“Shop ‘til you drop.” “Shopaholic.” Those are just funny expressions, right? In some cases, they’re anything but.
Compulsive shopping can range from an occasionally budget-busting diversion to a drop-dead serious addiction. At its most extreme levels, a compulsive-buying problem can lead people to hide or lie about their purchases, max out numerous credit cards, live on the edge financially and stockpile items that never get used and often still have the price tags attached.
Variations of this addiction affect people from every income level – including people who have no trouble paying all their bills. And while plenty of people out there haven’t reached such a severe state of affairs, they nevertheless find themselves grappling with sky-high levels of unsecured debt because of their spending habits.
“What is so challenging here is that a compulsive spender is like a compulsive gambler who is forced to spend 12 hours every day in a casino and not gamble,” said Daniel Wishnatsky, a certified financial planner in Phoenix.
“Compulsive spenders are surrounded by a consumer-driven economy and an American marketing machine that is constantly trying to get them to spend more. … It can be argued that compulsive spending or over-spending is the drug of choice in this country.”
Spending and debt problems have existed as long as money has existed, so in a very real sense, this issue isn’t new. That said, the onslaught of advertising images bombarding people each and every day — in combination with easier and easier access to credit — have conspired to make the problem much more dire for growing numbers of people, experts say.
Researchers from the University of Florida reportedthat between 2 percent and 8 percent of the U.S.population spends money compulsively, and the average compulsive spender is carrying $23,000 in debt. (That debt doesn’t include mortgages on homes.)
“Spending addiction is probably the fastest-growing addiction we’re treating, along with maybe addiction (to narcotics) for chronic pain,” said Rick Zehr, vice president of addiction and behavioral services at the Illinois Institute for Addiction Recovery at Proctor Hospital. The institute offers a comprehensive in-patient treatment program for compulsive shoppers and spenders.
Zehr said that as with any kind of addiction — be it alcoholism, gambling or drug dependency — addictive spending is often rooted in punishing feelings of low self-esteem and problems with impulse control. For many compulsive shoppers, their habits start out as something manageable — and immensely enjoyable.
Over time, it becomes second nature for them to turn to shopping and spending to elevate their mood when they’re feeling depressed, anxiety-ridden, angry or lonely.
“They often describe feeling a rush of euphoria or anxiety when they’re making a purchase, just as other addicts talk about feeling a rush of euphoria or anxiety as they’re driving to the casino or making that cocaine purchase,” Zehr said.
“And afterward, the feelings are the same — the feelings of guilt, shame and being embarrassed or confused as a result of their spending. There’s also serious emotional and physical withdrawal when you take away their credit cards for the first time. They might even vomit. It’s really not very different from the heroin addict or the gambling addict.”
In their darkest forms, spending addictions lead people to do everything they can to hide the whole truth about their circumstances from their closest family members and loved ones. A spouse often will have no idea that his or her significant other has furtively opened multiple credit-card accounts, along with a post office box where the mounting bills are piling up.
“This can be just devastating for families,” Zehr said. “And unfortunately suicide rates are higher with spending addicts. … They experience devastating shame and humiliation ... and sometimes they think, ‘Well, I’m so far into debt I can’t get out of it. The only thing I can do is kill myself to give the life insurance money to my family to help them pay off this debt.’ It becomes a thought that’s not just fleeting.”
Olivia Mellan, a money coach and psychotherapist based in Washington, D.C., describes herself as a “recovering over-spender.”
“The urge to shop used to take me over like a tidal wave,” recalled Mellan, author of the books “Overcoming Overspending” and “Money Harmony: Resolving Money Conflicts in Your Life and Relationships.”
“I didn’t have the wherewithal to say, ‘You really don’t need that,’ or, ‘Maybe you can’t afford it this week.’ ”
Mellan said she was deeply affected by the example of her mother, who used to buy clothes for her as a way to express love for her.
“So when I was grown up and I felt lonely or depressed, I’d buy clothes too,” Mellan said.
In the early and mid-1980s, Mellan’s therapy work began to focus on finding ways to help people with their money problems. Right around then she began to realize that she needed to help herself as well. Another catalyst: Her husband came to serve as a supportive money mentor for her.
“I got an 800 in my college boards in math. I’m not stupid,” she said. “So why did I need my husband to tell me to pay off my credit cards in full every month? I don’t know why, but that’s what I needed.”
Mellan was able to get the help she needed through the support of her spouse and through her own in-depth analysis of behavioral patterns around money. Others suffering with ongoing money woes end up needing more objective help from the outside.
That outside help can come in the form of specialized therapy, in-patient treatment or co-dependency programs. It also can come through Debtors Anonymous, a 12-step program that provides support and guidance in a manner similar to groups such as Alcoholics Anonymous and Narcotics Anonymous.
