Working as a cashier in retail has allowed me to be privy to a lot of people’s financial problems. For example, if a person’s credit card got rejected, I’d sometimes get a message on my screen to call their credit card company immediately for a credit check…which often resulted in having to sheepishly pass the phone to the client, and listen uncomfortably to a one-sided argument where the person insisted there was still some wiggle room left on their credit card.
Or that client who came to my cash, excited and breathless, because she managed to snatch the last (enter BIG brand name here) wallet. “I’ll have to miss a car payment this month, but I got the wallet!”
And this isn’t a sarcastic, “Is-this-woman-freakin-crazy” kind of wow. It’s a scared, “Wow – how do people live like this and not panic about financial ruin?”
I panic when I have a balance on my credit card – I always know exactly how much money I owe, and as a result, how much I need to put aside and how much I can allow myself to spend. Even having one credit card bugs me. I don’t like to owe anyone anything. I don’t care if you only lend me 50 cents. You’re going to get it back eventually.
So if you’re mesmerized by those red “50% off” signs, bedazzled by a “don’t pay for 30 days” deal, and hypnotized by an offer for a new, pre-approved credit card, I advise caution. Our recent study at Queendom indicates that people who own several credits cards may be at a greater risk of becoming shopaholics.
“When I shop the world gets better, and the world is better, but then it’s not, and I need to do it again.”
Rebecca Bloomberg in Confessions of a Shopaholic
For a lot of people, retail therapy is an outlet. The smell and sight of new merchandise can offer a well-needed distraction, whisk away worries, and offer a bit of an ego boost when that new outfit fits just right. Unfortunately, those good feelings are often short-lived. The high a shopaholic gets from buying things is only temporary – and once it wears off and the reality of how much you spent sets in, the downfall can be really terrible. And in order to get out of an emotional rut, many shopaholics will shop again to get that high back. It’s a vicious circle, emotionally and financially.
Aside from the dangers of retail therapy, our research also reveals that owning a lot of credit cards simply adds fuel to the fire. Analyzing 4,725 people who own anywhere from 1 to 3+ credits cards, our statistics indicate that as the number of credit cards owned increases, the greater the risk for shopaholism and financial disaster.
Here’s what happened when we compared people who own one credit card to those with more than three:
- Those who own more than three credit cards are less skilled at money management (score of 52 vs. 65 for those with one card, on a scale from 0 to 100).
- They are more likely to use shopping as a means of coping with stress (score of 72 vs. 59 for those with one card).
- They are less self-controlled and self-disciplined, and more impulsive (score of 50 vs. 62 for those with one card).
- They are more likely to consider being fashion-forward a priority (score of 57 vs. 50 for those with one card).
- They are more likely to get an adrenaline rush from shopping (score of 63 vs. 51 for those with one card).
- They are at a higher risk of becoming addicted to shopping (score of 54 vs. 42 for those with one card).
Our research also reveals that 79% of people who have more than three credit cards have already been told at least once by friends and family that they need to cut down their shopping. While only 3% have sought help from a professional about a shopping problem, another 15% are seriously considering it.
Like any addiction, admitting that you have a problem is the hardest step:
Suze: Bex! Two hundred dollars on Marc Jacobs underwear?
Rebecca Bloomwood: [pours the tequila] Oh, underwear is a basic, human, right.
Suze: Seventy eight dollars on lavender honey?
Rebecca Bloomwood: I felt sorry for the shop assistant. She had a lazy eye. I didn’t know which way she was looking! I didn’t know if she was looking at me, it was so sad.
Unfortunately, of those who have more than three credit cards and who score high on our shopaholism scale, 15% don’t think they have a problem – but they clearly do. You can’t wait until after the credit card bills come in, the creditors start nagging, utilities get disconnected and relationships are broken to finally wake up. If you’re spending more money than you have and most of it goes to shopping for things other than basic needs, you need to step back and give yourself a reality check – before you ruin your credit and your life.
And here’s the thing – chances are that the shopping problem is covering another underlying issue that a person is not willing to face or deal with. Shopping can be an escape from a stressful life or unhappy relationship. It could stem from a desire to feel a greater sense of self-worth – if you have the latest fashions, you’ll fit in, get compliments, or gain respect. Until a person figures out why they really shop – the reward it offers them – they will have a hard time breaking the habit.
Here are some tips to keep shopping habits under control – with one caveat: if you’re already in serious debt because of a shopping addiction, seek out the guidance of a financial adviser and, yes, even a therapist.
- Get rid of the plastic. Credit cards and debit cards make it too easy to spend money – all it takes is a swipe and the money’s gone, which lands you with another bill you can’t afford. If you go shopping, bring only cash. This way, you’ll only spend what is in your wallet, minimizing the risk of debts you can’t afford. Or, if you can’t seem to bring yourself to slice up your plastic friends, fill a plastic bag with water, stick your credit card in it and throw it in the freezer – you’ll literately be freezing your assets.
- Resist the immediate impulse. Here’s a piece of advice I always gave to clients when they were unsure about a purchase (this is why I suck at sales): If you find something you like, don’t purchase it on the spot. Leave the store and take a few days to really think about whether or not you really need it – making a pros and cons list would be even better. If after a few days you still must have it, you can always go back and get it. Here’s an additional tip: If you’ve picked up a piece of merchandise that you really want but feel a nagging doubt at the back of your mind (even a small one), listen to that inner voice. It’s warning you that you’ll end up regretting your purchase later on.
- Treat yourself when you accomplish something. Rather than shopping just to shop, use it as an incentive. In other words, reward yourself after achieving something amazing. For example, if you’re aiming to lose weight, make that your goal and buy yourself a new skirt or pair of pants when you lose the first ten pounds. Just don’t exceed one treat per month.
- Get a hobby. Instead of spending all your time shopping, occupy yourself with another interest. It doesn’t matter if it’s golf, gardening or go-carting – if your time is spent elsewhere, your mind will be too. You never know, you might find something you enjoy doing even more!
- Strength in numbers. Try shopping with a friend or family member – preferably one who doesn’t shop as much as you, or maybe even someone who hates shopping. If you find your fingers itching to spend money, ask for their opinion. This decreases the impulsive shopping tendency because you’ll be getting an unbiased opinion.
- Be wary of online shopping. Sure, you can find unbelievable deals and comparison shop. You can check product reviews and gain insight that will help you make informed decisions. However, you need to focus on the original item and not get carried away by all the additional tempting offers thrown your way. Don’t forget that most sites that offer such incredible bargains are smartly designed with a built-in sense of urgency. You may be told that items in your basket are reserved “only for 15 minutes!” or that an offer is limited and that millions of shoppers are waiting to snag that exact item you’re shopping for. These are– well-known sales tactics that lead to impulse shopping. And impulse control is the Achilles’ heel of shopaholics.