And what to do about it.
Money can be one of our biggest stressors — something that many people became especially aware of during the pandemic when budgets tightened. While it's normal to struggle with your finances, sometimes it can get out of control. Credit card bills pile up, accounts run thin and you get stuck in a cycle of debt you can't (or won't) seem to break out of.
Money expert Nicole Lapin calls this debt addiction. She explains it in this episode of "The Money Show" here. It's not necessarily the debt you're addicted to so much as the indiscriminate spending of money and the comfort it brings — despite the serious troubles it also causes. Are you worried about your or a loved one's financial situation? Here are Lapin's three key signs you are addicted to spending money... and the subsequent debt.
Want more money tips? Watch Nicole Lapin in "The Money Show," streaming on OZtube now.
You Spend When You're Emotional
What That Means: This doesn't just mean when you're mad or upset. It also includes spending when you're happy. Whatever the emotion is, you seem to spend more when you want to make things better or celebrate. Lapin compares this to emotional eating, which is when people eat during sad feelings as a comfort or when they are happy as a reward. However, emotional spending can lead to bigger problems, like a large spending binge, which sends you on an emotional roller coaster ride of stress and anxiety — leading to more spending and trapping you in a cycle.
What to Do: It can be helpful to identify your emotional triggers and swap the spending for a healthier habit. That could include taking a walk, journaling, chatting with a friend, having a self-care night at home or going to a fitness class you enjoy. It could also help to talk with a therapist about your feelings and struggles. Here are three real benefits of therapy you can use for the rest of your life.
You Don't Know When to Stop
What That Means: When you do spend money, you tend to spend way more than you planned to. This means you have difficulty setting spending limits for yourself and sticking to them and you can't tell the difference between items you need versus items you want, like buying 10 shirts instead of the one you needed to replace the blouse that doesn't fit anymore. You may also tend to buy on impulse instead of reason, like focusing on bulk discounts at the store. Just because those five items are on sale together doesn't mean they end up being particularly cheap.
What to Do: Lapin suggests walking away without buying the items you're inclined to put in your cart. Chances are, you don't actually need them. Taking time between purchasing them can lessen the impulse, and Lapin says you will likely even forget about them.
You're a Subscription Junkie
What That Means: Do you have any monthly subscriptions? They could include the gym, a wine club, a news site, streaming service or lifestyle box. How many do you have, and are there any that you've even forgotten about? It's important to ask these questions when assessing your subscription services. If you are actively using and loving it, and you've accounted for the monthly price in your budget, then that's good! However, Lapin says monthly sign-ups can be our biggest downfall — especially when we have so many we lose track. Recurring financial responsibilities, even little ones, can add up and eat away at your funds.
What to Do: You may want to go through your phone and computer and delete any shopping or coupon apps, store emails and newsletters, and similar things, so you're not constantly reminded to buy things. And take a look at your monthly bank statement and credit card bills. Highlight the subscription services and decide which ones you actively use and which ones you don't. And of course, unsubscribe from the ones you don't use!