How To Identify A Shopping Addiction & Poor Spending Habits

by Guest Blogger on 2010-01-3126

One of the hardest changes for people with debt is changing their spending habits. We all get used to buying what we want, and that becomes part of our “lifestyle”. I’m not even a big spender, but I know it’s hard for me to give up those things I’ve grown to enjoy. But when times get tough, you need to make some changes. Otherwise, there’s no sense in looking for help with your debt if your main problem is outspending your income.

If you suspect that you are headed in the wrong direction with regards to your finances, then it may be time to face this issue head on. This also holds true with regards to your spouse or partner. Do you suspect that you or someone you know is being irresponsible about money? It may help to first find out if there is a palpable problem that you should address.

How To Identify A Shopping Addiction & Problematic Spending Habits

So here are some questions to ask yourself to determine if your spending is out of control (some of them are tough, so be honest with yourself):

#1 Do you constantly need more credit?
Credit cards are not supposed to be your source of income. So if you need to keep getting more cards so you can buy what you need, your spending is way over the top. And it’s time to stop using credit cards!

#2 Are you afraid to even look at your credit card bills?
Sometimes the truth hurts. But until you know the truth, you can’t fix the problem. So take a look at your credit card bills. And look carefully. Do you really need everything you’ve bought? If not, stop buying anything you don’t need to survive. Are your interest rates over 10%? 20%? Higher? If so, call the bank to see if they’ll lower your credit card interest rates.

#3 Have you been turned down for credit?
Big warning sign here. If you’re getting turned down for credit, you’re in the “red zone” for financial problems. So stop using credit, and focus on paying off credit card debt and paying on time. Before long, your credit score will improve and you’ll get back on track.

shopping addiction
Image from dailymail.co.uk.

#4 Do you have an adequate emergency fund?
Without an emergency fund, you’ll struggle every time you need to fix your car, pay your medical bills, or buy food when money is tight. And where will you find the money to pay for these things? Your credit cards, right? So do yourself a favor, and set up a savings account for an emergency fund. Put in $10 or $20 or $50 a week, or whatever you can afford, until you have $1,000 saved up.

Tip: Other banking options include: the PerkStreet Financial checking account (which awards you perks rather than a yield) or a checking account with a good yield.

#5 Is your wallet as thick as an encyclopedia?
OK, we’re not talking about family pictures or business calling cards here, that you’ll find in many stuffed wallets. If you’ve got enough plastic to build a house of credit cards, then you need to pick one card to use for emergencies, and put the rest in a drawer somewhere, where you won’t see them all the time. Not to mention what would happen if your wallet was lost or stolen, and some thief got their hands on all of your cards!

So, how many times did you answer “yes” to these questions? The only good “yes” is for the fourth question, the one referencing your emergency fund. Otherwise, it’s official: your spending is out of control. But knowledge is power, as they say, right? So now that you’re aware of your situation, what are you going to do about it?

If you are the spender in your family, then admitting that you have a problem is a great first step. I would suggest that you sit down, grab a piece of paper, and write down a plan for getting your spending back under control. For example, you can start with these suggestions on how to curb your shopping habits.

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{ 24 comments… read them below or add one }

LeanLifeCoach January 31, 2010 at 11:44 am

You might want to add something like — have you been shopping non-consumables more than once or twice in the past 3 months?

Kyle C. January 31, 2010 at 1:14 pm

I am glad to report I answered no to all of the above.

I would add if you have ever bought something from an infomercial.

Silicon Valley Blogger January 31, 2010 at 3:24 pm

Hi Kyle,
Question #4 is about emergency funds though — so I am sure you answered YES to that right? :) Are all products or services that have infomercials behind them really that bad ;) ? Well, okay, if it’s something you don’t absolutely need — but lots of used car lots are advertised that way…..

Ace of Wealth January 31, 2010 at 3:30 pm

This is a great list of questions. Another important question to ask yourself is whether you’re trying to replace something you already have. Do you find yourself constantly trying to convince yourself why you *have* something?

bloggy January 31, 2010 at 9:24 pm

I have answered No to all the above!

impressions January 31, 2010 at 9:35 pm

i like this. this seems to be an awakening for people who can’t control their spending habits — including myself. But the good news is — I just got over my spending issues. A month ago I realized that what I was doing is not right at all. So, I paid off my cards and closed my accounts. And it’s kinda fulfilling and worry-free. Well, right now I’m only spending what is left after budgeting my money for my bills, food and other stuff.

