Full access to Entrepreneur for $5
Subscribe

Fear of Losing Money — or Worse? Money Disorders Are a Thing, and You're Not Alone

Do you suspect that a friend, family member or you might have a money disorder? Take a look at what it means to have a money disorder and how to get h...

By
This story originally appeared on MarketBeat

I know a friend of a friend who grew up poor. Now that she has money, she invests like crazy. She can't get enough of investing in the stock market because she knows it's her "ticket to wealth." My friend once asked her, "How much of your money do you invest every month?" 

She answered, "About 90%. I barely had enough money for groceries last month!" (She said this proudly.) She denies herself any opportunity to enjoy hardly any of her money and gets extremely anxious every time the stock market dips.

When money mistakes compound, persist and result in self-destructive financial behavior, you or a loved one may have a money disorder.

The pandemic may exacerbate these concerns (particularly if you or a loved one has an issue with job loss or another money downfall). This is a tough subject, but it's worth talking about, especially in the wake of pandemic-induced losses. 

What is a Money Disorder?

Money disorders result in extreme financial behaviors due to an emotional problem with money. 

How do they begin? With financial flashpoints, according to Psychology Today — painful, distressing, and/or dramatic life events are associated with money. These end up being so emotionally powerful that they leave a lasting imprint on your psyche and usually originate in childhood, though not always.

I always think of Suze Orman's childhood example in this context. Her dad owned a chicken shack that caught on fire when Orman was about 13. He got out of the shack unharmed but realized that all their money was in the cash register. He picked up the burning metal box and carried it out, burning his hands, arms, and chest. He had escaped the fire, then risked his life and came out severely injured. Young Orman learned that money was more important than life itself. (Talk about lasting imprints!) By the way, I'm not saying Orman has a money disorder. At all.

What are your financial flashpoints? Identifying your money beliefs and changing them to become healthier can lead to fewer self-destructive behaviors and sidestep emotional distress, anxiety and destructive relationships. 

If you have trouble changing your behaviors, feel ashamed of your behaviors or hide them from others (or know loved ones who do) you (or your loved one) might want to take a look at this list of money disorders.

Types of Money Disorders

You can't point to just one type of money disorder. In fact, you might see money disorders take shape in a number of different ways. Take a look at the following: 

  • Money avoidance: Do you know someone who views money as the root of all evil and avoids talking about it? This type of relationship with money might result from negative emotions or painful past events. 
  • Financial denial: Do you burn your credit card statements or shove them to the back of your sock drawer? Do you suspect a loved one relies on margin too much when trading and seems to avoid the problem? Sometimes those in deep financial trouble prefer to stick their heads in the sand. 
  • Financial rejection: Financial rejection occurs when you feel guilt upon having a little money or owing someone money. 
  • Money worship: Do you feel that having more money will make you happier? Money worshippers do everything they can to earn more and more. Individuals suffering from this money disorder often work excessively long hours and don't leave time for their families or rest, despite the fact that they might have plenty of money. It can lead to other psychological conditions. 
  • Financial enabling: You may see this situation with loved ones who support adult children, though those children should support themselves financially. Financial enabling may also involve giving money to others whether you have the money for it or not. 
  • Extreme underspending: Piling up savings and not allowing yourself to enjoy your money can signal a money disorder, particularly if you get anxious when your savings dip below a certain threshold.
  • Excessive overspending: Do you put you or your family's finances at risk in pursuit of shaky gains? You or a loved one may end up with major debt and have to declare bankruptcy. 

This isn't a comprehensive list — money disorders can form in other ways, too (money hoarding, etc.) However, you may recognize other symptoms in yourself or a loved one and want to seek help.

How to Treat a Money Disorder

While these descriptions may sound bleak, the good news is that you can treat a money disorder. Take the following steps if you suspect that you or a loved one might have a money disorder.

Step 1: Recognize the problem. 

Naturally, it's much better if the person in question recognizes that he or she needs help. It's much harder to convince someone that he or she needs help if "it's just a little money trouble." You can also take a few steps to approach them yourself:

  • Indicate that you need to have an important conversation together.
  • Pick a time and place. 
  • Use empathetic language when you talk to your loved one.
  • Try not to get defensive if this person gets upset.
  • Use "I" statements in your conversation, such as, "I'm concerned about your money habits."

You may prefer to get guidance from a professional on how to approach a loved one who needs help.

Step 2 (Option 1): Get a financial planner to help. 

For those with less serious money disorders, you may be able to get a financial planner to shed light on the positive and negative tactics of investing your money. A registered fiduciary financial advisor can help you or a loved one see sense where you or your loved one might not be able to. 

Step 2 (Option 2): Obtain treatment by a psychologist. 

Some individuals may need to seek counseling. Some may work together in conjunction with a financial planner. This type of counseling may not be from a psychologist who specializes in money disorders but can address specific compulsive or unhealthy behaviors. 

Step 2 (Option 3): Money Rehab

If you or a loved one has a really serious money disorder, you may need to go to a money rehabilitation facility. Similar to clinics that treat gambling and drug addiction, money rehab offers a comprehensive treatment option that explores the underlying reasons for money disorders and addresses behaviors that result from them.

Get Help if Needed

Money disorders may not seem "as severe" as alcohol or gambling dependencies, but it can still affect relationships, cause major stress and introduce other psychological problems. 

In fact, money disorders don't get the attention they deserve. You may not even realize that this type of disorder exists because they don't get as much press as other types of addictions! Take steps to get financial therapy for yourself, a friend or loved one in your area. 

Featured Article: What does an equal weight rating mean?