What is financial anorexia? Financial anorexia is a type of spending disorder. People who suffer from the eating disorder of anorexia may obsess about food and the number on the scale. People who suffer from the financial disorder may 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 mental health counselor in Seminole, Florida, “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 more money, when it’s clear they are depriving themselves.
While the eating disorder of anorexia can be fatal, financial anorexia can be dangerous to mental health, friendships, and family relationships. Think about how it feels to be with someone engaged more in extreme deprivation than in enjoying life’s simple pleasures.
Where Does Financial Anorexia Come From?
Anorexia is fueled by isolation – the more the sufferer depends upon their own distorted perception, the worse their condition becomes. For example, Ebenezer Scrooge (in the beginning of Dickens’ tale), is an isolated penny-pincher and money hoarder. He is the stereotype of the financial anorexic.
Additionally, 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”? Financial anorexics typically accumulate an abundance of resources. Their wealth does not come from a healthy relationship with money. Rather, fear is at its root. They might be “too rich” for their actual needs. Further, the more they have, the more they have to lose, or fear losing.
What are they afraid of? Fears might include:
- that it will disappear tomorrow in a catastrophic world event;
- a very expensive health issue;
- becoming dependent upon adult children;
- “spoiling” family members; or
- that self-worth will fall in lockstep with net worth.
Certainly some of these things can and do happen. Yet our societal messages, and brains wired to look out for danger, emphasize catastrophic scenarios past the point of their actual probability. At some point in life, many financial anorexics realize, to their immense regret, that they worried more about what might happen, and didn’t, than enjoyed what they actually had.
What Can Be Done About It?
Exposure to new information sources is one method of help. According to Donaldson, “New information will disrupt the pattern.” Support groups, a counselor, and therapy can provide external points of view. For financial anorexia, a visit with an understanding financial professional, who can provide concrete reassurance, often is a good first step.
Sometimes the new information has to come from, unfortunately, from a painful life-altering event. How did Scrooge turn around? By exposure to his past, present, and future if he continued on his course. The Ghosts of Christmas Past, Present and Future showed him more to be afraid of than the fears he made up for himself.
At some point, it makes sense to ask a few questions:
What were all those years of saving for?
How much is too much to spend on seeing family or 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?
What is it truly worth to take the trip (safely, of course) 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?
What if the thing to be afraid of is completely unknowable right now and wouldn’t be solved with money anyway? What would change?
Working With an Understanding Professional
A 2017 study sponsored by the CFP Board supported the psychological benefits of working with a financial professional. 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 catastrophes, worry, and fear.
How do you want to feel about your financial future? Share your thoughts below.
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