Balancing_BudgetToday we often hear about debt and compulsive spenders. But how much do we really know about these potential problems in today’s society? Yes, we know that our government is out of control when it comes to spending, but what about everyday Americans?  Are we compulsive spenders? What kind of people get into debt and can’t seem to stop this urge to spend? Finally, what can be done about it?

Two to eight percent of the US population is estimated to be compulsive spenders. There are many things that can trigger such actions. In an article entitled, “Compulsive Spending Often debilitating,” Randy Frost, a professor of psychology at Smith College, states that sales, discounts, two-for-one incentives, and cable television shopping programs can often be challenges that people labeled compulsive spenders cannot overcome. In his words, “Compulsive shoppers struggle particularly when confronted with items that they know to be good bargains.” Since compulsive spenders are inundated with shopping items and prices, they probably have a vast enough knowledge to know when they see a good bargain. Therefore, when these good deals come about, compulsive spenders “struggle.” Of course, it may be inferred that since compulsive spenders may live for such deals they probably have a way of finding them, and depending on their efforts, one wouldn’t think it’s too hard to find such bargains often, maybe even daily. You can see the dangerous cycle compulsive spenders can find themselves in. (USA Today Magazine, p.5)

Such spending habits also seem to be heightened during holiday seasons. Maybe this could be because more people are shopping in more uncontrollable ways. With such logic, it would seem that compulsive spenders may use these holiday opportunities as justification for their actions. In other times during the year, they may try to suppress their compulsive spending habits, although maybe to no avail, but during holiday times they may use reasoning such as, “Everybody’s doing it, so why can’t I.” At this point, please don’t make the mistake that ordinary shopping habits are the same as compulsive spending. They are not. “Ordinary holiday shopping, while typically concentrated and time-consuming, is not the same as compulsive buying, Frost emphasizes, unless it manifests some of the disorders key diagnostic qualities. Compulsive shopping is ‘excessive, uncontrollable, time-consuming, and repetitive and causes marked emotional distress and financial difficulty.'” While not much research has been done on compulsive spending, a few things are known. To date, most research has been done on the economic effects of compulsive spending. However, we will look deeper than this issue. We will look into some possible psychological and social effects. The article mentioned above puts these thoughts this way, “Compulsive shoppers may find themselves, over time, isolated, estranged from family and friends, and fearful of social situations. ‘In a consumer society such as ours,’ Frost concludes, ‘an inability to resist purchasing messages can have serious and devastating effects.'” This is what needs more attention, so this is what we will attempt to focus on. (USA Today Magazine, p. 5)

First, let’s take a look at who comprises the majority of compulsive spenders. According to Donald Black, a psychiatrist and a professor of psychiatry at the University of Iowa, in an article entitled, “Slaves to the Sale,” he states that: “Between 2% and 8% of adults in the U.S. are compulsive shoppers (most of them women), for whom spending money delivers an intoxicating rush (Burn & Siskos, p. 108). He goes on to describe these compulsive spenders as people who shop alone several times a week and usually for hours at a time. He says they are out to get their fix and when they do their mood crashes, then guilt or shame usually sets in. You can see the similarities between this addiction and other addictions. On another note, Ron Gallen, a financial counselor and author of The Money Trap, describes this behavior as “‘shopping bulimia’-but most try to hide their purchases from family and friends and repeat the cycle every few days. ‘The solution, which is to shop less, is obvious to some addicts,’ says Gallen, ‘but they can’t do it because they’re acting from a deeper need'” (Burn & Siskos, p. 108). This “deeper need” as Gallen calls it, is something we will explore later. In addition, April Benson, a psychologist and editor of I Shop, Therefore I Am: Compulsive Buying arid the Search for Self, proclaims that, “women feed their addiction by buying clothes, shoes, purses and perfume, men tend to splurge on computers, electronics, power tools and even investments. They shop for all sorts of reasons: to build self-esteem, relieve stress or ease depression” (Burn & Siskos, p. 108). Compulsive spending is finally beginning to be looked at and treated like other addiction. Also, compulsive spending often escalates over time like other addictions. According to the Burn and Siskos, “By the time shopping addicts reach their late thirties or early forties (the age at which most seek help), years of accumulating debt has created a crushing burden.” Mike, a member of the board of trustees for Debtors Anonymous, exclaims “It’s not unusual for us to see someone with $250,000 of debt and a $40,000 annual salary. They’re so overwhelmed with debt that they’re almost suicidal.” Furthermore, to really nail down the demographic of compulsive spenders, let’s see what a few others think. (Burn & Siskos, p. 108)