Niki Arinze February 1, 2010 at 2:21 am

I think the same issues can be addressed for the US government. If the government can’t even control “credit card” spending, how are citizens going to learn the importance of living within their means and paying off their debts. I think the financial crisis has forced a lot of people to look at their spending situation, but I still think some are just continuing their old ways because the #1 spender (US) keeps charging up the card.

basicmoneytips February 1, 2010 at 5:49 am

I think you can have an addiction even if you do not answer yes to a lot of these questions.

Some people still live within their mean but waste money on things they do not need on a regular basis.

I think you need to throw in how much time to I spend buying a product that is not a necessity every month.

frugalscholar February 1, 2010 at 9:46 am

My mother is financially responsible and financially secure, but she has a shopping addiction. What you are discussing above is a shopping addiction that affects your finances. Addictions can affect other aspects of your life.

Credit Girl February 1, 2010 at 10:52 am

I agree with basicmoneytips. This is a great guideline for those extreme shopping addicts though. I think answering yes to ONE answer is enough to know that you’ve got to change some things around to better manage your budget. Here’s a funny article filled with photographic evidence of the hard times that we’re all currently going through.

Tracy February 1, 2010 at 5:03 pm

That used to be me. And I never saw it. I made plenty of money, but lived paycheck to paycheck and didn’t manage things all that well. Then the recession hit and I got caught. Now I can’t believe how much less stressful my life has become and how much more I enjoy myself. I have money left over every month and my emergency fund is growing while my debts shrink. It just gets better and better.

John February 1, 2010 at 7:07 pm

Another test you can add to the list is the ability to leave your credit cards at home. I’m not talking about one day. Place your credit cards in an envelope and see how long you can go without opening the envelope. If you can’t go for more than a week, you’re probably addicted!

Credit Girl February 2, 2010 at 9:49 am

@ John- That’s a good one! I know so many people who probably wouldn’t be able to do just that…

@ Tracy- I know how you feel. Because we make a decent amount of money, we feel that we can splurge and sometimes we splurge several times a month and that can really hurt our finance because after all that could’ve been money that went to our emergency fund.

Shawn Smith February 3, 2010 at 12:03 am

I have been a spendthrift person in the past but now I’m coping with this addiction and prepared a list of Dos and Dont’s for myself to prevent myself from becoming a Wastrel…!!!!

Christina February 3, 2010 at 5:44 am

Such a relief to read your article, I’m not as bad as I thought I was…

Kredit Blog February 3, 2010 at 2:26 pm

1,000 Dollars as part of an emergency fund sounds insufficient for me. You should save at least three months of your earnings or you should have a very secure job.

Goran Web Design February 3, 2010 at 4:32 pm

In times gone by I answered YES to many of these questions, but today I am free! I still spend recklessly sometimes, but it is always cash only. This does mean that the emergency fund gets battered often though. It is there for emergencies after all ;-)

Forest February 4, 2010 at 6:07 am

I’ve realized I have become addicted to not shopping. I’m fine spending cash on meals, lending to my partner and other things however…. when I get inside a store I try hard not to spend money. Even if I need something like new socks, I end up making any excuse to not go to the store and buy the stuff! It’s getting ridiculous :)

Personal Finance Student February 4, 2010 at 10:03 pm

Thanks so much for the tips! :-)

Shaun McGowan February 5, 2010 at 10:21 pm

This is a great guideline for those extreme shopping addicts. I think answering yes to one answer is enough to know that you’ve got to change some things around to better manage your budget. Following these guidelines makes my life less stressful and shows me how much more I can enjoy myself.

Well Planet February 6, 2010 at 2:02 am

Some of my friends have this sort of shopping mania…Especially girls…If any new commodity comes in the market they want to try it out…I really hate it..may be for the reason am not at all a spend thrift.

Ken March 10, 2010 at 12:35 am

My friend is a shopaholic…she keeps using her credit and finally ends up not being able to pay it.

Kokin May 29, 2010 at 5:37 am

Yeah credit cards can be your source of income; you just need to keep getting more cards so you can buy what you need.

Dave September 11, 2010 at 2:01 pm

I know a bunch of people that fit all those categories… lol…

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