Debtors Anonymous turned out to be a godsend for Willie, a former chronic under-earner and debtor who lives in the Pacific Northwest and asked for his last name not to appear in this story. For years, his erratic earning patterns, high levels of credit-card debt and recurring habit of bouncing checks wreaked havoc in his personal life. In 1989, it culminated in the loss of his marriage and his home — not to mention his self-respect when he filed for bankruptcy.
“My wife was a very good woman who just got tired of it,” Willie said. “That was one of the many, many … losses I experienced because of my issues with money.”
Willie said he grew up in poverty and, as an adult, living in a constant state of crisis around money just felt normal. He now realizes that the negative feelings he harbored toward himself were anything but normal, though.
“I used to say, ‘I’m such a loser. I’m such a loser.’ It was like my mantra,” he said. “I had so much shame in my life.”
He first discovered Debtors Anonymous in 1994, and he remained associated with the group for years. But it wasn’t until three years ago — when he ran into yet another serious money crisis — that he took his involvement with the group seriously and began doing absolutely everything his fellow members encouraged him to do, including working closely with a sponsor and living by a detailed spending plan.
Today, Willie is happily remarried and earning a solid, steady income. He always has an emergency fund set aside so he doesn’t have to return to that chaotic state of crisis again.
“Last year, I had a bridge put in and a crown, and even though I had really good dental coverage, it still cost me $5,000. I was able to pay for it,” Willie said. “Before, I would have been really stressed out and would have felt a lot of fear. But this time it didn’t affect my spending plan, and I didn’t have to give up my vacation or anything like that. I was prepared for it.”
At a recent Debtors Anonymous meeting in the Seattle area, nearly a dozen people gathered in a comfortable, cheery side room at a Lutheran church. They sat on leather couches and cushioned chairs, and some brought knitting projects and snacks along with them.
The night’s discussion turned again and again to vagueness — about how tempting it was for pretty much everyone in the room to remain deliberately unclear about their true money situations.
“I’m Stacy, and I’m a recovering debtor,” a woman in the group ventured.
“Hi, Stacy,” the rest of the group replied.
“When I feel anxious, I don’t want to track my spending,” Stacy confessed. “I don’t want to know.”
“Vagueness — boy, do I relate to that,” one man said when it was his turn to share his story. “Over my life, I’ve just been living paycheck to paycheck, not making enough to thrive, not enough to buy clothes — except maybe from Value Village (a nearby thrift store). … I’ve been really good about tracking my numbers, but a spending plan? I haven’t really gone there.”
Other confessions emerged as the evening went on. A woman named Jean who’s saddled with about $20,000 in debt and relies on the bus for transportation admitted that she took a taxi three times in the past two weeks — possibly because of a time management problem.
Another woman opened up about her impulsiveness. “I want what I want when I want it. I know I need to change that.”
A man named Mike said he’s struggling with so much debt that he sometimes finds it difficult to buy food. He talked about a recent dark day: He had received a letter notifying him of his need to pay nearly $700 more a month in child support to the mother of a child he never sees.
The letter sent him into a tailspin. And what did he do? He went out to the store and bought a power drill. He completed a quick project at home with the drill — and then felt so guilty about the purchase that he returned it.
Near the end of the meeting, a young woman who’s new to the group talked about the bind she’s in. A year ago, she sold a house that she had bought in 2004 and made good money in the process — so much so that she didn’t have to work and she was able to spend more time with her daughter.
“I had more money than I ever dreamed of in my account,” she said. “I had this grand plan of how I was going to live … and it could have worked if I wasn’t such a compulsive spender.”
She said had just finished pulling her financial details together and felt “shocked” by how much debt she had accumulated. Her windfall from the house was gone, and even though she was thrilled that she had just landed a job, she knew she wouldn’t see her first paycheck for at least two weeks. Her cell-phone bill was due the next day. How was she going to pay it?
She also was feeling guilty about taking her two cats to the vet the other day without being able to pay for the care they received. She had told the vet up front about her inability to pay, and she was assured that she could cover her bill later. It turns out that her cats had pneumonia and really needed the care — but it also meant that she had taken on yet more unsecured debt, something she had promised herself to stop doing. And when was she going to be able to pay the vet back?
“I’m freaking out right now,” she said. “Quietly, inside my head, I’m freaking out.”
At the end of the meeting, two women spoke with the new, stressed-out member and gave her some tips. What could she sell in her house for cash? Books? What else? Could she call the cell phone company, explain her circumstances and set up a payment plan?
As for the unsecured debt incurred at the veterinarian, maybe she could give the vet some form of collateral, such as a valuable vase or another nice object from her home. That way it would become secured debt instead of unsecured debt.
“Wow. That’s a really good idea,” the woman said. “Seriously, thank you so much for that. I’m so glad I came tonight.”