Six steps to curbing compulsive spending
Posted
Nov 26 2007, 09:00 AM
by
Karen Datko
Rating:
This post comes from J.D. Roth at partner blog Get Rich Slowly.
I had dinner with a friend the other night. Over pasta and clams, we talked about life and money. She told me about her brother. "He's a compulsive spender," she said. "He spends money even when he doesn't have any."
"What do you mean?" I asked.
"Well," she said, "for one thing, he spends his money before he gets it. For example, when he was still working with Big Computer Company Inc., somebody told him he was going to get a raise. But instead of waiting for the raise, he started spending as if he already had the money. He never got the raise."
I nodded. I've done that in the past. I used to be a compulsive spender too. For years, I was addicted to shopping. I got a rush out of buying new stuff. I especially liked buying new books and movies. But, actually, I didn't care what I bought: It was the act of buying that made me feel good. Sometimes on the drive home from work, I'd stop at a department store just so I could buy something -- candles, magazines, small pieces of furniture, whatever.
I could rationalize any purchase.
What is compulsive spending?
According to the Illinois Institute for Addiction Recovery, four or more of the following money habits indicate a problem with shopping or spending:
Shopping or spending money as a result of being disappointed, angry or scared.
Shopping/spending habits causing emotional distress or chaos in one's life.
Having arguments with others regarding shopping or spending habits.
Feeling lost without credit cards.
Buying items on credit that would not be bought with cash.
Spending money causes a rush of euphoria and anxiety at the same time.
Spending or shopping feels like a reckless or forbidden act.
Feeling guilty, ashamed, embarrassed or confused after shopping or spending money. Many purchases are never used.
Lying to others about what was bought or how much money was spent.
Thinking excessively about money.
Spending a lot of time juggling accounts and bills to accommodate spending.
I have experienced all of these. In fact, I used to suffer from many of these at the same time. It felt awful. An addiction to spending is scary and dangerous. Like other addictions, it causes victims to feel lost and out of control.
Those who have never suffered from compulsive spending cannot understand the problem. They don't know what it's like to see something and feel the urge to buy it now. They don't know the rush from shopping, and the subsequent nausea from the guilt of having spent even more money they do not have.
At the height of my spending, I had a love-hate relationship with my credit cards. I knew that what I was doing was destroying my life, but I felt powerless to stop. The only thing that gave me comfort was buying new stuff -- the very stuff I've spent the last three months purging from our house.
Coping with compulsive spending
Based on my own experience -- and based on conversations I've had with others -- here are six steps you can take to put a stop to compulsive spending:
Cut up your credit cards. Do it today. "But I need them for an emergency." "But I get cash back." "But they're convenient." No buts. If you have a problem with compulsive spending, destroy your credit cards now. Don't jot the numbers down "just in case." I know how easy it is to go to your desk drawer, pull out the numbers, and place an order online. (Do not attempt to cancel your accounts until you've paid everything you owe.)
Carry only cash. Don't use a checkbook. Don't use a debit card. Inconvenient? Absolutely, but that's the point. If you're a compulsive spender, your goal is to break the habit. To do this, you've got to make sacrifices. You also have to begin to make the connection between buying something and spending money. Plastic (and, to some degree, checks) makes this connection fuzzy.
Track every penny you spend. When I was addicted to shopping, I intentionally turned a blind eye to how much I was spending. Lunch every day at McDonald's? How much could that possibly cost? (Answer: more than $100 a month.) Picking up a few comics on my way home from work? What harm was there in that? Once I began to track my spending, certain patterns became clear. When I saw the patterns, I was able to act on them.
Play mind games. For some people, money is not an emotional issue. They understand it intuitively. They're able to make smart choices without temptation to do otherwise. For most of us, though, money is more about mind than it is about math. For us, it can be useful to play tricks on ourselves. What do I mean by mind games?
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Use the 30-day rule to control impulse spending.
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Ask yourself, "Is this a want or a need?" Try to discover what is motivating the purchase.
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Tax yourself. Whenever you buy something, set aside a predetermined percentage as savings.
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When you're tempted to buy something, write it down. Make a wish list. I do this at Amazon in order to control my spending. I have a gigantic wish list, which I prune occasionally. This wish list keeps me from actually buying things.
Avoid temptation. The best way for me to avoid spending money on comic books is not to enter the comic book shop. If your weakness is music, stay out of the record store (or de-activate your iTunes account). Avoid the places where you'd normally spend.
Ask for help. Beating an addiction can be tough when you're going it alone. Seek support from your friends and family. Ask your spouse to help. (And be open when your spouse calls you on your actions. Don't get angry.) Consider seeking professional help. There is no shame in obtaining psychotherapy for problems that seem bigger than you. Ultimately you must look inward to overcome any form of addiction. A therapist is a trained guide who can help you find the way.
Debtors Anonymous offers free support for people who wish to stop incurring debt. For more information on coping with compulsive spending, read these articles online:
The good news is you can overcome this. You can break free from emotional spending. The bad news is that it's going to take work. It won't happen overnight. You'll make mistakes, and you'll backslide. When you do, don't give up. Don't beat yourself up because you bought a new purse or played a round of golf at the new course. You're human. Keep focused on your long-term goal, and resolve to do better next time.
Other articles of interest at Get Rich Slowly:
“The tyranny of stuff”
“You are your own worst enemy”
“How retailers lure you to shop and buy”
