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When it comes to personal finance, the single most influential factor to your success is how much you spend.  It affects funding long-term goals like retirement and college, it informs how much emergency savings you should have, it influences how much insurance you need, and it certainly impacts our happiness.  It’s the part of our finances we touch every single day and theoretically, it should be the part that we are most capable of controlling.  Yet, it universally remains the thing we struggle with more than anything else.

In part, this struggle is perpetuated by the culture of silence around money.  Whether we consider it inappropriate, want to avoid judgment or are simply unaware of our own tendencies, we typically don’t discuss our spending with friends and family.  That makes it tough to evaluate our spending habits and determine if the way we spend is ideal or even ‘normal’.  In the absence of a feedback loop, we’re vulnerable to feeling an outsized amount of shame for what may be very common challenges or feeling confident in behavior that might need to be tweaked.

In the spirit of creating a benchmark to assess our own habits, what follows is a spectrum of spending behavior from one extreme to another, what to do if you find yourself on either end, and what to do if you find yourself in the more likely situation of being somewhere in the middle.


Many people with healthy financial behavior may need to make shifts to spending to prioritize future goals over current wants.  While not always easy, these changes are more manageable than those required of someone with a money disorder.  Money disorders come in several varieties, but they are emotionally driven and hinder financial wellness.  The money disorder most correlated with overspending is Compulsive Buying Disorder (CBD).

CBD is an impulse-control disorder that involves an uncontrollable pre-occupation with buying and affects up to 8% of people in Western countries.  Compulsive buyers spend significant amounts of time and money shopping, though often on useless, unnecessary things.  The act of binge shopping results in a buzz or high and just like any other drug, compulsive buyers crave it and experience symptoms of withdrawal when it’s taken away.

What many of us casually refer to as retail therapy and buyer’s remorse become a vicious cycle with CBD.  Buyers chase the mood enhancement and distress relief that comes from shopping, which is quickly followed by regret and anxiety because the purchases wreak havoc on their relationships, jobs, and finances.  To recover from CBD, the act of shopping must be replaced with less destructive means of regulating emotions.  Buyers must become aware of the negative emotions that are inciting the spending behavior and learn new ways to cope with them.  Even the most earnest attempts at stopping the behavior are likely to fail without this emotional groundwork.


On the other end of the spending spectrum is extreme frugality.  Though often associated with collecting things, a hoarding disorder can cause emotional attachment and reticence to part with both possessions and money.  Financial hoarding is driven by intense anxiety around not having enough.  Accumulating money relieves that anxiety, so much so that financial hoarders can take savings to the extreme, refusing to spend on even the most basic necessities (think medical care) or things they enjoy.

While it’s easy to conjure images of Scrooge McDuck diving through piles of gold coins, there are often no outward signs of financial hoarding and since saving is generally considered ‘good’ behavior, it largely goes unaddressed.  Just as with CBD, the spending behavior (or lack thereof) is meeting an emotional need, in this case instilling a sense of comfort and security.  Often brought on by a traumatic life event, hoarding disorder is typically treated by addressing the emotional root of the problem in therapy.  Despite what they do on A&E’s show Hoarders, pushing someone to change or physically rid themselves of their stockpile is unlikely to work without first unpacking the underlying issue.

The Vast Middle Ground

The majority of us will find ourselves somewhere in between these two extremes, working to find the ideal balance between saving and spending.  Here is what the outliers can teach us about how to get there:

  1. Spending isn’t totally rational. Money disorders represent instances when our emotions have hijacked our decision-making, but all financial decisions have both a rational and emotional component.  All spending is subconsciously based in part on the desire to feel good, avoid pain, exert control or give and receive love.  If you pay attention, you’ll learn to notice which one of these is driving your decisions (and the decisions of those around you!).
  2. Emotional work often precedes behavior change. If you find yourself trying to change your budget and it won’t stick, you might want to explore the emotional motivations behind your spending.  Are you trying to appear like you do or do not have money? Are you expressing love to friends and family through buying them things?  Are you resistant to spend because you have concerns about not having enough? This is perfectly normal but like the extremes, it’s hard to change behavior without addressing the cause.
  3. Know what ideal spending looks like. Spend less than you make.  Save enough to prepare for short and long-term goals.  Avoid using money as your primary source of happiness or stress relief.  Address lingering concerns about money, including how it affects your relationships.  Use money for both enjoyment and a means to prepare for the future.

It might feel like you need a monumental shift in spending to get where you want to be, but realistically you’re probably trying to go from good to great, or great to ideal.  It turns out to get there, you may need to take a detour from moving forward and go inward instead.

If you think you or someone you know is battling a money disorder, support from a mental health professional may be appropriate.  You can find a financial therapist near you here.

Source: Financial Therapy, Theory, Research, and Practice by Editors Braley T. Klontz, Sonya L. Britt, and Kristy L. Archuleta