According to Jacyln Fierman, in an article titled “Saving the Spendoholics,” one of these groups that comprise a chunk of the spendoholic crowd is baby-boomers. She states, “They are the ones who turn up most often at the nation’s 1,100 offices of the Consumer Credit Counseling Service, a nonprofit organization that helps people construct a budget they can live with and negotiate a feasible payment plan with creditors.” To further make her case, she says, “Baby-boomers also dominate the ranks of debtors who choose the path of last resort: bankruptcy.” Furthermore, University of Texas law professor Jay Westbrook, who co-authored a study of 2,300 people who filed for bankruptcy in the early Nineties, described compulsive spenders this way: “They’re not blue-collar workers. They’re well-educated, middle-class boomers who got carried away with their credit cards.” In addition, from the mouth of a former compulsive spender himself, he summarizes his kind in the following: “”Why did I do it? My current wife would blame it on my first wife. There was something in our relationship about wanting to have things. We wanted to travel and furnish our home, and as long as we could charge it, we thought, ‘Let’s do it.’ I wanted her to be happy.” Fierman calls them the “me-generation.” Finally, a Cincinnati psychiatrist named Susan McElroy, who has successfully treated shopaholics with antidepressants like Prozac says: “These people are self-medicating their depression by spending compulsively. I’m merely replacing their medication with something better–and cheaper.” With these things in mind, the consequences of compulsive spending are becoming self-evident. (Frierman, p. 56)

Now, let’s dive even deeper with a case study conducted on a woman named, April. Evidence of her compulsive spending addiction lay around her house. Clothes with tags still on them, no spare room to set anything down, and catalogs piled up characterize this lady’s living quarters. However, this evidence was nothing compared to he credit card bill. While not even able to pay the minimum payments, her spending frenzy continued. Her husband tried all he knew how to get her some help, but not much seemed to work. This no doubt caused friction between them. Then in a desperate attempt to keep funding her ludicrous habit, April began embezzling money from her employer. All in all she stole about 50,000 dollars. In the end, she was arrested. As you can see, the plot is thickening. The effects of compulsive spending go far beyond economic issues. (Burn & Siskos, p.108)

April grew up as a perfectionist and she battled alcoholism, and she eventually was diagnosed with obsessive-compulsive disorder. She attributes her compulsive spending behavior to an unpleasant childhood, in which money was tight. She describes this portion of her life as, being “shunted from one relative to the next after her mother abandoned her and her two younger sisters.” At 16 she began supporting herself financially, and she describes her life as “Every payday meant a new outfit and purse, because growing up I never had anything new.” Interestingly enough, before marriage April earned $60,000 a year as a project secretary for an engineering firm. However, despite being well above the poverty line she said, “Most of the time I was broke.” Regarding April’s actions, Gallen, whom we mentioned previously, informs us that “Such addictive behavior is usually an attempt to soothe ‘whatever is hurting inside you,’ and often that hurt stems from childhood events.” April affirms this notion because she feels “shopping for material things helped her bury her anguish and resentment at being abandoned.” Although, with April it didn’t stop with herself, as she also spent large amounts of money on family and friends. She states, “Part of my compulsion to shop was wanting to give my kids more than I had.” Soon because of the outstanding debt and trouble facing her family, April’s husband began attempting to intervene. However, April just became more secretive with her addiction. Does this sound like any other addictions you know of?

