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‘Money disorder’: When spending leads to cycles of self-destructive behaviour

It’s not uncommon to have a complicated relationship with money. Some people love to save, and others love to spend.

But for some, it’s more complex, and spending money can lead to a vicious cycle of self-destructive behaviour.

In the book Mind Over Money, co-author Brad Klontz calls such behaviours “money disorders.” He’s an associate professor of practice in financial psychology at Creighton University in Nebraska.

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Money disorders are defined as “distorted beliefs about money we develop from our financial flashpoint experiences,” Klontz previously wrote in an article for Psychology Today in 2010.

“Financial flashpoints are painful, distressing, and/or dramatic life events associated with money that are so emotionally powerful, they leave a lasting imprint.”

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Klontz outlines three main kinds of money disorders: money avoidance (including financial denial and rejection), money worshipping (like compulsive buying) and relational money (such as hiding spending from your partner, also known as financial infidelity).

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By identifying these kinds of disorders, Klontz hopes to help people confront their “money beliefs.” They will then be able to “spot them when they are creeping into [their] minds] and revise them into healthier, more productive ones.”

It’s more than just being “bad with money,” Klontz said in an interview with Huffpost U.S. in April.

Money disorders don’t currently appear as legitimate clinical diagnoses in the “most widely-used medical classifications of diseases and medical disorders in Canada,” said registered psychologist Melanie Badali. Namely, that’s the DSM and the ICD.

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However, experts like registered psychotherapist Jupiter Vaughan see how there could be a connection between past experiences, learned behaviour and spending patterns.

He once had a client who was responsible for financially supporting their parents as a teenager, and it shaped the way the client felt about money as an adult.

“Their relationship with money became very distorted,” Vaughan said. “The appropriate [financial relationship to have with your teenager] is to say, ‘here’s an allowance. Please mow the lawn.’ Not ‘help us keep our house.'”
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As an adult, the client had trouble accepting gifts from others. “They were more comfortable with the opposite … with buying things for other people,” he said.

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In the experience of registered psychotherapist Suzanne Dennison, it’s also common to struggle with problematic spending as a symptom of another disorder.

She’s seen people dealing with high levels of stress and anxiety buy something “to make [themselves] feel better or distract [themselves] from everything else that’s going on,” she said. “If I’m out of control, I can take control.”

The different kinds of money disorders

According to Klontz, there are six main types of money disorders.

Financial denial is trying to “minimize money problems by refusing to think about them altogether.”

Financial rejection means you experience guilt “whenever money, of any amount, is accrued.”

Hoarding happens when “stockpiling objects or money provides a sense of safety, security and relief of anxiety,” he said.

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Compulsive buying is categorized as “overspending on steroids.” Klontz said people who suffer from this often learned as a child that the ritual of shopping can provide “temporary escape” from worry and anxiety.

Financial infidelity it when you make purchases “outside an agreed-upon budget” with your partner, or lying to your partner about “the cost of a big-ticket item.”

Finally, financial enabling is when you want to give money to others “whether you can afford it or not.”

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How to recognize the symptoms

The first sign that you may be spending money in self-destructive way is that the people around you voice concern.

“Multiple people in your life saying, ‘you know, I think you’re spending too much money on something,'” Vaughan said.

They’re also likely to urge you to rein in the spending, or see a financial advisor.

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However, the problem with money-related issues is that family and friends may be less inclined to voice concern because it’s considered rude or too personal.

“Money is such a weird thing,” Vaughan said.

“It’s not uncommon for people to not be told by somebody other than their family or their spouse, because people feel it’s none of their business.”

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Another sign is that you’re not actually happy about the things you’re buying.

“You realize that, when I’m doing it, I don’t feel in control,” Vaughan said.

“I’m just buying things that afterwards, when I leave the store, I ask myself, ‘why did I buy it? I don’t even like it.'”

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How to unlearn poor spending patterns

The good news is that with the help of a therapist and a financial expert, “everyone can change their money mindset,” Tracey Bissett said. She’s the president of Bissett Financial Fitness.

The first step is to “get an assessment of reality,” she said. This will likely come from those people around you who express concern about your spending habits.

“Don’t discount what they’re saying, especially if you hear the same thing from a few people.”

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Once you’ve come to terms with the problem at hand, you will need to “develop a plan, which may include working with a financial coach and/or a psychologist,” said Bissett.

“When I work with people, we focus on their values and goals so that we can create a plan that aligns with what they want their life to be like. Everyone should be focused on what specifically is important to them.”

To shift your perspective away from spending, Bissett recommends focusing on gratitude.

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“This is a proven technique to change your money mindset,” she said. “By appreciating that you woke up in the morning, were healthy enough to get out of bed, have clothes, shelter and food and so on, you start thinking about things as possible and that your life is filled with goodness.”

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The last step is to set the plan in motion, and not to worry too much if mistakes are made along the way.

“Recognize the positive changes you’ve made in your life and get yourself back on track without beating yourself up,” Bissett said.

“Be kind to yourself … you will make missteps.”

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Meghan.Collie@globalnews.ca