Let’s face it: most of us struggle with finances. Dealing with our money is a confusing thing. It’s often fraught with emotion. Even when we have significant knowledge about personal finance, sometimes we get overwhelmed by the reality of our money. Problems can crop up in so many ways. For example, we may be great at budgeting but find it challenging to talk to our family members about money. However, for some people, those challenges rise to the level of a money disorder.
What is a Money Disorder?
Dr. Brad Klontz has co-authored a book called “Mind Over Money: Overcoming the Money Disorders that Threaten Our Financial Health.” In this book, he explains that a money disorder is a destructive pattern of thoughts, emotions, and actions that relate to money. They are distorted beliefs about money. They undermine us, causing behavior that limits or sabotages us financially.
Financial Flashpoints May Cause Money Disorders
Klontz argues that “financial flashpoints” are at the root of these disorders. He says,
“Financial flashpoints are painful, distressing, and/or dramatic life events associated with money that are so emotionally powerful, they leave an imprint that lasts into adulthood.”
In some cases, the flashpoint may be a single traumatic event. For example, if your family experienced a sudden job loss that caused the financial crisis and left you homeless, then that might be your financial flashpoint. However, the flashpoint can also be a more persistent situation as well as one that’s subtler.
For example, if you grew up internalizing certain unhelpful messages about money (such as “money is the root of all evil”) then that could be your flashpoint. This understanding is similar to other types of trauma. For example, someone may develop PTSD because of a single violent event such as a rape while someone else may experience PTSD as a result of chronic insidious mental abuse.
Similarly, we can develop money disorders for different reasons. Furthermore, we may not immediately recognize their root cause.
Types of Money Disorders
In his book, Klontz outlines three broad types of money disorders. There are different types of specific problems that fall under each category.
1. Disorders of Worshipping Money
These types of money disorders related to people who have self-destructive behaviors related to earning and spending money. Specific money disorders in this category include:
- Compulsive shopping
It’s important to note that there is some crossover between other mental health issues and money disorders. For example, hoarding may be more about an anxiety issue than a money disorder. Likewise, gambling may be more about addiction than specifically about money. A professional can help you work through these nuances.
2. Disorders of Avoiding Money
Some people obsess over money whereas others want to avoid it entirely. For example, one subcategory here is “financial denial.” If you’re the kind of person who never knows how much money you have in the bank or what you owe on loans then you might struggle with financial denial.
Financial rejection is another subcategory of avoidant money disorders. This is an emotional reaction toward acquiring money. If you feel guilt whenever you earn or save money then you might be dealing with this type of avoidance issue.
Chronic underspending and excessive aversion to financial risk are also disorders related to avoiding money.
3. Relational Money Disorders
Many of us struggle to connect with others when it comes to money. Think about it – how many of the fights in a marriage are about finances? However, this can rise to the level of a money disorder. Sub categories include:
- Financial dependence, which means leaving our finances up to someone else instead of dealing with them ourselves
- Financial enabling, such as when a parent continues supporting an adult child even though the parent can’t afford to do so. Notably, the financial dependent is often in a relationship with the financial enabler.
- Financial incest, which relates to manipulation and emotional abuse related to finances (typically in a parent-child relationship)
- Financial infidelity, which has to do with lying to your partner about spending
In other words, these problems aren’t just general fights about money. Many people disagree over money. Most of us struggle at least a little bit to talk properly about money. However, when it rises to the level of emotional abuse, lying, or destructive behavior to or from another person then it may be a money disorder.
Do You Have a Money Disorder?
Most of us have financial challenges in the “normal” range. However, “normal” is a tricky word. Just like with mental health, there’s not a “right” and “wrong” but rather there is a spectrum.
For example, each of us has experienced some kind of sadness or grief that in the moment could look a lot like depression. Then there are people who live with ongoing life-threatening depression. A large number of people live somewhere in the middle, dealing with shorter bouts of depression during their lifetime. These things are each different. They can’t be treated the same. However, they exist on a spectrum and we can all learn from the lessons at each part of the spectrum.
Similarly, some people have very serious money disorders. Some people are perfectly comfortable with all aspects of their finances. Most of us exist somewhere in the middle. We can all learn from the lessons at any part of the spectrum. That said, if you feel that you do truly have a money disorder, it’s important and okay to ask for help.
How to Get Help for a Money Disorder
There are therapists available who specialize in helping people who are struggling with financial issues. Whether or not you want to use the term “financial flashpoints” the experiences we’ve had with money in the past can definitely negatively shape our experiences with money in the present time. Working through your beliefs, fears, and history around money can help you improve not only your feelings about finances but the status of your wealth as well.