Financial problems come and go, but if you are stuck in a never-ending cycle of indebtedness, regardless of increases in income and other changes in your financial situation, you may be addicted to debt. If so, you can’t fix it on your own—you’ll need professional help. It starts with facing the signs of debt addiction.
However, while most of us will admit to struggling with debt at one time or another, very few, unless forced to by a major financial crisis—and often not even then—will admit to being actually addicted to debt. In fact, when we are being crushed by debt, we tend to view it as something or somebody else’s fault (my spouse, my kids, the economy), not a result of our own choices. But the question remains: are you a compulsive debtor?
Here are some of the classic signs of debt addiction:
Worrying about debts keeps you awake a night or interferes with your work and life during the day.
You dodge calls from creditors or other people you owe money to.
Using a credit card to pay for a purchase is a game of Russian roulette, with you never being sure if the charge will be authorized and nervously reviewing whether one of the other cards in your wallet or purse will work if the one you’ve used is rejected. And even if it goes through, you have no idea where you will get the money from to pay the credit card bill when the charges hit.
The above are all signs of the helplessness and lack of control common to all addictions, including to debt-creating behavior.
You often use credit as a substitute for cash you don’t have to cover basic household expenses such a rent, utilities and food. Essentially, you’re taking out a loan to cover costs that should be financed by your income.
You avoid facing the truth of your financial situation. You won’t open the mail or balance your check book. You don’t know, and don’t want to know, the total of how much you owe, who you owe it to or what penalties and fees are accruing.
You engage in so-called “retail therapy” (also known as shopping), eat, drink, or get high to escape the stress of debt and forget your money problems. Of course, as with any attempt to self-medicate an addiction, it only makes matters worse, intensifying the cycle of financial self-destruction.
You spend lavishly and often, comforting yourself with the notion that you’ll get rid of your debt and focus on saving when you make more money, get that big bonus or finally hit the lottery. Someday.
You are constantly borrowing money from friends and relatives—often to make payments on money you owe to other friends and relatives.
You hide or lie to friends and family members, including your spouse or partner, about purchases you’ve made.
You can’t pay your taxes. You don’t save to pay them and you never have any money left over to meet your obligations when they come due.
Surviving a crisis does not change your habit. Sometimes, the prayer for windfall does come through—an unexpected bonus at work, a major cash bailout from a relative, a chance to make extra money on the weekends. You’re able to avoid that bankruptcy or losing your home to foreclosure. But you don’t see that as a chance to get rid of your debt, put away some savings, and get a fresh start. No, it’s time to spend all of the unexpected income and then some celebrating (see self-medication activities, above) your good fortune, often with lavish gifts and entertainment for family and friends. When the money runs out, you’re right back were you started before you got it—or in an even deeper hole.
Because it is a socially acceptable addiction, compulsive debt creation often not only goes untreated, but is actually encouraged, especially in an economy with an engine fueled by consumer spending. However, debt addiction is serious, and can be just as destructive to individuals, families and communities as any other addiction, so it’s important that we recognize and deal with it when we see it, especially if we see it in the mirror.
This brings me to what I believe is the number one sign of debt addiction:
Denial, typically characterized by an absolute refusal to seek professional help even when the person’s financial health and their family’s stability is threatened by their compulsive spending and debt habit. I personally know of cases where once law-abiding, educated, responsible (and yes, even religious) people turned to criminal activity to deal with their debt, rather than getting the help they need to break the debt accumulation cycle.
If this is you or someone you know, please, for your sake and those who care about and depend on you, get the professional help you need. If you don’t really have a problem, you have nothing to lose. If you do, you could lose everything if you don’t take action.
Set up an appointment today with a certified credit counselor via the National Foundation for Credit Counseling at DebtAdvice.org. Also, identify and join a local chapter of Debtors Anonymous at DebtorsAnonymous.org. Whatever you do, don’t remain in a state of denial.