The Stages of Overspending

When I think about my financial weaknesses, there are plenty of them to talk about. Until recently, I didn't save money. I didn't have a retirement account. I paid overdraft fees constantly. Probably my biggest weakness, though, is my predisposition toward spending. Even when I was a kid, money burned a hole in my pocket. If I didn't have something specific in mind, I'd buy something random, like 20 packs of Bubble Yum that I chewed in one day (true story).

That "OMG need it NOW!" mentality followed me into adulthood. I didn't like shopping as an experience like some people do; I liked walking in and out of a store very quickly while still finding something to buy. It was like a game - what can I spend money on in 10 minutes or less? Some embarrassing facts about my past impulse buys:

• I have donated or thrown away more than 50 brand new pairs of jeans in the last 10 years after getting them home and deciding I didn't like the way they fit.
• I own close to 1000 books. While I've read all of them multiple times, I never once borrowed one from a friend or a library before deciding whether to purchase it.
• There are 4 Rubbermaid totes full of toys in my basement that I never brought upstairs after we moved. My son has never noticed they're missing.

These are only a few examples of how I ended up with $62,000 in debt after Chapter 7 bankruptcy. I was a spending machine; I bought things just to get that millisecond of joy when I threw the shopping bags in the trunk of my car and thought, Wow, I have money and this is proof that I can get what I want!

Except I didn't have any money. I was using credit cards to pay for these purchases, reasoning that I didn't have all the money at that moment, but I had enough to pay a minimum payment for months on end. Realizing the error in this logic took a long time, but once I did, I couldn't believe how much I've wasted over the years. Even when I got divorced, I left all the junk I'd bought behind because that's how little it mattered to me. My spending had done nothing to improve my life or provide for my basic needs, so it was easy to start over without the things I bought.

So how do you go from rabid consumption to a healthier financial lifestyle? It's not easy. I like to compare the transition to the stages of grief. While overspending is nothing compared to the loss of a friend or loved one, the process is very much the same.

Stage One: Denial 
This is the place where many chronic spenders live. If you don't admit you spend too much, you don't have to face it. This is only a temporary stage, though; eventually you are forced to confront the consequences of your spending. I returned to this stage periodically throughout my money rollercoaster.

Stage Two: Anger
Angry? I got angry plenty of times. Like when I paid all my credit card minimums and didn't have enough left to buy groceries. Or when my son had a last-minute field trip for school and I had to use a cash advance to pay for it. When you spend too much, anger is often misplaced - instead of getting angry at myself for overspending, I was mad at my friends for inviting me on a shopping trip, the government for taking so much of my paycheck for taxes, or anyone/anything else I could think of to avoid the truth.

Stage Three: Bargaining
This stage involves the hope that you can somehow delay or avoid the consequences of your spending. In this stage, I did things like promising myself I wouldn't put another item on my credit cards if this one last purchase would go through, and deciding to pay more than the minimum payment as long as I have money left at the end of the week. Bargaining is a sign of desperation - if you're in this stage, your spending is out of control.

Stage Four: Depression
It's easy to feel depressed when you're drowning in an ocean of debt. It's also easy to comfort yourself by purchasing more stuff. I had these isolated moments where it became clear what I'd done, and I would freak out and gather all my bills because darn it, I was going to do something about it. Then I would become overwhelmed and do nothing, or I'd go shopping to make myself feel better. You can get stuck in the cycle of depression for a very long time, making periodic stops in the other stages along the way.

Stage Five: Acceptance
This is where you want to be. After you flop around through the other four stages for awhile, you start to come to terms with what you've done and prepare to face it. Until you reach this point, you will likely do very little to change the way you spend money. Once here, though, you become empowered to form a plan and carry it out. It's very possible to improve your life once you have the motivation. Acceptance can't be faked - if you're saying, I need to change, but _____, you aren't here yet.

Where are you right now as far as spending goes? Have you accepted responsibility for financial mistakes, or are you still clinging to the hope that you can continue the life you're living?