Hoarding Disorder: How to know when saving has gone too far
Hoarding Disorder is generally thought of as connected to material possessions and is organized into three categories: 1.difficulty discarding objects, 2. disorganization/clutter, 3. and compulsive acquisition of new items (Weir, 2020). However, there is also a link in the Diagnostic and Statistical Manual of Mental Disorders, Fifth Edition (DSM-5) criteria for obsessive-compulsive personality disorder (OCPD) includes “a miserly spending style toward both self and others; money is viewed as something to be hoarded for future catastrophes” (American Psychiatric Association, 2013, p. 679, emphasis added).
While traditional Hoarding Disorder does not examine finances specifically, we can see how money hoarding could be quite a temptation — and very difficult to differentiate from normal frugal savings.
Here are a list of mistakes people make when that can have them fall into the trap of Hoarding Disorder with their money:
No planned spending limit. This generally impacts people in the opposite direction (i.e. those with no planned spending limit tend to spend too MUCH money). But it can also be problematic when you do not have a planned spending limit for those who are weary of using money. If you don’t budget and plan for discretionary spending, even spending $5 can be overwhelming. Having a budgeted-for, pre-planned monthly allowance can be liberating for people who find it difficult to spend, because it gives them an accounting for their spending that they know is safe.
No planned savings goal. If there is never a clearly delineated savings goal and strategy, then there is never a sense of closing the feedback loop to say “Yes, you’ve saved enough!” The strategy for the hoarding mindset generally is “Save every penny that you can!” This is contrasted with someone who has a clear strategy (for example, plans to max out tax-advantaged retirement accounts, HSA funds, IRAs, 529s, etc.). This can let the person know if they are on track or behind their savings goals. Without a clear plan, there is no signal that it is safe to slow down.
Keeping everything in savings accounts. This idea can often feel safer than investing. And while having a well-stocked emergency fund is very important, if you leave too much cash on hand, you are missing out on really important growth over the years. Getting with a qualified, fiduciary financial planner can make the process easier.
Getting isolated. Part of financial hoarding disorder can result in saying no to things (see #1 above). With no planned spending limit, you are going to end up saying no to dinner with friends, going to weddings, even dating in general. The more that the hoarding isolates someone, the more disconnected they become to their community. It is important to learn how to feel safe to spend money in order to form and nurture your relationships.
If you (or someone you know) needs help with this, give me a call. Financial Therapy (individually or within your relationship) can be wonderful for helping discuss these issues. If I am not a good fit, I will help them find someone who is.
Email: DrZepeda@FinancialTherapyTexas.com
Phone: 713-291-9553