs – like skipping doctor’s appointments – because of cost, or neglecting maintenance on their home or vehicle which, left unaddressed, can become even more costly.
- Committing financial infidelity. This occurs when one spouse makes significant financial decisions without involving the other. These decisions can threaten the financial security of the couple and undermine trust in a relationship. A study by creditcards.com found that 28% of millennials in live-in relationships, and 19% of all U.S. adults in live-in relationships, admitted to having a secret checking, savings, or credit card account.
- Financial Enabling. Financial enablers may have good intentions, but their actions are often damaging. Someone who is a financial enabler may be helping someone so much that the person being helped becomes unmotivated to take action and become independent. They may also be giving beyond what is financially sensible for them or may feel unable to say “no” when asked for help.
- Being a workaholic. This is different than just being a hard worker. If a person has poor boundaries around their work and personal life – think working through the weekend or throughout a vacation – then this is more in line with workaholism. This can be dangerous because it can lead to burn out, health issues, negatively impact relationships, and so on. Someone may become a workaholic if they are fearful about financial scarcity or money management.
- Financial Enmeshment (referred to as financial incest on Cazzin’s list).It’s important to communicate with your kids about money so they can learn how to manage their own finances and develop healthy financial habits. However, if adults don’t have proper boundaries, they may cross the line into financial enmeshment. (Keep in mind that financial enmeshment can occur in any type of relationship, but here I’m focusing on what it can look like in a family context.) Poor boundaries might be a parent openly discussing financial worries and sharing anxieties about money with their children. This can create insecurity for kids and could inform the way kids relate to money throughout their lives. Financial incest can also mean having a child communicate about money between parents by acting as a go between, or over involving them in household money management.
What can you do if you think you may have a disordered relationship with money? Reach out to a mental health professional who can help you explore how your financial history could impact your current spending habits. It often isn’t enough to simply come up with a practical plan of handling your money if you don’t address the underlying emotional reasons you are displaying the behavior in the first place.