I received a comment from a reader last week asking me how to stop a spending addiction. The comment was left on an article about Dave Ramsey’s Baby Steps, which is a process for getting out of debt, staying out of debt, and growing wealth. Dave Ramsey often speaks about the psychology of money as well, and how to conquer your bad money habits by changing how you think about money.
Here is the reader’s e-mail:
Hi Ryan. I am a woman of 53, and I am debt free. My home, my cars (2 caddy’s), my mule, anything and everything you can imagine is paid for. I have just started an Avon business, because I am retired, I wanted to do something to make the world look and smell beautiful, so I chose Avon. I have investments that pay me $5,000 a month, and I use Edward Jones to invest the money I receive. My problem is….I love to shop, and if I don’t stop , I will lose my fortune. Any ideas of what to do? Yes, it is an illness, I agree. I need something to replace this addiction. Got any ideas???
ps I also give to my church 10% each month
thank you, Jen
Congratulations on your financial success. Being debt free, giving regular financial gifts to your church, and having a sizable investment portfolio is an outstanding accomplishment. Branching out into an entrepreneurial pursuit is another great way to bring in additional income while giving you ownership and pride in your accomplishments. By all accounts you appear to be financially set for life.
But you are right to be concerned about your spending habits. You consider them an addiction and recognize that if you don’t change your habits you will go broke, so you need to take action – and soon. Hopefully the tips you find here will help you accomplish this. But remember these tips alone are nothing unless you take action.
I will preface this by stating that I am not a psychologist or financial professional. What follows are simple tips that may help you and others with similar bad shopping habits. If these tips do not work for you, I highly recommend speaking with a trained professional.
Break the spending addiction
In April I wrote about spending addictions for the Prosper Blog in an article titled, Breaking The Spending Addiction. The article detailed a few steps anyone can take to improve their spending habits. Below is a quick synopsis of the steps, and I recommend reading the full article for more details. The steps I wrote about are:
- Know why you spend. Do you spend money because you are bored? Does buying “stuff” give you a rush or a sense of wealth?
- Acknowledge your habits and make an effort to change them. You already acknowledged you have a spending addiction. Now you need to put forth the effort to change it, which means changing the way you think and act with regard to money and shopping.
- Know your weaknesses and avoid them. If the mall is your weakness, stay away. If you love shoes, stay away from shoe stores and the shoe department in the stores you visit.
- Change your habits. Go shopping only with a list and a plan. Budget your expenditures and follow that budget.
- Hold yourself accountable, but reward yourself as well.It may be difficult to quit cold turkey, especially if you do not allow yourself small rewards. Consider giving yourself one small splurge per month, decide on that reward, and “work” toward it. You will find that either didn’t want that item at all, or more likely, that working toward “earning” that item is much more rewarding than just going out and buying it (and other items) at will.
Of course, this is all a very simplified way to look at your spending habits. As with any addiction, there are many other factors involved, notably the how’s, the why’s, and the effects of your addiction.
Go on a shopping diet
Several months ago I featured a guest post, My Shopping Diet, by Sherylle of Sher’s Corner. Sherylle wrote about how she overcame her problem with shopping. I encourage you to read the article in it’s entirety, but I have summarized her main points below:
- Stay away from temptations.
- Go in with a shopping list and stick to it.
- Consider your needs vs. your wants.
- Budget and save for the things you really want.
- Shop with a purpose or goal; don’t shop mindlessly.
- Allow small splurges on occasion, but practice moderation.
I think Sherylle’s advice is great because it is very sensible and is a working template. If it worked for her, you may find that it will work for you.
It’s all about your perspective
Change your perception of shopping may help you change your shopping habits. I recently read an article at Trees Full of Money, which makes this a little more clear: Dave Ramsey Shifted My Financial Paradigm. In this article, the author writes about how he used to see things one way, now he sees them another way. Example: Instead of seeing an expensive car and thinking the driver (notice I didn’t write owner) must be rich, he might now think about how high of a car payment or lease the driver may have.
The point is not to think that people can’t afford the vehicle they drive, or that they do not own the vehicle (you mentioned you own your two Caddy’s outright), but to think about the financial impact “things” can have. For your case, you might begin to look at shopping not as a hobby or buying things, but as a burden or an avenue for squandering your wealth.
Your perspective plays an important role in your spending addiction. It is important to remove denial from the equation and recognize shopping for how it is ruining your financial outlook.
Consider professional help
I encourage you to read different articles, books, or other sources to find more information about how you can conquer your shopping addiction. As I previously mentioned, I am not a qualified financial planner and I am not a doctor or psychologist. If these tips are not enough to help you stop your spending spree, I encourage you to seek professional help. You may find help through a financial planner, a psychologist, your church leader, or someone else.
No one can do it for you
You’ve accomplished the first step by acknowledging your spending problem. Now it is up to you to see it through and conquer your spending addiction. I wish you luck.