Recognizing the Signs of a Money Disorder

If you have a chronic problem with your finances, money brings more pain than pleasure, and it’s affecting all areas of your life, you have an issue that needs to be addressed. In some cases, a severe problem with money could even be a disorder. Financial psychologists Brad Klontz and Sally Palain weigh in.

“You know your financial problem is crossing over into a money disorder based on how long the problem lasts, the severity, and whether the problem is affecting all aspects of your life,” says Sally Palain, a licensed psychologist and author of the book Spent: Break the Buying Obsession and Discover Your True Worth ($14.95; Hazelden). “It’s a red flag if you’re making promises you can’t keep or being dishonest about what you’re doing with your money,” she continues.

“There must be clinically significant impairment in one or more areas of your life. So you might have significant problems in relationships, at work, and in your physical and emotional health. This isn’t the gambler who gambles a lot but has no problem in their relationships or other life areas. If you have a gambling disorder, then when you’re at work you’re distracted. You may even be gambling online during work hours. Or you may have legal problems because you’re stealing to feed your spending habits,” says Brad Klontz, a financial psychologist and certified financial planner.

Entrepreneur Daphne Mellody says financial hoarding affected her personally and professionally. She and her soon-to-be ex-husband’s conflicting views on money put strain on their marriage. In addition, Mellody says her fear of spending kept her from hiring a strategic consultant for her public-speaking business. Consequently, she lost out on book deal and a $300,000 advance.

“There were aspects of my public platform that were missing. In addition, my knowledge and expertise weren’t sufficient. I was buying books instead of enrolling in training classes to learn how to run my business. I was being stingy. I did not have the right strategy because I did not invest in someone who could assist me.”

Klontz says people with money disorders have extreme difficulty controlling their behavior, mostly due to the positive reinforcement that accompanies the act. “There’s a chemical release in the brain that gives pleasure when engaged in the activity. You go through withdrawal and then you feel guilt when the activity ends. This then leads to another cycle of misbehavior,” says Klontz.

Stay tuned for part two of this article.