There’s been a lot in the media lately about debt addiction. It’s a problem not only in America, but in other parts of the world, too.
It’s not hard to see that many of us have too much debt – and we know it. In the wake of the Great Recession, many of us have taken steps to curb our spending and reduce our debt. But those steps are harder to take for some people. Despite knowing the dangers of overspending, they just can’t seem to stop creating new debt.
So how do you know if you have a debt addiction, or are just a little less than great at managing money?
We all have our moments of overspending. Occasionally, nearly everyone zones out and forgets to pay a bill on time. Debt addiction goes beyond the infrequent financial faux pas. People who are addicted to debt rely on credit abuse as a crutch to deal with their money problems and to make themselves feel good.
Signs of Debt Addiction:
• Poor understanding of your finances - You don’t have a budget or long-term financial plan.
• Ignorance of account balances and monthly expenses – Do you leave bank statements unopened?
• Frequently borrowing items and not returning them – You borrow and keep small items like books or pens, or small sums of money.
• No savings and no retirement plan – You don’t plan for non-recurring but predictable expenses, such as your taxes or your retirement.
• Compulsive shopping – You make impulsive purchases, don’t use things you’ve bought, or leave price tags on clothes so they can be returned later.
• Inability to pay your bills – You run out of money every month.
• Constant chaos and drama around money – You’re always on the edge financially, bouncing checks or using one credit card to pay off another.
• Living paycheck to paycheck – You never have money left over for important things like health or car insurance.
Start with your doctor and ask for a referral to a mental health professional who specializes in addiction treatment. A financial services professional can help you create a plan for getting rid of credit card debt and other forms of debt. Online resources like DebtorsAnonymous.org can also help.