We often see talk online about not having much money, how to budget so we can save money, and the narrative is about those who struggle to save.
But what if saving is really easy for you, and in fact is actually becoming a problem?
This is more common than we perhaps realise.
What Is Hoarding Disorder?
A hoarding disorder is where someone acquires an excessive number of items and stores them in a chaotic manner, usually resulting in unmanageable amounts of clutter.
People with hoarding disorder find it difficult or impossible to throw things away due to a strong need to keep things. The thought of getting rid of anything can cause a huge amount of anxiety.
Hoarding disorder can cause considerable distress for someone when it impacts on daily life. They might be unable to sleep in their bed, not able to use the kitchen, or put themselves at risk of fire all due to an excessive number of items. They might also avoid inviting people over due to the embarrassment at all the clutter.
Hoarders are aware of what they are doing, but without help, it can be a difficult problem to fix.
It also doesn’t just stop at items. It can extend to digital hoarding, animal hoarding, and money.
Saving money is a healthy habit, but it becomes a problem if it is at the detriment of everything else. Spending money is part of having a healthy relationship with money and to develop wealth for our future-selves.
We can’t save our way to retirement – we have to take on some risk and invest our way there. For an accumulator personality type, this can feel really scary.
There can be key triggers that heighten the need for money hoarding. The great depression of the 20s and 30s saw a huge number of people hoarding money in secret hiding places in their homes to keep it safe, mistrusting financial institutions. The same happened after the global housing crash in 2008. I remember seeing queues of people waiting to withdraw their money to keep it safe. And for good reason. When Northern Rock failed, only the first £2,000 of savings and 90% up to £33,000 was protected by the FSCS. There was a real risk of losing money! It’s why the FSCS increased their protection of savings to £85,000.
During the pandemic, the UK had the highest rate of savings among 17 countries – higher than France, Germany and the US.
In fact, any time there is a projected downturn in the stock market or any major global upheaval, the price of gold goes up as money is ploughed into it for safekeeping.
When bad things happen in the world, our instinct is to run for cover and save what we can to protect it. It’s part of the stress-reaction that results in fight or flight.
Hoarding is not the same as saving. In fact, it’s definition is to: “accumulate (money or valued objects) and hide or store away.”
But is hoarding money a bad thing? Some would say no because it’s best to have lots of money for a “rainy” day. I saw some people comment online about this, vowing to have a year’s worth of money saved up in case something like this should happen again.
So when does a normal and healthy savings habit become a problem?
Too Much Cash
In my blog post – “When Saving Money Is Actually Holding You Back” I wrote this:
“If you leave all your money in a savings account (which doesn’t really benefit the money given how low interest rates are), then in 20 years, your money will be worth less than it is now. In other words, you’ll be able to buy much less with it that you can currently.”
Essentially, having lots of money squirrelled away does not help you in the long-term due to the phenomenon of inflation (how price changes of the things you buy over time). Some of it is good for emergencies, yes. But not all of it. I know personal finance is personal, but the more you have sat around doing nothing, you’re losing a valuable opportunity in growth which is essential for our future selves.
Where else does it come from?
While major global events can trigger hoarding behaviours in many of us, much of how we “do money” comes from what we learnt as a child.
You don’t need to have personally gone through a major life event for it to be affecting you. If your parents, grandparents and other past relatives had issues with scarcity around money, there’s a good chance you will inherit those behaviours too.
It’s up to us to identify the patterns that are no longer useful so we can break them and pass better ones onto future generations.
We live in a vastly more abundant world now than ever before. Opportunities to make money are all around, and we’re connected globally by the internet. Now is an amazing time to be alive! Does the vow of poverty running through your family serve you anymore? My guess is no.
We can also inherit the scarcity mindset of being a certain gender, work in a certain profession or a live in a certain culture or society.
If culturally, it’s not normal for any one person to have wealth or it’s the norm to give money away at the detriment of yourself, then that’s what you’re likely to do too.
Certain professions also perpetuate scarcity mindset such as the arts, health care and teaching. These professions tend not to be well looked after financially, and can lead to a collective “acceptance” of an income level that doesn’t support growth and abundance. It never occurred to me to ask for more money as a doctor- that’s not why I started out in medicine as a career. But why does it have to be that way?
Women have had little say about money for hundreds of years in some societies. It’s only in the last few generations that we have had the right to a credit card in our own right and investing/money management was the domain of the man of the relationship.
It’s no wonder then that many of us can have fears around money and worries about there not being “enough” prompting hoarding-type behaviours and fear around spending/investing.
Do You Have Money Hoarding Tendancies?
For those with money hoarding tendancies, it brings a feeling of calm and security seeing the money climb up. Spending on anything can cause a sense of guilt and “buyers remorse”, returning something back to a shop rather than enjoy it.
It can also limit going out and socialising with friends, preferring to stay at home to save money.
Finally, a money hoarder may be so concerned with spending, that everything they own is worn, old and in need of replacement or mending. They would rather live with inconvenience than spend to replace it. Some of this can be linked to environmental concerns, but often it’s a result of indecision and “getting it wrong” with the underlying fear of wasting money. To a money hoarder, waste is the worst crime of all.
How Do I Overcome It?
It first starts with acknowledgment. If any of this is ringing true for you, start to explore where this is coming from. A good exercise to do is to look at your family tree.
Draw out a chart like you would have done at school (remember that triangles represent men, and circles represent women?). For each person on your family tree, list out what they were/are like with money. What common phrases did they use? Were they a spender or a saver? Rich or poor? Did they go through any traumas around money such as a world war, stock market crash or scammed out of money? List everything out.
Once you’re done, step back a look at the whole picture. Are there any patterns that immediately jump out at you?
Choose A Different Path
Once you recognise the patterns, what do you choose to do instead? Recognise that you have control here. You can re-write your money story to one that allows you to spend and invest. It takes time for our brains to be re-wired to a different behavioural pattern, so don’t beat yourself up if you struggle with change. We all do. Bring a growth mindset to it and accept that you will be shaky to start with, but given enough time and dedication, you can accomplish it.
Take Baby Steps
When you make changes, keep them small. Step outside your comfort zone in tiny increments, not great leaps (unless you want to!).
Every time you make a change, like buy something “frivolous” or invest in the stock market, you may have feelings of anxiety that make you want to run away from it all. This is a normal sign that you are growing. Allow the bodily feelings to pass through you. It might take around 20-30 minutes for the feeling to pass, then your brain can kick back in again to put you back on the path you’ve set for yourself.
Finally, get help if you need it. You don’t need to do this alone. A financial coach (like me!) can help you to understand your money past and make lasting changes for the future. Get in touch if you would like to start coaching with me.
Equally, if you think you are affected by a hoarding disorder and it is impacting on your home life, seek help from your doctor. Often talking therapy is needed in these situations to break through the problem.
Hoarding disorders are common, and they can impact on our lives in a variety of ways. Hoarding money is not the same as saving, and because saving money is seeing as a virtuous activity, hoarding a lot of money can be overlooked. We cannot save our way to our retirement – we do need to invest some too. And money needs to flow. Without spending it, everything grinds to a halt.
Until next time,
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