Financial Anorexia

Some people have a less-publicized type of spending disorder – financial anorexia. People who suffer from the eating disorder of anorexia obsess about food and the number on the scale. People who suffer from the financial disorder obsess about money and the number on their statement(s). For those suffering – and it is indeed suffering – from financial anorexia, they never believe they have enough to enjoy what they’ve got.

According to Ken Donaldson, LMHC, a licensed counselor in Seminole, FL, “Anorexia is characterized by a distortion of perception.” Someone suffering from the eating disorder believes they still need to lose a few extra pounds, when to everyone else it’s clear they are harming themselves. Someone suffering from the financial one believes they still need a bit more money, when it’s clear they are depriving themselves.

Our culture still worships conspicuous wealth and Twiggy-like figures. “You can’t be too rich or too thin,” sums it up.

Most people understand the “too thin” part, but “too rich”? Is it possible to be “too rich”? Some people accumulate an abundance of resources, not out of a healthy relationship with money, but out of fear. They might be “too rich” for their actual needs, because the more they have, the more they have to be afraid of losing. What are they afraid of? Fears might include:

·         that it will disappear tomorrow due to a world event;

·         fear of a very expensive health issue;

·         fear of hyper-inflation;

·         fear of becoming dependent upon adult children;

·         fear of “spoiling” family members or of being taken for granted by them; or

·         fear that self-worth can only be measured by net worth.

Certainly some of these things can happen. And there are far more that can be added to the list. But when we reach the end of life and realize we worried more about what might happen than enjoying what we had, we might be in for a world of regret and hurt.

How much is too much to spend on seeing grandchildren or old friends one more time per year? 

How soon is too soon to leave a stressful, unhappy job if it’s taking years off of your life?

How much is too much to spend on the trip of a lifetime you have been dreaming about for so many years?

How much is too much to spend on self-care like a massage, therapy sessions, or a manicure?

While the eating disorder of anorexia can be fatal, financial anorexia can be dangerous to relationships and mental health.

What can be done about it? Anorexia is fueled by isolation – the more the sufferer depends upon their own distorted perception, the worse their condition becomes. Ebenezer Scrooge (in the beginning of Dickens’ tale), is an isolated penny-pincher and money hoarder, the stereotype of the extreme financial anorexic.

Exposure to new information is the best weapon. According to Donaldson, “New information will disrupt the pattern.” Finding a support group, counselor, and therapy can help those with eating disorders. For financial anorexia, a visit with an understanding financial professional, who can provide concrete reassurance, often is a good first step. How did Scrooge turn around? By exposure to his past, present, and future if he continued on his course.

The psychological benefits of working with a financial professional were recently borne out in a 2017 study sponsored by the CFP Board. The study concluded, based upon a survey of over 800 consumers, that, “Working with a CFP® professional ultimately removes the negativity consumers experience relating to their finances and instead elicits feelings of confidence, optimism, ease, and security.”

Confidence, optimism, ease, and security. Those sound a lot better than distorted perceptions and irrational fear. How do you want to feel about your financial future? Leave us a comment here.

Want more information about financial psychology? Sign up for our monthly e-letterschedule a call, or check out Chapters 1 – 3 of The Mindful Money Mentality: How To Find Balance in Your Financial Future.

Holly Donaldson

Holly P. Donaldson, CFP® writes and consults on the psychology of money. Her fee-only, product-free financial planning practice focuses on increasing financial self-efficacy for those seeking a financial navigator to help them make good decisions. She is the author of The Mindful Money Mentality: How to Find Balance in Your Financial Future (Porchview Publishing, 2013) and publisher of the award-winning monthly e-letter, "The View From the Porch." With a fully virtual practice in Seminole, Florida, she primarily serves clients located in the Tampa, St. Petersburg, and Clearwater areas. Holly will also work with clients who are a good fit located elsewhere in the United States.

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