It’s normal to be worried about money. According to a study by Northwestern Mutual, money is the No. 1 source of stress for 44% of American adults, outpacing personal relationships and work. More than a quarter of those surveyed said that financial anxiety made them feel depressed at least monthly.
But for some people, this stress and anxiety isn’t just a normal side effect of money troubles. It’s the result of a full-on disorder.
What Is A Money Disorder?
“In general, a money disorder is a chronic pattern of self-defeating or self-destructive financial behaviors,” said Brad Klontz, a psychologist, associate professor at Creighton University and certified financial planner who specializes in researching and defining money disorders.
In other words, it’s a set of behaviors that go beyond simply being “bad with money.” According to Klontz, you’re dealing with a disorder when that destructive behavior leads to significant consequences in your life, impairing your health, relationships, work and more. A disorder is also something that can be treated by a medical professional.
When it comes to money disorders, there are formal diagnoses that can be found within the Diagnostic and Statistical Manual of Mental Disorders (or DSM), the standard classification used by mental health professionals in the U.S., and there are more informal diagnoses.
A Range Of Diagnoses
On the surface, a money disorder may appear to be a simple matter of overspending or underspending. In truth, there are multiple different conditions with specific causes and symptoms.
Compulsive spending: An estimated 6% of Americans have an addiction to spending money ― what is officially known as compulsive buying disorder. “You go shopping for an endorphin rush. A lot of your time is consumed with shopping,” Klontz explained. “Then after you do it, you crash, you feel remorseful, you feel depressed, and that pattern continues to cycle.”
Hoarding: Compulsive hoarding disorder occurs in an estimated 2% to 6% of the population. These individuals have trouble getting rid of possessions that most would consider worthless, to the point that clutter disrupts their ability to use living or working spaces. Hoarding disorder relates to money in that it’s often linked to compulsive buying. Some people with this disorder hoard money specifically.
Workaholism: You probably know a couple of people who like to describe themselves as workaholics as if it were a positive personality trait. But true workaholism is a disorder that often stems from severe anxiety or depression around poor money management or the fear that there will never be enough money. Workaholics become obsessed with work and have trouble delegating. There are also some personality disorders that have a tendency toward a workaholic component, Klontz said.
Pathological gambling: About 2.6% of Americans have an addiction to gambling. Pathological gamblers, like compulsive spenders, are unable to resist their impulses and continue to engage in risky financial behavior in order to experience the “high” of gambling.
Financial infidelity: Financial infidelity is a great example of problematic behavior that wouldn’t necessarily be diagnosed by a doctor, according to Klontz. “You’re withholding or giving false information in the context of a relationship in which the other partner thinks there’s an agreement that you wouldn’t do that,” he explained. “It’s hugely problematic and very common.” In fact, one recent survey by CreditCards.com found that 19% of U.S. adults in live-in relationships are hiding a checking, savings or credit card account from their partner.
Financial enabling: Klontz noted that he first observed this problem in his financial planning practice. He said he has seen many wealthy clients whose monetary enabling of their adult children or other family members is one of the biggest threats to their own financial well-being. Though it isn’t recognized in the DSM, this condition harms not only the enabler’s finances but the financially dependent individual, who never learns to be responsible with money either.
Financial dependence: The flip side of enabling, financial dependence occurs when a person relies on income provided by another person unrelated to work and grows to resent that dependence. “There’s a sense of a loss of control,” Klontz said. “[Patients will] report feeling like they lack meaning, they lack creativity, they lack passion in their life.”
Financial enmeshment: Also known as financial incest, this disorder is defined as an adult sharing inappropriate financial information with a child. For example, someone who commits financial enmeshment might avoid debt collectors by having their child answer the call or share the ugly financial details of a divorce with the child. “This makes the children then feel insecure and leads to problems in adulthood,” Klontz said.
Financial denial: This disorder involves ignoring your finances to your own detriment because thinking about them brings so much stress. You might not open bank statements or ignore calls from your creditors. According to Klontz’s 2012 money disorder study, financial denial or avoidance can also stem from beliefs that money is dirty, unenlightened or unspiritual. Such money-avoidant beliefs are often associated with lower income and net worth.
Even if you don’t suffer from a money disorder, financial woes can lead to more significant mental health issues. “You might not be a compulsive buyer, but you’re so stressed out about money, you’re depressed and anxious. So it wouldn’t be a disorder in and of itself, but finances are what got you there,” Klontz said.
Signs Of A Money Disorder
If you’re worried that you or someone you know has a money disorder, here are some general signs to look out for, according to Leslie H. Tayne, a debt resolution attorney and author of the book “Life & Debt: A Fresh Approach to Achieving Financial Wellness.”
- Avoidance or denial: One of the biggest indications that someone is in financial trouble is that they begin avoiding talk about money and deny that anything is wrong. “If the person appears to get visibly uncomfortable at the mention of money or quickly tries to change the subject, this could be a sign,” Tayne said.
- Change in spending habits: A sudden shift to either spending significantly more or significantly less is typically a sign that something isn’t right.
- Credit card reliance: If a person depends on their credit cards to delay paying for basic expenses such as groceries and utility bills, it can be a sign of a larger problem. “Using credit cards to pay off other credit cards can also be a dangerous path to a bad debt cycle,” Tayne said.
- Mental symptoms: A money disorder can manifest as other mental health issues, such as anxiety or depression. “A person struggling with a money disorder may be suddenly more withdrawn or more on edge than their typical demeanor,” Tayne said.
- Physical symptoms: Finally, there may be physical signs. Tayne said weight loss, weight gain, fatigue and trouble sleeping can all arise from the stress of a money disorder.
Klontz said that it’s common for those who have a money disorder to know what they’re supposed to do but not be able to push themselves to do it, or to try to change and be unsuccessful. Often, it requires some painful event to force the person to truly address their behavior and get help.
“Sometimes you have to hit a bottom around it,” Klontz said. “The gambling addict when they’re having a great run at the table has no interest in stopping gambling. But when they get arrested for embezzling funds from their church ... that’s when they hit a wall.”
When the person is ready, here are some things they can do:
Seek professional help. Typically, a disorder will require some sort of professional medical help. However, you can also enlist the aid of a financial advisor to get your money in order once the psychological side has been addressed. “Sometimes the problem is serious and requires a bigger solution than you can manage on your own – that’s where financial professionals come in,” Tayne said. “Just be sure to do your research to find a reputable professional who is dedicated to helping you, not just taking your money and potentially making your situation worse.”
Reach out to a friend or family member. If you’re not ready to talk to a professional, the first step may be sharing with a trusted friend or family member, Tayne said. “Confiding in someone you’re comfortable with can help get you talking about the issue and coming to grips with the severity of it, which can be difficult to do. You can ask this person to help hold you accountable or support you when you do seek professional help,” she said.
Join a support group. Just as there’s a 12-step program for alcoholics, similar programs exist for people with various money disorders. Consider joining Debtors Anonymous, for example, if you’re dealing with compulsive buying or overspending.
The important thing to remember, Klontz said, is that if you struggle with problematic financial behaviors, you’re not alone. “Shame is one of the biggest barriers to people shifting their financial behaviors,” he said. The truth is that the average American likely deals with some sort of money problem. So if you need help, don’t be afraid to ask for it.