Post subject: Correlation between mental illness and one's spending habit?

Many people spend money like crazy, that is, they keep spending more money than they earn. I suppose that we can say that they are just being irresponsible and/or they are being fatalistic. Is that all? Do they have some problem mentally? (This is a genuine medical question)

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This is more of a problem in economy. Specifically, with regard to one's spending habit, it's pretty much out of control. One data to suggest this is that Americans saved roughly 10% of yearly income back in 1980. Today they only save 0.4% on average.

Post subject: Re: Correlation between mental illness and one's spending ha

[quote="iRuleThisForum"]Many people spend money like crazy, that is, they keep spending more money than they earn. I suppose that we can say that they are just being irresponsible and/or they are being fatalistic. Is that all? Do they have some problem mentally? (This is a genuine medical question)[/quote]

I've seen a number of instances of this type of situation. I am not a doctor so this is not a professional opinion... but there are a few reasons that I have seen where this type of behavior occurs.

First - My mother was bi-polar and she would have her "UP" sides - during those times she would be giddy and would spend money that we didn't have on things we didn't need. To the point where the electric bill or phone bill would not get paid but she had spent all the money on yarn or magazines or other junk... Then on her down side - she would spend money on similar things or junk for my sisters because it made her feel better when she spent money.

Second - My mother and another 2 family members went through similar patterns during the grieving period. When my grandmother and grandfather died, my mother spent every penny of her inheritance on the same kind of stuff, but this time it was motivated to relieve her grief. Instead of attending grief counseling and trying to deal with the grief more positively, she bought things. When she bought something, she got the lift, it took away the pain and after all that spending piles up - the money was gone. I've watched 2 other family members doing the same thing. Rather than seeking counseling they try to buy back their happiness which is an unattainable goal....

Third - I think there is an OCD type of hoarding disorder that some people have... call them "pack rats" or whatever, but again, the same symptoms and results.

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the majority of the world is living "beyond their means". We are in a credit world and everyone has debt like never before in our history.

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2006 was actually the first year since the Great Depression that the American people actually had a negative savings... I could go on and on about how the Fed cut rates so low and mortgage companies got so crazy that they created a credit black hole that is sucking in people by the tens of thousands on a daily basis. Foreclosure rates are skyrocketing, property values are plummeting, time on the market for homes for sale has doubled, tripled and quadrupled.

Credit Card companies lure unwitting and uneducated people in with 0% rates for x and y and neglect to mention that if you are 1 minute late with the payment your rate goes up to 34 % interest...

What has happened over the past few years is that people were given mortgages (3,5, 7 and 10 year Interest Only Jumbo ARM loans and the like) for houses that they NEVER could afford otherwise. Then the rates climbed, their payments adjusted up and coupled with the rising cost of living - people start to miss a credit card payment here and there, then its the late fees, and the interest charges and then destitution...

Meanwhile - the cost of living has gone up so much - the crunch is bad and will get worse before it gets better.

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credit cards and similar credit situations are really the downfall for most people and financial savings.

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Looks like there is going to be a freeze on sup prime teaser rates, for the next 5 years to help stop the foreclosures in the US. It's about time the government decided to step in and take care of this situation for once and all.