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Hmmmm, overspending. If there was ever any doubt, one thing the economic meltdown in 2008 made obvious was that Americans were clearly spending more than they earned. Consumer debt had never been higher. What’s worse, most everyone felt a sense of entitlement, whether they could afford to buy or not. This excessive materialism had become the American Way.
After all, everyone overspends a bit, don’t they? Little treats? Little sins?
When spending is pushed to where it starts having a negative impact on personal finances, the purchasing pattern is considered “overspending.” At that point, the act seeks to fulfill a painful void, a need for comfort, affection, and connection.
These kinds of money behaviors may feel automatic, almost subconscious. (That’s because the behaviors are automatic, at least until the big spenders figure out—by themselves or with help—what the triggers and explanations are .)
The causes range from a multitude of situations: having suffered deprivation as a child, being teased by schoolmates for dressing differently, in fact, any feeling of material inferiority. (And our consumer-oriented society can be relentless.)
The result is often a desire to impress others with what they own or are able to obtain in the form of services. Low self-worth or self-esteem gets masked by material excess.
Overspending can actually begin one generation earlier. Here parents justify overspending on their children and end up distorting their kids’ sense of worth: of money and of things. The parents’ excuse is that they never want their children to go through feeling the way they did when they were young: ostracized or teased.
Memories of inconsistent family patterns—where parents swung like a pendulum, from ignoring money one day to obsessing over it the next—can lead to overspending too, in the absence of clear, consistent role models.
Or maybe the myth of fairy godmothers waving magic wands and manifesting money lasted into adulthood, so “it’s only money” translates into the belief that there’s an endless supply. In this case, the idea of self-control seems pointless.
Whatever the cause, overspenders often create little rituals around the act of spending. The shopping experience may be used to feel connected to a community made up of store clerks, managers, and others who are more than happy to cater to them … as long as they’re spending money. In their minds, that catering is interpreted as a feeling of importance and love.
Lots of overspenders are confused about the role that money plays and how they relate to it. They may have adopted the maxim that more money will make them happy, yet they find themselves deep in debt and unable to buy things as a result of their out-of-control spending. And, with each cycle, the level of anxiety increases.
Some women’s concept of money is subjective, since money is spent in order to meet emotional needs instead of simply to acquire goods and services. As a result, their moods are what determine whether they feel their available funds are insufficient or limitless. How much they can afford to spend becomes hard to define. Money looks more like Monopoly currency, so they spend it that way.
When Things Get Serious
Say certain women have an irresistible urge to spend. Once they start, they lose control. Having lost control—again!—triggers guilt and anxiety. What can soothe those terribly uncomfortable feelings? More spending. (Imagine what online shopping has done to overspenders, by turning shopping into a 24/7 activity.) And so it goes until they reach serious levels known as compulsive buying disorder.
Women with this disorder are consumed by money worries. They use the act of shopping itself as a temporary escape from depression, acute emptiness, or earlier traumas. The shopping urges they feel are irresistible as they look forward to the dopamine rush that floods their brains as that credit card gets swiped by yet another store clerk. Soon, remorse sets in and their feelings of low self-esteem take over. And back they go to patch over those feelings with yet another purchase. The results are often overwhelming debt, bankruptcy, and/or loss of a spouse.
Compulsive buying is as common as clinical depression in the U.S., affecting 5 percent of the population. And of those, sadly, 75 percent are women.
As in the case of other addictive and compulsive disorders, women dealing with compulsive buying disorders should seek professional assistance or 12-step groups such as Debtors Anonymous.
And for those of you who simply spend a bit more than you earn, take a look at what you’re doing with your money. If it feels at all out of kilter, stop, and think back to where that behavior might be coming from. Look honestly at how money was handled in your home, how you felt in the early years and which, if any, of the explanations above resonated with you.
Remember: just because you have a money behavior that resulted from how you were raised, that doesn’t mean you can’t reverse it. And the feeling of control and pride that comes with monetary self control is a beautiful thing. Let me help you reach it!
Bio: Sharon O’Day lost everything at age 53: her home, her business, everything. But how could that be? She’s an expert in global finance and marketing with an MBA from the Wharton School. She has worked with governments, corporations, and individuals … yes, she was the secret “weapon,” if you will, behind many individuals in high places. Yet she did! Since then, Sharon has interviewed countless women and done extensive research to understand how that could have happened, especially with her strong knowledge of numbers and finance.
The surprising answers will be shared in her upcoming book “Money After Menopause.” Today her mission is to show as many women as possible how to become financially free for the long term, through her “Over Fifty and Financially Free” coaching programs. She has developed a step-by-step plan to get past all the obstacles that keep women broke and scared … and from reaching the financial peace of mind they so deserve.