Five Chronic Financial Problems That Money Won’t Solve

If the world and the people in it were simple and sensible, hardly anyone would struggle with money. Families with debt would take rational steps to pay it off slowly, starting with debts at the highest interest rate. And since we’d all know exactly how much we earned (and thus, what we could afford), we’d spend less than that – while also saving plenty of cash for fun and the future.

Unfortunately, humans are rarely rational, and modern life tends to complicate our finances no matter our intentions. It’s hard to stay out of debt when everyone you know makes more money than you do, for example. And paying off debt often means going without, a difficult feat when you’re not accustomed to sacrifice.

But, our financial difficulties don’t end there. While plenty of people struggle with money due to their poor financial decisions or disorganization, there are others who suffer from chronic conditions that make it considerably harder to get ahead.

“Money disorders are patterns of chronically self-destructive behaviors that are not fixed by having more money,” says Dr. Brad Klontz, a certified financial planner and associate professor of financial psychology at Creighton University. For those suffering from a psychological condition, it’s possible that no amount of money will help them dig out – and more money can even make matters worse.

But, what are the conditions that plague so many people trying to get their financial acts together? Klontz says gambling, compulsive buying, and hoarding disorders are among the big ones:

#1: Gambling

Chronic gambling is a persistent and problematic disorder that affects as much as 5% of the population at some time in their lives, notes Klontz. Those who have a gambling disorder have difficulty controlling, stopping, or reducing their gambling. They may hide their gambling from family and friends, and they may need to gamble more and more to keep things exciting.

Some of the worst cases involve situations where a chronic gambler engages in illegal acts (e.g., stealing, extortion, etc.) to fund their chronic gambling habit. Obviously, this kind of behavior takes their addiction to another level, both because it raises the stakes and because it adds a criminal element to their behavior.

“Pathological gamblers often gamble as a way to feel better about themselves and as an escape from their problems,” notes the Klontz Money Behavior Inventory (KMBI), a money wellness test he offers on his website. “Like other addictive and compulsive behaviors, however, untreated pathological gambling can have devastating effects on one’s relationships and life-satisfaction.”

#2: Compulsive Buying Disorders

Compulsive buying is another chronic condition that afflicts more than 5% of Americans. This condition is worse than just having the urge to shop every once in a while; compulsive buyers actually experience irresistible impulses to buy along with complete loss of control over their shopping and spending.

The thing is, this issue is often much deeper and more complex than we realize. While spending addiction appears to be a financial problem, the root cause of the issue has nothing to do with money, says licensed psychotherapist Ginger Dean of Girls Just Wanna Have Funds.

It’s “simply a symptom of a larger emotional problem, and money can’t be used it fix it,” she says. And since spending is used to ease discomfort caused by emotional pain, overspending can be cyclical, happening over and over again.

According to Dean, symptoms of spending addiction include shopping compulsively during periods of high stress, buying items you don’t need to keep the “high” going, buying items you know you’ll return later, and buying items for the sole purpose of impressing others.

Klontz’s research notes that chronic and compulsive buyers typically wind up feeling shame, regret, and guilt after making purchases. However, they often pick up where they left off, starting up yet another shopping binge to ease their pain. Klontz says compulsive buying is a serious money disorder that is also associated with anxiety, depression, low self-esteem, eating disorders, and substance abuse as well.

#3: Hoarding Disorders

We’ve all seen or at least heard about the television show Hoarders on A&E by now. If you haven’t, picture seemingly normal humans who live in barely inhabitable homes filled with trash and random belongings. While some of the individuals confess to being “collectors” of sorts, others just can’t manage to throw things away. Regardless, most of the people who suffer from this condition struggle to live a typical life or have regular social interactions with friends.

Klontz and his team have conducted research that shows that hoarders are emotionally attached to their possessions. They have trouble deciding what to keep, what to get rid of, and how to organize the possessions they have. They may also have a miserly spending attitude toward themselves or others, and may struggle to discard anything as a result – even trash.

