Liam Croke: What to do about those ‘money disorders’

HAVING broached the topic of people’s “money disorders” last week with a look at people who underspend for fear they’ll run out, this week I will look at three other recognised types of behaviour.

HAVING broached the topic of people’s “money disorders” last week with a look at people who underspend for fear they’ll run out, this week I will look at three other recognised types of behaviour.

The Ostrich

This type of disorder is where people metaphorically bury their head in the sand, because they just don’t want to deal with money issues; they are in financial denial. They lie about how much debt they have and they leave bills unopened. They avoid having any type of conversation about money at all, especially with their spouse or their family.

They are afraid to front up and deal with their financial situation and this has become more of an issue in the past few years where people were accustomed to a certain type of lifestyle they now don’t want to give up. Maybe that’s why they are in denial. They magically hope that things will go away and that no matter what happens, things will work out ok.

Experts in the field of financial therapy say that, almost always, ignoring your finances will backfire on you. Something drastic will happen that forces people into dealing with reality, whether that is having a house repossessed, getting a judgement registered against them or in some cases a partner leaving them.

In extreme cases, financial denial can lead to someone taking their own life.

Men in particular feel like failures because a business of theirs may have gone bust or they lost their job and can’t repay the mortgage on the family home. They start thinking there is no other way out and the only thing they can do for their family is not to be around anymore. If they can leave the proceeds of a life policy, then so much the better.

If people suffer from this type of disorder, psychologists recommend they should take the following steps:

1. Make a plan: If you can’t deal with your debt for example, then get help from the likes of MABS. Ask them to create a plan for you that will help you get out of debt; also get them to speak to creditors on your behalf.

Ask them to help set up a monthly budgeting system that will help track your spending and help you stay on top of bills.

2. Talk to your partner. Tell them how you feel and bring them up to speed on how things really are.

The Enabler

The enabler is someone who gives money to a person in a way that stops them from having to take responsibility for it.

Usually this will be where a parent gives money to their adult child and they do it with good intentions, but research shows the more financial support a parent provides, the less productive their children become.

There is nothing wrong with helping out a child in trouble, but it sends a message that could be interrupted as them not being capable of managing on their own and a consequence of this is they lack ambition and purpose and then suffer from another disorder called money dependence.

You are an enabler if you can’t say no when someone asks you for money or you are buying your clothes in Penney’s but your child is wearing Abercrombie jeans costing €100 and bought with your money.

I know you only want the best for your child and try give them the things you never had but taken to an extreme you are offering a kind of protection that is disabling for them.

Therapists offer the following steps for enablers:

Hold a budget summit: the person you are giving the money to (particularly adult children) may not know what sacrifices you are making for them and might have no idea that you giving them money is a problem at all. Talk to them and let them know how things are with you.

Set a time limit: If a child, regardless of their age, is used to and expects to continue to receive money from you, then you need to wean them off this dependency.

Gradually reduce your support over a three to six month period

The Dependent

This disorder affects a wide range of people, from those who rely on the state for their income, adult children living off their parents to the biggest section which is stay-at-home mothers, whose husbands make the money.

There is nothing wrong, by the way, with relying on your partner to be the sole provider if you are at home minding the kids. But, regardless of your situation, what financial dependents have in common is that everything is given to them and someone else might also be managing the money which leads to self-esteem and low self-worth issues.

According to Mary Gresham, a psychologist who specialises in financial therapy, “over time the earner starts to act more like a parent, and the dependent begins to feel and act more childlike”. She went on to say that “if you don’t earn it or manage it, it’s easy to feel inadequate and like you have no control in your life.”

The typical signs that people suffering from this disorder are resentment and anger all the time because the money they get comes with strings attached. They may be in an abusive relationship but worry they won’t be able to support themselves if they were to leave.

The following steps are the recommended ones for dependents:

If you don’t earn it, then manage it: Because if you do this will equalise the power in the relationship

Open up an account in your own name: Some people call this their “run away money” but this is a good exercise so if you need to buy yourself something you don’t have to ask your partner for permission

Get a job or volunteer: Find something to do if only for a few hours a week, if not for the money, it will help build up your self-worth