Spending Addiction - it affects nearly all of us

Many people have a spending addiction. In a general sense, it's a problem all across America, and it can be seen every day on billboards, in magazines, and on the TV. If we weren't susceptible to spending money, we wouldn't have so much advertising encouraging the same.

Often our addiction to spending money is tied to our low self-esteem, and that affects our ability to engage in frugal living.

We often spend money to make ourselves feel better.

Spending money can lift our morale temporarily by making us feel affluent. It's much like a drug - we keep feeding the spendaholic in us, but the good feeling doesn't last.

Being addicted to spending money can ruin your life, and it often upsets and disturbs those around you. It limits your ability to live a happy, useful and peaceful life, mainly because happiness, achievement and peace aren't ever found by spending money. (Now try telling that to a member of Congress.)

Consider these examples:

  • I know a woman that can't have any money in her pocket. Even if she has to take someone out to lunch, she'll spend her money. It can't be saved. It must be spent. She has a spending addiction.

  • A friend of mine was married to a woman who was addicted to spending money. It was a tremendous burden on him and everyone associated with the couple. He finally had to divorce her to rid himself of an irresponsible person that was legally tied around his neck.

  • Our state and federal legislatures have a spending addiction, and it's our money they are addicted to. Look at how the country and many of the states are deep in debt. It's not because we make good spending decisions!

Many of us are mild "spendaholics", but some of us are in serious trouble. The first step is to recognize the problem. Let's look at the characteristics of bad decision-making when it comes to spending money. This should help make us more alert to the problem, and hopefully keep us out of deep trouble.

See how many of these characteristics are attributable to your spending behavior. It's not so important the number of characteristics you match, but how deeply ingrained some of the characteristics are in your decision-making with respect to financial matters.

Also, a spending addiction isn't necessarily indicated by matching up with one or more of the characteristics. Nevertheless, the following are indicators that you may be wasting money with your spending decisions. I offer examples to clarify the issues of concern:

  • Recurring costs - those associated regular nights out, unread magazine subscriptions, monthly cell phone bills and all-inclusive cable TV subscriptions. They all come calling once a month or annually, and you just keep hanging onto them.

  • Increasing costs - like a credit card balance that grows ever larger because you pay only a portion of it and let the rest "ride". You're living beyond your means, but it hasn't bit you hard yet.

    Also, your lazy son that needed help with rent, and now he needs help with the cost of food and car payments. Where does it stop? Only you can decide, but you just can't decide. That's how you were roped into this situation in the first place.

  • Unnecessary - costs associated with a pickup truck used to carry the occasional sheet of plywood from the home improvement store; the money you waste cashing your check at the "money store"; the additional car that you "need" because having one car just isn't convenient; and the dock fees, license and registration fees for that fishing or recreational boat that you only use occasionally.

    Also, the chalet at the lake that you'll use only a few weeks out of the year, but you pay taxes all year long, homeowners association dues all year long, a mortgage each month, yearly property insurance, and fees for the private golf course that you don't use.

  • Obligatory - things you must pay for, like the monthly car payment for the (new or used) vehicle that was supposed to save you money with the better fuel economy. Now you realize that it's more expensive than the fuel you'll ever save by owning it.

    Also, the spouse and kids begging for new things, better stuff, and money to have fun. You feel obligated to cough up the dough, but is it the best choice in the long run? Or, should you point out that money doesn't grow on trees and people need to earn their keep?

    Remember, if people see that you have a spending addiction, they'll help you feed that addiction by finding things for you to spend money on.

  • Human tar babies - relationships that get financially stickier and stickier. You married one, you're dating one, you're good friends with one. It's all something that you could avoid by making better decisions about the "company you keep".

  • Risky - items and activities that can't be directed, and are more chance in nature. Examples include powerball, the daily lottery, and gambling. All good examples of throwing your money away on false hope.

  • Train wrecks - financial accidents just waiting to happen. These include the house you and your buddy are buying and going to fix up and "flip", and the business you bought for reselling stuff you have no experience in and no passion for.

    It also includes the over sized house you were convinced to by, and now you can't afford to furnish it. You never thought that it would cost $50,000 to furnish a house.

  • Conspicuous consumption - the excessively large house you decided to build right along the interstate so everyone could see how successful you are, and the little sports car that you paid above dealer invoice for, so you could be one of the first to have one.

Are you seeing spending addictions here? If not a spending addiction, at least no ability to say no to spending.

At some point you need to understand the value of money and change your mentality of a spending addiction to a mentality of investment for the future - your future. You need to take care of #1 or you'll never be able to take care of anyone else if needs be.

Start looking at the ways you spend money and see if you might have a spending addiction that affects your ability to engage in frugal living.

Read about one of my readers who wrote to me for help with excessive spending.

Done with Spending Addiction, take me back to Money Saving Ideas

There certainly is a broad scope of topics here at Frugal Living Freedom. When you think about it, money permeates so very many activities in our lives, therefore, being frugal encompasses a wide range of interests, from being employed to taking a vacation, and just about everything in between. Enjoy the variety, pick up some new ideas, and start making frugality a part of your signature.

I'm a big proponent of being debt-free, and I mean entirely debt-free - no mortgage payment. It's not essential for financial freedom, but you'll love the feeling once you get there. If you didn't have a rent or mortgage payment, how much more could you do for yourself with your current level of income? I suspect plenty.

If you ever hope to see an abundance of wealth, you need to plug the hole in your boat. The wealthy don't necessarily make lots of money, instead, they know how to hang onto what they make, and make it work for them.