As you remember from earlier, April ended up in jail because she started embezzling money to feed her addiction. But the consequences continue. While her family stuck by her, the town she lived in did not. She was banished from her son’s school for stealing money from the parent-teacher organization, and the local town newspaper negatively splashed her name all around. Marital problems undoubtedly play a negative role in the family, and bitterness and depression tend to set in from time to time as well. It is obvious that this addiction like others is not worth it, but although the addicted individual may want to stop, they often cannot without professional help. Of course, drastic and dire life circumstances can help do the trick too. (Burn & Siskos, p. 108)

Treatment for compulsive spenders is finally starting to come around. Most tend to favor an eclectic view incorporating financial and psychological aspects. Of course, the first thing people often do is cut up the credit cards. However, this is generally just a temporary fix – like a Band-Aid. Also, credit counseling can be helpful, but it often just focuses on the problem of debt and doesn’t really get into the underlying cause, which is usually psychological. On the other hand, psychiatric treatment alone may help with emotional issues surrounding the addiction but won’t address the financial issues. With these things in mind, many organizations are beginning to treat both of these important aspects of compulsive spending. Specifically, one treatment technique is to have shopoholics keep a spending diary, so when they look back and notice an outrageously expensive item or spending spree, they can hopefully remember what may have caused their behavior at this particular moment. Karen McCall, who runs the Financial Recovery Institute, says “We try to help people make the connection, so that next time something triggers that behavior, they can recognize it and cope with it differently” (p. 108). As you may have guessed, with the maybe surprising similarities between this addiction and others, a 12-step program like Alcoholics Anonymous, called Debtors Anonymous, has recently come into existence and is considered one of the premiere treatment programs for compulsive spenders. Finally, some, like April, choose to see therapists specializing in obsessive-compulsive disorder. Incorporating the help of family and friends can typically always be beneficial as well. In April’s case, her husband now handles all financial matters, and her children keep their eye on her. (Burn & Siskos)

With April’s case possibly being associated with obsessive-compulsive disorder, let’s now continue to explore this possibility and other etiologies. According to Ullman and Krasner 1969, “A behavior is considered compulsive when it results from compelling impulses or urges and is inappropriate or disruptive” (Faber, Guinn, Scott, p.132). On the other hand, the American Psychiatric Association states, “If there is ‘pleasure, gratification or release at the time of committing the act,’ the behavior would Instead be termed ‘a disorder of impulse control'” (Faber, Guinn, Scott, p.133). As with many other addictions, there are biological, psychological, and social causes that contribute to the addiction. The same is true with compulsive spending. Biological theories of course claim that genetics plays a role in the development of a compulsive spending addiction. On another note, according to Faber, Guinn, and Scott in their study, “Compulsive Consumption, “psychological theories and models suggest that compulsive behaviors relieve stress experienced by the individual from pressure to perform or succeed at tasks or caused by low self-esteem” (p. 134). And finally they conclude, “Sociological models suggest that compulsive behaviors stem from peer pressure or from beliefs about cultural norms” (p.134). In this same study, it was also found, among the participants researched, that a high propensity of them tend to be thrill seekers – whether it’s fast or reckless driving or more extreme activities like parachuting. Last but not least, advertising and media may play a role in the development of compulsive spending addiction. At this point, not much research has been done on this specific topic, or any etiologies for that matter, but without much doubt we would have to suggest that, if not an underlying cause of compulsive spending, advertising and media have to play a part in the progression of this addiction. We might suggest that all of the above have a part to play in either the onset, development, or continuation of compulsive spending addiction. (Faber, Guinn, Scott)

