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Opinion | Are you a hoarder or a compulsive spender? You have a money disorder

Money disorders are prevalent in everyone—from the very poor to the very rich

About three years ago, I was having an intense discussion with a money psychologist from the US, who is also a financial adviser. That meeting gave me another perspective on how to manage clients. It was then when I started to observe money behaviours in my clients. I noticed that as a result of distorted beliefs about money that they may have developed from their life experience, some of them were showing the patterns of self-destructive behaviour or money disorders.

The interesting, and unfortunate, thing regarding money disorders is that they are more common than we would like to believe—prevalent in everyone, from the extremely poor to very wealthy. For the uninitiated, having a money disorder is a psychological state, wherein our belief patterns and attitude towards money is fundamentally flawed.

It is important to note that the problem isn’t money; it’s just that the symptoms of these disorders have money at their focal point. This is precisely why the solution for these disorders that deal with just money don’t often work. When we are faced with the symptoms of “money disorders" such as stacked up bills, collection agency calls or wanting things out of our budget, we start craving for more money, hoping it will be the solution to all our problems. However, that is seldom the case. These addictive cycles can form a continuous spiral, and keep you obsessing with money, and even lead to debt and depression.

Let’s look at three common money disorders. For all you know, you may be suffering from one of them.

Stocking up cash or valued objects: This is also called hoarding. It happens when you tend to stockpile money or objects in order to feel a sense of security while relieving anxiety. It can be seen as an exaggeration of an otherwise positive behaviour—saving—taken to the extreme. Some people hoard money, while others compulsively hoard objects of their interest—jewellery, gold bars and coins, unaccounted cash, etc.

Hoarding isn’t about buying or spending, but about stacking up objects. Hoarders tend to feel a sense of completeness as these objects become stand-ins for what’s missing in their lives and develop a strong emotional meaning. While there may be a genetic component involved, most hoarders tend to have a history of childhood deprivation, abandonment, or even betrayal. Imagine the trauma that “hoarders" went through during demonetization when they were made to part with their hoarded money.

Compulsive spending: This is by far the most easily recognizable money disorders. When you are spending a significant portion of your income on discretionary purchases, continually spending despite resolutions to stop, upgrading your gadgets despite not having the need, being more excited about making the purchases than owning the items, not using everything you purchase, buying a large number of things you do not need, feeling excited while shopping, feeling like the next big purchase is the one that will really improve your life, then you are a compulsive spender who needs a corrective behaviour therapy. Compulsive spenders spend to manage unpleasant emotions such as depression, anxiety or low self-esteem. For compulsive spenders, retail therapy is the primary or only means of coping with stress.

A person suffering from this forgets the thin line between spending and overspending. Just like hoarders, overspenders, too, often seek feelings of safety, comfort, affection and wholeness from their habit.

Being a financial care-giver: Also called financial enablers, they are those who give money in a way that keeps the receiver from having to take responsibility or become independent. They have a sense of guilt (or shame) over their wealthy financial position in life as compared to their children or even the extended family. They could be carrying guilt or shame for not being a better parent in the past. Unconsciously they may use money as an attempt to make up for the mistakes made in the past. They may enjoy others being dependent on them. So they start to become “financial care-givers". They feel compelled to intervene and bail others out of their financial responsibilities. Many parents in our country are keen to help their adult children as opposed to empowering them to deal with their financial woes. Many families are keen to help their extended families to stay socially connected for their self-esteem and confidence, as opposed to supporting them intellectually.

There’s always a justifiable reason for you to stay stuck in any of these behaviours. If you feel you’re suffering from any of these disorders, choose a financial confidant, who is trustworthy, non-judgmental, compassionate and has the ability to listen without offering advice. You can also get professional help from your money coach, or counsellor and find happiness in your relationship with money.

Amit Kukreja is a registered investment adviser and founder,

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