Money hoarding is a complex issue that can rear its head at any age and can have a serious impact on a person’s mental health as a psychologist delves into the little-known issue
Most people are encouraged to save as much as they can, whenever they can, to prepare for “rainy days” or simply to improve their financial situation. However, this advice can be harmful for those suffering from Disorder Money Behaviours.
This obscure disorder can have effects similar to the more commonly recognised eating disorders. It spans a spectrum, with the most noticeable cases often being reckless spenders who live beyond their means or individuals with costly addictions like gambling.
Although such behaviours are typically looked down upon due to their obvious negative consequences, the opposite end of the spectrum can be equally damaging but tends to receive praise rather than criticism. This occurs when saving money escalates into financial hoarding.
The Journal of Financial Therapy has described it as a symptom of financial desire, with the top symptoms being a “miserly spending style” where individuals view money primarily as “something to be hoarded for future catastrophes”. This extreme form of saving can be harmful, as people may go without necessities, neglect self-care and exhibit extreme risk aversion despite having the means to improve their lives. These individuals also tend not to allow themselves luxuries such as holidays, luxury purchases or gifts.
Chartered Psychologist Dr Mark Rackley spoke to Reach about this lesser-known disorder, revealing that it largely stems from attitudes towards money formed in childhood. He explained: “We are not born with an understanding of money, what it is and how it impacts life. We develop a relationship with money and this relationship is shaped by the relationship that our parents have with money and what their relationship is like.”
Dr Rackley further elaborated, noting that those who grow up in families with plenty of money and a carefree attitude towards spending can end up lacking the ability to assign value to money, meaning they’re more likely to spend without much thought. Because these individuals haven’t experienced the threat of not having money, they don’t fear losing it and consequently, they don’t “feel secure in life” even if they have savings.
Dr Rackley has expounded on the psychological roots of money fears, saying: If we grow up in poverty where money is scare and there maybe a lot of arguments around money, then we can develop a relationship with money that sees us saving, being frugal and being scared of running out of money as we have already experienced the threat and fear of living in poverty. We can develop an irrational fear of not having enough money and hoard money to feel secure and help us feel safe.
This entrenched “fearful relationship with money” could lead a person to forgo life’s essentials like food, clothing or furniture in favour of saving every penny. Experiences perceived as luxuries, such as social outings and making memories, are often deemed as spendthrift excesses, so while their savings pile may soar, their overall satisfaction plummets, possibly leaving them “feeling unhappy, isolated and depressed”.
Dr Rackley advises that a “A healthy relationship with money is needed and for some they need to reestablish that to move it from unhealthy to healthy,” The challenge of addressing hoarding disorders is well known; however, as financial therapy progresses, professionals are becoming more equipped to tackle these complicated issues related to Disordered Money Behaviours.