For those interested in further studying compulsive spending addiction, there is a lot more to be researched. Let’s look at some questions from an article titled, “Beneath the Surface: the Psychological Side of Spending Behaviors.” The authors of this article proposed four such questions in hopes of inspiring further research on compulsive spending addiction. The first, “How and where do spending behaviors develop,?” we have already looked at to a small degree; however, much more needs to be done in this category (Carrier & Maurice, p. 98). Another motivating inquiry they mention is, “What types of social environments and cultural conditioning promote different types of spending behaviors?” (p. 98). With this in mind, the first thing that comes to mind is advertising and the mass media. The role these two play is large and needs to be seriously studied. We all know that advertisers seek out psychologist and sociologist as to how to best manipulate, motivate, or guide people to buying their product. It would be interesting to know how such advertising affects compulsive spenders as compared to normal spenders. In addition, these authors also propose the following inquiry: “How can education be used to overcome many of our culture’s double and mixed messages about money?” (p. 98). This is also an interesting proposal for research. If you remember the large drug push in the 1980’s and 1990’s, “Say No to Drugs,” you will know that this was strongly pushed through the education program. At certain points, it did have some significant effects. Closer to home, smoking as been becoming more and more taboo in recent years through educational efforts and the mass media. Today smoking users are way down per capita than they were ten years ago. These efforts have definitely had some extremely significant effects. And most recently there have been some terrifying methamphetamine commercials, showing people the scary realities of methamphetamine use. With this we will have to see, but if it follows the trend then we should see some positive effects sometime in the not too distant future. All in all, the use of educational efforts to reduce compulsive spending should definitely be researched. Furthermore, these authors propose the question, “What specific interventions can be used to help people with spending problems?” (p. 98). Earlier we briefly mentioned Debtors Anonymous, which have proven to be helpful because the accountability and presence of a support group can be very powerful. Also, psychological therapy can be beneficial as well because with this one can often get to the underlying problem of their spending addiction, such as in the case study we looked at earlier. On another note, family systems can be an enormous help or detriment to a compulsive spender’s life. If a family enables the spending addiction then obviously this will ultimately be a detriment, but if a family works together to extinguish the addiction and empower the spending oppressed individual then such a system will ultimately be highly beneficial. Finally, the last question proposed is, “What are the long-term impacts of spending problems for families from generation to generation?” (p. 98). Is there a biological component? Of course, biological theorist would say the answer to this is an emphatic, “Yes!” But while at face value this may seem true, there has hardly been any hard evidence produced to prove such a claim. One thing that has been documented more is the short-term effects of compulsive spending. Debt can sometimes seem like an insurmountable problem to overcome. It can also cause tremendous stress in families. It has been reported that financial issues between couples often results in conflict and even separation or divorce. And from these latter two acts many other problems often arise. Therefore, the effects of compulsive spending can be various and enormous. More research should be conducted on such serious effects. There is a lot more to be learned about compulsive spending. Even now, scientists, researchers, psychologists, and sociologists are only beginning to scratch the surface of this compulsion. And with it so heavily effecting our economy, and the fact that more and more people are becoming addicted to spending in some way (i.e. goverment); we should hope and pray that this issue becomes more serious in the public and scholarly eye than it has been. (Carrie, L. & Maurice, D.)

Are you or have you ever been a compulsive spender?  If so, why? Do you know of a compulsive spender?  If so, what motivates them, and were they able to get help?

Feedback, Questions

References

Burt, E., & Siskos, C. (2002, November). SLAVES TO THE SALE. Kiplinger’s Personal Finance, 56(11), 108. Retrieved May 31, 2009, from Academic Search Premier database.

Carrier, L., & Maurice, D. (1998, February). Beneath the Surface: the Psychological Side of Spending Behaviors. Journal of Financial Planning, 11(1), 94-98. Retrieved May 31, 2009, from Business Source Premier database.

Compulsive Spending in Younger Generations. (2004, March). Futurist, Retrieved May 31, 2009, from Academic Search Premier database.

Compulsive Spending Often Debilitating. (2004, December). USA Today Magazine, Retrieved May 31, 2009, from Academic Search Premier database.

Faber, R., O’Guinn, T., & Krych, R. (1987, January). COMPULSIVE CONSUMPTION. Advances in Consumer Research, 14(1), 132-135. Retrieved May 31, 2009, from Business Source Premier database.

Fierman, J. (1995, July 24). Saving the spendaholics. (Cover story). Fortune, 132(2), 56-56. Retrieved May 31, 2009, from Academic Search Premier database.