Unfortunately, there are health risks that come with hoarding, such as fire hazards, falling down, and unsanitary conditions. Ultimately, hoarding can also take a financial toll as well, since constantly accumulating more items can be a costly habit on its own.

#4: Financial Enabling

We all have that friend who is too generous for their own good. They put themselves in financial peril to help someone else with money, and they have trouble saying “no” to financial requests from children, family, or friends.

According to Klontz and other experts, this is known as financial enabling. Those who suffer from this condition tend to put themselves at risk either through intense generosity or by loaning money with no clear arrangements on how it will be paid back.

While financial enablers tend to act out of the goodness of their hearts, they typically wind up feeling resentful and angry about their situation. They may feel taken advantage of, or as if others don’t appreciate them. Unfortunately, this rarely stops their behavior as they continue giving to others regardless of their own financial health.

#5: Financial Dependence

Financial dependence comes in many different forms, but usually entails dependence on a partner, parents, or even the government or a trust fund. But financial dependence is more than just not wanting to work; it’s when someone suffers from such low self-esteem and feelings of incompetence that they no longer feel capable of supporting themselves.

There are obvious financial downsides that come with being dependent on a family member, partner, or third party for your livelihood, including feelings of anger and resentment and continued low self-worth.

What Causes Chronic Financial Issues?

According to Klontz and his research at Creighton University, “money scripts” are strong predictors of financial behaviors. Money scripts are the typically unconscious beliefs we have about money that we develop in childhood. While some of us learn positive habits from money scripts, not all of us do.

“For individuals who find themselves in a pattern of chronically self-defeating behaviors, it is important for them to examine their money scripts and where they came from,” says Klontz. He and his partner offer a Money Scripts quiz you can take to see what you learned about money during childhood, and how those lessons carry through to how you handle money today.

In addition to money scripts, a lot of chronic money issues seem to stem from low self-worth. “Low sense of self-worth is often the issue because money is related to high status, and people struggling in this area often use money to feel better about themselves,” notes Dean.

Dean offers the example of two friends, Amy and Tina, who compete for attention and status based on their purchases. Let’s say Amy’s husband bought her a new Mercedes — so Tina, who suffers from low self-worth, immediately goes out and buys a new BMW a few days later. If Tina can’t afford the payments, she may have to return the car or face the financial implications of defaulting on her auto loan or having the car repossessed.

“The issue there is the impulse purchase that happened in response to feelings of jealousy and inadequacy, which are rooted in low sense of self-worth,” says Dean. “People with a chronic low sense of self-worth often feel deep emotional pain and even physical pain. In response to wanting to ease this pain, a spending addiction is born.”

How to Manage Chronic Financial Issues

Obviously, there are other issues that lead to chronic financial problems. Addiction and abuse, for example, tend to bleed into all aspects of our lives – including our finances – over time if left untreated. Unfortunately, just knowing where your issues stem from may not be enough.

At the end of the day, you may need to reach out to a third party if you’re struggling to find balance with your spending or can’t seem to overcome your issues. Dean says many people wrongly assume a self-help book will fix the issue, but that the DIY approach rarely scratches the surface. At best, reading a book or watching a documentary will do nothing but “provide some psychoeducation, feel-good platitudes, and light coaching around the issue.”

“See a professional,” she says. “This is a process or behavioral addiction that needs to be treated by someone who specializes in this area.”

Holly Johnson is an award-winning personal finance writer and the author of Zero Down Your Debt. Johnson shares her obsession with frugality, budgeting, and travel at

Related Articles:

Have you ever struggled with a chronic financial issue or known someone who has? Please share in the comments below. 

Holly Johnson
Contributing Writer

Holly Johnson is a frugality expert and award-winning writer who is obsessed with personal finance and getting the most out of life. A lifelong resident of Indiana, she enjoys gardening, reading, and traveling the world with her husband and two children. In addition to The Simple Dollar, Holly writes for well-known publications such as U.S. News & World Report Travel, PolicyGenius, Travel Pulse, and Frugal Travel Guy. Holly also owns Club Thrifty.

Loading Disqus Comments ...