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How to Prevent Hoarding From Keeping You in Serious Debt


Although it’s a term many use lightly, it can be a true mental health disorder. One that can put a large strain on your life, especially your finances.

Here’s what you need to know about how this disorder can keep anyone suffering from it deep in debt.

What is a hoarder, really?

While most people have referred to hoarding before (usually in jest), it is a serious illness.

The Anxiety and Depression Association of America (ADAA) defines hoarding as “the persistent difficulty discarding or parting with possessions, regardless of their actual value.”

At first glance, this can sound like any of us sometimes. So how can you really tell whether someone suffers from a hoarding disorder?

The International OCD Foundation has a useful fact sheet on hoarding that says that while collectors seek to organize and display their things, hoarders do not. A few helpful facts about compulsive hoarding include:

  • A hoarder collects and keeps a lot of items, even things that appear useless or of little value to most people.
  • These items clutter the living spaces and keep the person from using their rooms as they were intended.
  • These items cause distress or problems in day-to-day activities.

How many people suffer from this? According to the American Psychiatric Association, two to five percent of the population. However, The Washington Post cites a much larger statistic of “6 percent of the population, or 19 million Americans.”

How hoarding behavior affects your finances

Like any disorder, hoarding affects many areas of your life. But a hoarder is also likely to see their finances take a major hit.

Especially when you consider the ADAA’s further descriptions of hoarding:

  • It can be related to compulsive buying (such as never passing up a bargain).
  • Hoarding can lead to a compulsive acquisition of free items (such as collecting flyers).
  • It can also drive the compulsive search for perfect or unique items (which may not appear to others as unique, such as an old container).

It may seem that only the first and last things would hurt your finances, but even the compulsion to hoard free things can have an effect. Here’s why.

Hoarding can lead to overspending

This first one is pretty clear. If you suffer from compulsively buying things, sticking to a budget might be pretty difficult to do.

Hoarding is an addiction, and that addiction to spending can’t easily be fixed with a budget on an excel spreadsheet.

Hoarding can cause you to miss bills

Many hoarders end up in a position in which they have so many things that they can hardly navigate their own homes. As piles of stuff overflow, many hoarders are forced to pave tiny walkways to get from one room to the next.

Now try to imagine finding your paper mail in all of that. Any hoarder who isn’t paying their bills online may end up missing bill due dates – because they can’t find their bills, to begin with.

Hoarding can lead to an increase in daily expenses

For the same reason above, hoarding can lead to an increase in daily expenses.

Serious hoarders who literally fill their homes with things are less likely to be able to use kitchen appliances, as they too will be buried. That means buying more meals out – probably all meals. That’s an expense that can topple even a strict budget fairly quickly.

Hoarding and debt

A compulsive need to buy things can lead anyone into debt. And hoarding is an addiction that can overrun the lives of those it touches.

While there are the physical and financial manifestations of it (not being able to use your own home and falling into debt) there’s also the reliance on the addiction.

Paying off debt requires diligence and an eye towards the future. It requires a belief that you have a future worth fighting for.

But if you have an addiction, that’s going to be the loudest and most important thing in your life. And it’s going to focus you on the here and now. Thinking towards the future with an addiction might be a lot easier said than done.

If someone is suffering from a hoarding disorder and debt, the best thing they can do is seek help for the hoarding first.

How all of us can be a little too attached to our things

While hoarding doesn’t affect the majority of the population, we can all be susceptible to being a little too attached to some of our things.

Lifehacker recently wrote an article about why this is, based on a TED Talk on the same subject. They talked about the “endowment effect” and the “ownership connection” (valuing something because you own it), as well as “sense of self” (letting the things we own provide us with a sense of identity).

Think back to some of the things you might have a hard time getting rid of. Do any of these attributes apply?

The problem with over-attachment to our things

If you don’t identify with hoarding, you might not think it’s a big deal to be attached to your things. But this emotion can run deeper: thinking we need these things to be happy. With hoarding, this emotion happens to the extreme. But it’s something we all deal with from time to time.

Thinking we need things to be happy can lead to large amounts of debt. Imagine upgrading your phone or car before you really need to or buying a larger home on a larger mortgage than you had planned. It can even go down to the college you choose, the clothes you wear, and the types of restaurants you invite your friends out to.

When we attach our identity to the things we buy, it can lead to a problem that spirals out of control if unchecked. It may not lead to hoarding, but it can certainly lead to overspending. And, if you’re in debt, it makes it that much harder to apply your money to debt payoff.

Attach yourself to goals instead of things

So what if you gave yourself a different way to feel a surge of happiness? How about the surge of happiness you get from paying off a small debt or saving up for a vacation? Or even the pride that can come with staying right on budget?

Once you can extricate your sense of identity and happiness from your things, you can attach yourself to your goals. You might even find one working with the other. For example, selling some of your lesser-used things to reach financial goals such as debt payoff.

You don’t have to go full minimalist to make this happen – though practicing the art of removing things you don’t need can certainly be a healthy endeavor once in awhile. Just give yourself a chance to try finding happiness in not spending, in saving your money to reach goals, and see how you feel then.

You just might find that the happiness and pride you feel in working to achieve a larger goal feels better than anything else in the end.

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