How does addiction affect money management?
Recovering alcoholics and drug addicts often find themselves with large amounts of debt that accumulated from spending money on alcohol and other drugs, gambling, compulsive spending, unemployment, or frequent absences from work. Addiction can cause people to disregard other aspects of their life— such as finances—while they focus on alcohol and other drug use. Many people use drugs to temporarily escape problems such as loneliness or anxiety, but their addiction inevitably creates long-term financial problems.
Former alcoholics and drug users may have poor credit ratings combined with feelings of failure (due to dissolved marriages, loss of employment, and other difficulties resulting from their addiction), which can cause them to think that they cannot overcome their money problems.
What is compulsive spending?
Compulsive spenders buy things that they really do not need and won’t use. They often acquire large amounts of credit card debt. Shopping gives them a temporary “high” and takes their mind away from problems or feelings of sadness or loneliness. Later, however, this high is replaced with guilt and anxiety, and they may face additional financial difficulties such as bankruptcy and mounting bills.
What are some strategies you can use to gain control over money?
Planning can help you gain control over money. You can create a budget by listing your expenses; these may include house, car, and insurance payments. You should also list things such as gasoline, groceries, and health care items. One way to get a good estimate of your monthly expenses is to keep a daily log of your spending. You can then figure out how much money you need to put aside for food, clothes, and other items each month. You should compare your expenses to your income and see where you need to cut costs. A financial counselor can also give you advice on money management and may be able to direct you to organizations that offer assistance. For example, some organizations provide temporary housing until you get on your feet again.
How can you get out of debt?
Make a list of people or companies that you owe money to and work on paying them back in small, consistent increments. In some cases, you may be able to prioritize your bills if a lender is willing to give you additional time to pay back your debt.
When you pay back debt or purchase items, refrain from using credit cards or get rid of your credit cards altogether. This will help you avoid having to pay interest. Paying with cash (rather than relying on credit) will also make you less tempted to buy nonessential items.
You may need to cut corners by spending less money on nonessentials such as entertainment; however, do not deprive yourself of too much or you may revert to your old spending habits. If money is still too tight, you may want to get an extra job or look into consolidating your bills.
Support for getting out of debt is also available from Debtors Anonymous or other such organizations. Fellow group members can provide you with valuable resources and encouragement to help you get your finances in order. Of course, consult with your sponsor.
Debtors Anonymous (DA) The Debtors Anonymous website lists addresses and websites of DA groups and provides questions and signs to help you determine if you have an issue with compulsive debt.